One of the most common question that comes out when we talk about social media with the restaurant owners is that “Why do I have to be on Facebook or Twitter or any other social media platforms?

Let me tell you one thing for sure that Social Media will change the way the restaurants do business now and in the future.No more can a restaurant afford to do business without leveraging social media if they want to survive and thrive in this new digital age.

I still remember when I wrote the first blog post about Facebook last year, there were only about 37 million people on Facebook in US and now after a year there is over 100 million people. More and more people are joining on Facebook, Twitter and many other social media network. As a business owner I’m sure you agree that you should go where your customers are. Right? Right now they are on Facebook and Twitter.

In the video the author Penny Power talks about New Entrepreneurs that are emerging now. She is absolutely right that there is this new breed of entrepreneurs who understand that business can be created inside the virtual world based on the value they create for their community.

If you look at the world of restaurant business then there are these new social media restaurant entrepreneurs that are emerging like @AJBombers , @KogiBBQ @CoffeeGroundz @NakedPizza You can follow them on Twitter to find more about them. They understand the power of social networks. They have created a community inside the virtual world of Facebook and Twitter to name just a few. They engage with them on a regular basis to make sure that their customers are taken care of and that they are happy. If any thing goes wrong with the service, product or anything they are right beside to help them out. They don’t wait 3-4 days for the complain letter to arrive via snail mail. Those days are gone. Now the same letter will be broad casted publicly in 140 characters or less on Twitter if they don’t act immediately. I hope you follow them on Twitter and Facebook to learn more about how they do business on Social Medial.

Word of Mouse Advertising

Word of Mouth Advertising comes only when you wow your customers. These new entrepreneurs understand the importance of exceptional service that goes beyond just serving food to the customers. They also understand the power of social media and would not hesitate to leverage it to create a viral effect of the ravings they get from their customers. I like to call it “Word of Mouse Advertising” powered by the clicks on the mouse. Restaurants are well know as a business where word of mouth advertising has been used for a long time. But now with the power of social media the advertising of your restaurant can go viral in less time if executed well.

New Business Model

“We will all win and not just I win.”

This is the new set of thought process of new restaurant entrepreneurs who are redefining the new business model. They believe that their customers deserve the quality service, respect and dignity. In order to achieve this they go an extra mile to WOW their customers. The customers pay them back with loyalty to their business and in return the entrepreneurs reach out to help their own community. In this case every one wins and not just one party.

Those who are ready to grasp this new set of rules in new era of Facebook and Twitter will rise up to dominate the restaurant market. Those who are not they are eventually going to be wiped out by their competitors who embrace the social media.

It is just a matter of time that “The new world will emerge from the ashes of the old world.”

Do you believe that Social Media will change the way restaurant does business now and in the future? I would appreciate your thoughts on Why Social Media is essential part of the success for restaurant business?

Though I am not the greatest fan of McDonald’s when it comes to the quality of the food, I have to admit that one thing I like about McDonald’s is that it has the best system of producing billions and billions of burgers at a great speed.  It has such an efficient system that it enables them to expand quickly. No wonder we see McDonald’s every where.

One of the reasons that some  small restaurants are not able to scale is that they don’t have a system in place. The business owner is the system. When the business owner is away from the store for some time then the business starts to fall apart or slow down.

So how do you know that there is a system in place in you restaurant business?

If your restaurant can run effectively and efficiently without your physical presence I know that your restaurant does have a system.

Watch the above video of McDonald’s which has the best system of delivering the burgers to those hungry customers with fast and quality service.Pay attention to the service provided to their customers beyond just the burgers. They go an extra mile to serve them that keeps them happy and  make them come back again and again.

I’m sure we can learn something from the success of the McDonald’s.

It is a normal day during the week. Suddenly rain starts pouring right before the lunch hour.The restaurant should have been full during the lunch time. But it is not. The business is slow.Have you ever experienced that?

Weather does affect the restaurant business. Have you ever thought of any marketing strategy to attract those customers who might have decided not to come to your restaurant just because of the rain. Well, there might be an affordable solution for you.

I had a chance to see the video demo of the Blue Sky Local, a company that specializes in smart coupon marketing solution for the restaurants.They empower the restaurants to boost the customer traffic during the slow sales times especially when the weather condition is not so good. Thanks Matt Ackerson for the video. It was quick.

The main feature that I like about Blue Sky Local is that it is web based. Any restaurant owner or manager can do it online from any where. They have an access to dashboard where they can manage their customers. It is permission based which means that the mobile customers who have subscribed for the coupons will have to confirm to receive the coupons from your restaurant. The customers also have an option to unsubscribe by themselves if they choose to do so.

