Jon Taffer's 3 Step Revenue Growth Plan
Introduction: Laying the Foundation

    Nightclub and bar asked me to write a series of articles that would impact your revenue for real — to provide information that can’t help but impact the revenue and profitability of your business.
    My mission is to do what I do in our popular workshops and programs at “The Show” and around the world: To provide heavy hitting, powerful and thought provoking information, tactics and programs and to share the most successful programs and tactics we use at Taffer Dynamics and in our Neighborhood Marketing Institute client and property work.
    Okay. I’m in. Here we go.
    In our business, the name of the game is marketing. Too often, marketing is made far too complicated and, as a result, far too costly.
    Over my many years and literally hundreds of operations, I’ve learned some powerful lessons. The biggest is that effective marketing can be surprising simple.
    In our industry, marketing for an independent restaurant, bar, nightclub or a local franchised operation is not about brand building or exposure. It’s about building customer traffic and revenue on a localized basis, plain and simple.
    I’ve learned that those who make their living off our marketing checks get paid to create “perceived value” for the monies we spend at their stations, newspapers, etc. To provide you with perceived value, they add fluff (promos, mentions, freebees and anything they can think of) to illustrate a “maximize perception of value.” As a common result, a promotion or marketing message that was simple in its purpose and target audience becomes a mess of too many ingredients.
    In the end, more often than not, what should be a few concise (focused), results-oriented marketing tactics becomes a complicated and fragmented “program” that dilutes focus, reduces impact and likely even costs more.
    Taffer Dynamics and our Neighborhood Marketing Institute have built their reputations by building revenue. After all, high revenue is the ultimate cure-all for any ailment a restaurant, bar, nightclub or hotel may have. We live and die thinking about revenue.
    The three steps of the Taffer Revenue Growth Program, which I will outline in this series of articles, are (1) check average building, (2) customer frequency tactics and (3) new customer, or trial visit, tactics.

1. Check (Average Spending) Building
    We start your revenue growth plan by maximizing the sales potential of every customer you already have. During Step 1 of my 3-step revenue growth program, I’ll show you how to increase your revenue by up to 18 percent with some simple but powerful merchandising and internal marketing programs. With this first step complete, your “sales potential per guest” will be supported properly with merchandising and other programs that will significantly increase your sales results from any promotion, marketing, meal period, happy hours or late-night.
    The beauty of these internal programs is that they cost little or nothing but significantly increase sales performance every time. With this platform of maximized customer sales results, your business is ready to increase customer visits.

2. Customer Frequency Tactics
    This is huge: Increasing your guest frequency by only one visit per month can increase your revenue by up to 12 percent. All marketing research proves that increasing frequency with your existing customers is easier and far cheaper than marketing to new customers. So, with your “sales potential per guest” maximized, Step 2 will focus upon building your customer frequency. When we get to Step 2, we’ll provide solid frequency building tactics that can get you that powerful extra visit each month.

3. New Customer
(or “Trial Visit”) Tactics
    New customer marketing programs are more costly and challenging. They’re also critical to sustaining the life of your business. Really, your business should not be investing in costly new customer programs until solid sales building tactics and frequency programs are in place — real ones that work. Once you have solid check-building and frequency programs in place that work, your business is ready to fully benefit from Step 3: New Customer Marketing.
    New customer programs simply convert prospects to customers. Don’t let anyone complicate this. There are many ways to do create this conversion. Some are very expensive; others can be totally free.
    Before we can begin working on Step 1, there are some foundations we need to review.