The other feature that I like is that the coupons have an option to be distributed via three different channels-email, text and twitter at the same time. This ensures that your mobile marketing campaign has a maximum effect.

If you are interested to check out this service you can find more information at their site http://www.blueskylocal.com

They even have a 30 days Free trial offer. So you got nothing to lose. Give it a try. If you think it is effective for your restaurant you can then upgrade it.

Once you try it and get some results please do share your thoughts with us about the service. If some one has already used it, I would appreciate your feedback so it would be helpful to other restaurant owners or managers to understand about the smart coupon marketing solution provided by Blue Sky Local. Thanks!

Few months ago I stumbled upon Food Spotting and it caught my attention because I knew that it had something unique to offer to restaurants and food lovers. Alexa Andrzejewski is the Founder & CEO of Foodspotting. She and her team were working on iPhone app then. So to keep up to date with their product release  I had subscribed to their newsletter. I got their email about their iPhone app that is available now for any one to download for free. I thought of sharing with you too so that you get an idea where the future for Restaurants is heading.

I firmly believe that with the penetration of smart phones in US and worldwide the dynamics of marketing is changing. There are new platforms created for restaurants which didn’t exist even few years ago. Just take an example of this Food Spotting App. They just released it. Things are changing and my hope with this blog post is to make you aware of the changes that are coming. I would suggest you to see this new trends and prepare your business to adapt to the new changes that this smart phones like iPhone is bringing.May be you might not see the effect right away. But I believe that over the time services like Food Spotting will definitely change the way food lovers ( at least the iPhone users for now ) look for the food they crave.No more will this new breed of customers  turn Yellow Pages to find restaurants.

Expect similar concept coming to restaurant industry especially when local location sharing is hot trend right now. What I am requesting is to keep your eyes and mind open to ideas. Just don’t discard it right away.

So what really is Food Spotting?

As stated on their site, “Foodspotting is a visual local guide that lets you find dishes instead of just restaurants. Powered by people who take pictures of their food for badges and recognition, Foodspotting makes finding good food easier by letting you see the foods around you”.

Watch the video of Foodspotting iPhone app demo by Alexa Andrzejewski, the Founder & CEO of Foodspotting and see for your self how it works and more importantly see how you can creatively market through these new kind of platforms which were not available few years ago.

I think it is cool way of being found by your potential customers on iPhone and may be later on other smart phones like Black Berry, Anroid and many others. What do you think?

Every restaurant entrepreneur has a dream to expand their business empire by adding more stores to their port folio. Most of the entrepreneurs start with a single unit restaurant. Gradually they add multiple stores into their business. This is when it starts getting tricky managing multiple stores. There is no way you can be in all the stores at the same time. Your time and focus is divided now. When you bought the second store and started devoting time and effort into the second store, the sales of the first store went down. Have you ever experienced that pain?

So as an entrepreneur I’m sure you must have thought about which business model to follow in order to avoid the problems in your ambition to expand your business empire to multiple stores.

After seeing so many restaurant brands and their business model I’ve seen one restaurant chain that I believe has set up a great business model that has proven successful. The restaurant chain that I’m talking about is Chick-Fil-A and their Profit Sharing business model.

Now let’s discuss how they do it?

Selected Chick-Fil-A employee or any chosen candidate pay only $5000 as an earnest money upfront and the rest of the money to construct the store is invested by Chick-Fil-A. The employee who is selected after several rigorous test operates the store empowered virtually as a owner of the restaurant. What ever profits they make out of the restaurant they share 50-50 percent. (Thanks Pete Kane for the comment on my previous blog post for their business model updates.)

Isn’t this deal attractive to a hard working motivated manager, operator or any restaurant entrepreneur who has a motivation, drive, determination to make it happen but doesn’t have money. Chick-Fil-A however controls the real estate which is their main business which in itself is another topic that can be another blog post in itself.May be I’ll save that one for  one of the future post. But for now let’s focus on their restaurant business model based on profit sharing.

With this kind of business arrangement like of Chick-fil-A  restaurants, you have a great opportunity to solve your core problem of growth and expansion.

Even if you are a single restaurant owner or with few restaurants in your portfolio, I believe this is a great business model especially if you want to get away from day to day operational headaches and focus your most of the energy in high leverage investment opportunities. Why not come up with similar profit sharing business model and hand over all the operations to the best capable employee which in your case would be a manager or some one you know very well and trust. You are confident that they can run your restaurant effectively and efficiently than you. The key is to leverage other people’s time and expertise and in return also rewarding them for their hard work. This is a WIN-WIN situation for both the party. For the person operating the store who gets to keep certain percentage (you can negotiate ranging from 10-50%) but make sure it is high enough to attract and retain them for a longer period. With this strategy you are aiming for multiple stores, so I hope you keep that in mind while you are negotiating with the eligible candidate. Your focus here is trying to get more and more stores without having to spent a whole amount of time baby sitting the manager/operator or who ever is running the store.

I saw an interview of Warren Buffet on a television. When he buys a company, he selects the best possible CEO for the company. He said that he doesn’t waste time doing all those kind of long meetings and conferences. He meets the CEO one time, hands over the key and bid a goodbye and says that he is gonna meet him next year.

The reason I bring up this is that to grow big one should have that kind of mindset. Like Warren Buffet once you select your best possible manager or operator that you trust and have confidence on, you just have to hand over the driving seat to him or her and move on to another one in search of another potential restaurant.Unlike Warren Buffet who meets with his CEO in one year, may be you will have to meet with your operator/manager on a regular basis to support them.The point is that you will not have to wander from store to store just to make sure your business is doing ok.

This is just my thought on this profit sharing business model that I think is great for any restaurant business entrepreneurs. What do you think about this kind of business arrangement? Would love to hear your thoughts. If you have some other business model that you think is good and is successful in restaurant industry, I would love to hear from you. Thanks.

I saw the video clip of Chick-Fil-A’s Recipe for Success at Fox Business Online.It’s an interview with Truett and Dan Cathy. Dan Cathy  talks about their recipe for success. I’m sure restaurant entrepreneurs like you can learn important lessons from them about how to create a successful restaurant empire.

Their first secret is Quality People. Dan Cathy mentioned that they attract high caliber people. I have heard that they go through thousands and thousands of applicants before they choose few who are right fit for operating their restaurant.They choose the people with the right mindset, attitude and drive and not necessarily with the money. This is the difference between their Franchise business model and other chain restaurants. The other restaurant chain go after people with money and sometimes not necessarily the right mindset and attitude.

Another recipe for Success is the quality service. It is the service that makes their business exceptional. No doubt the food is good, but the kindness and the great service of the employees makes the experience memorable.As Dan Cathy says the food tastes even better with excellent service.

Even during Economic Downturn in 2009 Chick-Fil-a weathered the storm and still made good revenues and profits. It is truely the answer to the test of how a restaurant based on principles of putting its people- employees and customers before profits can be strong even during the turbulent times. It shows the power of a business that is based on a strong foundation.

I hope you are inspired and if you at least try to incorporate some of the wisdoms from Chick-Fil-a I believe your restaurant would have a greater chance of success.

Do you like Chick-Fil-A’s business model and their business philosophy? How do you feel about their policy of closing their restaurant on Sundays? Is your restaurant incorporating some of the Chick-Fil-A’s recipe for Success? I would love to hear your thoughts.

Panda Express Launches Mobile, Online Ordering Test

Panda Express, the nation’s leader in Asian dining experiences with close to 1,300 restaurants, today announced the testing of Order Panda (www.orderpanda.com), a new mobile and online ordering service in 100 stores……………………….

Couple of days ago, I read the above head line about Panda Express that is testing the new mobile and online ordering in partnership with GoMobo. Here is the link if you want to read the entire press release.What this indicates to me is that restaurants are moving fast in adopting the technology to accomodate the demands of new generation tech savvy customers. These are the new breed of customers who never leave their phones alone and use it for everything possible that includes ordering their food too.

Now these big companies have big budgets and they can spend thousands and even millions if required to get these online and mobile order for their restaurant chain.

What about the small restaurants ? They don’t have millions at their disposal. So how do these small restaurants find a technology solution that does at least the online ordering  but without having to spend tons of money.

When I checked twitter profile for Foodler, I saw the twitter update about their iPhone app to be released by Feburuary. So I hope it should be available any time soon. I am guessing your restaurant might be able to use it for mobile ordering too.

I had done a research online and found one company that might be helpful to you. I thought of sharing with you. There might be others too. So if you know please do include it below the comment section for others to benefit. But I want to recommend one that I have tested and was quite satisfied with their service. The name of the company is Foodler and you can check out their website at  www.foodler.com

So What is Foodler?

Foodler is a website for ordering delivery and takeout from restaurants around you. It  is more reliable and faster than using a phone, since all orders are transmitted and confirmed electronically and the system automatically  remembers your address and payment preferences.

The first thing that I like about this service is that you don’t have to pay huge amount of money. It’s like pay as you go. Once you sign up your restaurant with the company they will include your menu on their system ready for online order. If you have your own website they can link it to your site. If you don’t have your own site then you can use their site to facilitate the online order for your customers.

There is no monthly fee. You pay only when there is online order made by your customers. That is a safe proposition for you because if there is no online order made during that week then you don’t pay. This is good especially when you are just starting.

So just give it a try and see for your self if it helps you to stream line the ordering process during the busy lunch or dinner hours.

Have you used foodler.com for your restaurant to process online ordering. If you have please share  your experience with us by commenting below that might be helpful to other restaurants. If you haven’t then experiment with this online ordering service and share your experience and results. Would love to hear your thoughts on Foodler.

Sprout is a company that builds application and tools based on Facebook that helps marketers and Fan Page admin like you, to enhance the Fan Page experience with your fans and help you engage better with them. Out of so many tools, that has got my attention is the Sprout Publisher.Sprout Publisher is a tool that helps you to create interactive contents like coupons right within the page.

I presume you as a restaurant owner or manager have used  paper based coupons in the past to promote your restaurant. It might have been helpful in some way. But the down side of the paper based coupons is that it is costly. First of all it cost significant amount of dollars to produce those coupons. If they are color coupons the cost can be even higher.They can be as high as couple of hundred dollars to even a thousand and sometimes more depending upon the volume. Secondly it again cost you to distribute them. You have to pay either to a local high school student who is willing to distribute near by the apartments and local businesses or you have to go with an advertising agency who will charge you even more.

As a small restaurant business it is always smart to find a cost effective method of marketing. I’m sure you would agree on this with me. One thing that I love is doing a research on cost effective marketing ideas online for restaurants.

When I saw this Sprout Publisher with a capability to create coupons and distribute it digitally via Facebook, I was thrilled. Because with this you can do pretty much what you have been doing offline with paper based coupons.But now with the power of Facebook, I believe you can do it more effectively and with more precision. So Why not leverage Sprout Publisher to create coupons and distribute them via Facebook Fan Page.

First of all you have to install the Sprout Publisher. So go ahead and install it. I won’t go into detail here. Just follow the instructions. With few clicks it should be done. Now once Sprout Publisher is installed, watch the above video and follow the video tutorial to create your coupons for your restaurant.

How you can leverage coupons on Facebook for a chance to create a viral marketing?

The reason I’m more excited about this is that unlike your paper based coupons, this digital coupons that you create on Sprout Publisher has a chance to go viral. If you craft your coupon with an incredible deal it has a chance to spread all over Facebook among their friends and can multiply into hundreds and even may be thousands. Who knows?

So you might be wondering, how? Well the first thing you have to make sure is that your coupon is so compelling that once a friend or fan receives the coupon on their Facebook profile page they should feel like sharing with their friends voluntarily. If the coupon saves some money to his or her friend, it encourages them to share because you are giving a compelling incentives to do so.

You got nothing to lose by trying this marketing techniques. Just install the Sprout Publisher and give it a shot.It is a FREE tool available to you.

Have you tried Sprout Publisher to create coupons? Please share your experience how effective it was for you. If you haven’t then I would recommend you to give it a try and let us know how did it go for you and share some of your results by leaving a comment below. Thanks.

Kevin Rose is an entrepreneur who is well known as a co founder of the social-bookmarking website Digg. He lives in Bay area and  has a finger on the pulse of what is going on in the tech world and what future holds for these new location sharing services. He shares his thoughts on FourSquare and Gowalla.He is convinced how it is changing the landscape of restaurant businesses in his bay area when leveraged with new way of marketing via Foursquare or Gowalla which is well worth taking a note.

I also believe that location sharing services like FourSquare and Gowalla are going to be huge this year and in the future. So why not get familiar with these services and take advantage of a new medium for marketing your restaurant to tech savvy customers like Kevin Rose. So now without further due let me explain what really is Foursquare and Gowalla.

What is FourSquare and Gowalla?

Four Square and Gowalla are location sharing services based on apps on smart phones like iPhone that enables any one to share their location they visited with their circle of friends in their network and shout out any information that they want to let their friends know about.

Why is Foursquare and Gowalla getting popular?

I believe Foursquare and Gowalla is getting popular because it is a new way of communicating with your close friends and knowing their where abouts without having to call them or text them. It can be useful during any days of the week but this seems to be more handy during the weekends when you want to know which local restaurant, bar or night club you want to visit based on your friends preferences and where they are at the very moment.

The another driving force to make it popular is that it adds game aspect to this service which makes it even more attractive. Who doesn’t love game and wants to win. It becomes exciting to brag about being a mayor of a restaurant and that you got a Free Beer and Pizza like Kevin Rose’s friend Jeff.

It encourages people to compete for that mayor ship which is good thing for your restaurant.It becomes a game to your customers and has a chance of getting viral with all their circle of friends.

Why your restaurant should care about these location sharing services?

These services are new and so many restaurants are trying to figure it out how to best leverage this to attract new customers. It is exciting and experimental as Kevin Rose says. I believe that your restaurant should at least understand the concept and if possible sign up too. That way you get to play around and dip a toe into the water and see for your self if it does work for your restaurant. If it is working for other restaurants then it should be working for you too, Right?

The main reason why your restaurant should care about these new location sharing services is that it gives you the exact demographic information about your customers. Where they are ? Where they are headed to? and so many other important datas of your real customers in a digital format at a click of a mouse.

In the past and even now so many restaurants have a static website with no way of collecting the real data that is useful to the restaurant business. As Kevin Rose says, restaurants typically have email collection mechanism via their website or questionnaire survey bundled with the check. They are better than having nothing. But with the tools like Foursquare and Gowalla you have a chance to collect useful and relevant datas like male and female ratios, time they normally check in at your restaurant and many more that you could use for marketing your restaurant better with the existing customers and potential new customers.

Viral- Another reason is that your marketing becomes viral. How?  Let’s say one of the greatest fan- a loyal customer is in you restaurant. He checks in with Foursquare or Gowalla and informs his private friends on the network and possibly to Facebook and Twitter if he or she chooses so. First of all all his friends on Foursquare or Gowalla are gonna know where he/she is and therefore encourages them to visit your restaurant without even having to call him/her. This can now multiply to number of other friends. The more popular the friend is the better for your restaurant. Imagine high profile tech savvy customers like Kevin Rose or Tony Hsieh from Zappos checks  in to your restaurant and made a shout out to their friends and followers. You could have floods of their fans coming to your restaurant just knowing that they could hang out with them or at least be around them.

How you can create a loyalty program with Foursquare?

Mayor ship- On the video you heard the story from Kevin Rose how his friend Jeff gets the FREE pizza and beer once every week for being the mayor of the Pizza Place in San Francisco. Basically the mayor ship is won by one of your loyal customer who visits your restaurant the most. He or She is the greatest fan of your restaurant. So it does make sense to reward him or her for the loyalty. In turn it creates a competition among their friends to take that position and thus encourages other friends to visit your restaurant or bar often.

Thus it becomes one of the most powerful loyalty program that can go viral.

Points for automatic update on Facebook, Twitter, Foursquare-This is the loyalty program that I have seen Tasti Dlite doing it with great results so I thought of sharing this with you though you might have to adjust to your available resources.

Right now Tasti Dlite is using their plastic gift card to give the points for their loyal customers who visit their physical store but they take it one step further by integrating it online with social networking site like Facebook,Twitter, and Foursquare. I believe this is powerful in the sense that it has viral effect to spread through out the social networking site like Facebook and Twitter among tons of friends and followers.

How do they do it? Let’s say a Tasti Dlite customer comes into their store and buys an ice cream. They get the point for that purchase and now if they opted via online allowing for automatic check in  update on Facebook, Twitter or Foursquare they get 1 point for each. This helps to spread the word out to the entire friends on Foursquare and Facebook, and followers on Twitter.

New Advertising opportunities for your Restaurant?

Since Foursquare or Gowalla is an app in smart phones like iPhone it is a new platform that didn’t even exist few years ago. It has now become a new medium for advertising your restaurants. It even has a new name and is now known as appvertisement.

The core idea is to have your targeted advertising appear on these app on smart phones like iPhone. Let’s say a person checks in to one of the restaurant across the street. Since app recognizes where you are with their GEO location based technology, they can pull out your bar or restaurant deals in to their app saying something like ‘happy hour starting at 6pm or 20% off on your entire check” at your restaurant. I’m just giving you some examples. It could be anything you wish. All you have to do is sign up your business with the service and subscribe to their advertising.

I hope you take advantage of these new advertising medium which can be far effective than the old style advertising on Yellow Pages and newspaper which are not laser targeted to  local customers.

I hope you see the benefits of using these location sharing services like Foursquare and Gowalla and integrate it into your marketing mix to attract new breed of customers. Please try to understand the concept and at least start playing around with it. Once you  grasp the idea you can go with full blown marketing promotion with Foursquare or Gowalla.

Have you used Foursquare or Gowalla? Do you see some more benefits of using it for restaurants? Whether you are a manager, restaurant owner or simply a customer, if you have tried these services , I would appreciate if you could suggest some unique ideas to promote and attract new customers or simply your thoughts about the service by commenting below.