The Power of Creative
    Taffer Dynamics and our Neighborhood Marketing Institute typically avoid traditional advertising sources such as radio, TV and print. We believe that great creative ideas, promotions and even strings of words are where the gold is.
    We’ve all seen large advertising programs fail because the idea, wording, spot or other creative was not strong enough to affect a result. Conversely, we’ve all seen strong ideas or terrific creative approaches achieve fantastic results with little or even no advertising. The fact is that marketing at its simplest is two separate functions: 1. Developing compelling creative and 2. developing ways to “distribute” or communicate your message.
    All successful marketing is driven by compelling or enticing creative that causes reactions in the desired audience. If it didn’t create a reaction, it would not be successful.
    The same is true for internal marketing and merchandising. When I marketed Blue Hawaii shooters at the Hollywood Palace, they failed. When we changed the name of the same drink to Blue Death, they sold like crazy. The idea/creative was more powerful than the drink itself — just as the creative is more powerful than the advertising itself.
    I’ve learned the power of compelling and noticeable creative again and again over the years. ’ve also learned that internal merchandising and marketing is driven by ideas, words, images and compelling creative. At Taffer Dynamics or our Neighborhood Marketing Institute, our first focus is always on developing strong creative before we spend a penny or minute on how to communicate or distribute the message.
    A commitment to great compelling ideas and creative sometimes can be an exhaustive process until we develop promotions, wording, graphics, hooks, offerings and product elements that we believe are powerful enough to attract our target audience. We must fully believe our creative ideas and messages will compel our target audience to respond. If not, we won’t spend a dime on them.
    Without complete confidence in the depth and “hook” of our creative, we do not believe we have something that is marketable in the first place. So, before we create one menu, flyer, ad or spot, we have to be excited about our ideas and/or creative approach.
 
The Power of Your Four Walls
    It takes a great business to achieve great results. The most powerful of
all marketing results comes from a great experience.
    A well-defined and managed operation provides a platform for the growth of the business. For your business to fully benefit from the 3-Step Revenue Growth Program, your guest experience must be in order.
    “In order” does not mean adequate. It means far more than that. Your facility, concept, staff, products and overall experience must create solid “reactions” in your guests. Those who have been in my seminars know exactly what I mean. It is these guest reactions to our business and what we do that ultimately will increase and sustain your business or, kill it.

The Power of Realistic Objectives   
    Too often, marketing and sales objectives are too broad and spread over too much time. We define, assess and grow revenue in two ways. These are:
    Guest Counts: Positive guest count trends are a result of a good guest experience, and/or effective external marketing. Conversely, when an operation is experiencing a negative guest count trend (week to week or month to month), the cause is typically a poor guest experience or ineffective (or no) marketing. Taffer Dynamics views guest count trends as a separate marketing objective with separate tactics, budgets, efforts and tracking. Because we think if it as a separate thing, we focus upon building guest count results as an individual objective. To us, it’s the pure measurement of business growth.
    Sales Performance: A business can increase guest counts by 5 percent but have a reduction in revenue.  This can occur when staffing is lower than adequate. Sales per guest (or average check), is the result of internal merchandising, marketing and staff sales efforts, not marketing. Therefore, we view sales per guest results as a separate marketing objective too. As in building guest counts, we employ separate tactics, budgets and efforts to increase sales per guest results. As a key element of all our client and property work, we always have a separate focus on building sales per guest results. It’s the pure measurement of sales performance.
    Our formula to success is our view of Guest Count Performance and Sales Performance as two separate objectives and purposes. So, we attack each separately with a vengeance and, as a result, improve the performance of each considerably. And, when both guest counts and sales per guest performance are significantly improved, the combined financial impact upon the business is huge.
    We love to establish weekly sales and marketing objectives. For a restaurant that serves 600 persons a week for lunch or a nightclub that has 600 guests come on Fridays, we’d establish a reasonable weekly objective for guest count growth. For example, increasing guest counts by 1 percent a week would be an increase of only 6 guests each week — certainly a reasonable and attainable goal. However, even with such a modest goal, in only 10 weeks you have increased your guest counts by over 10 percent. Wow!
    Establishing your objectives into short-term, weekly guest count growth goals will change forever the way you market. With an objective to increase weekly lunch guest traffic (or Friday night traffic) by only six persons a week for 10 consecutive weeks, you can plan very effective, targeted and concise marketing efforts.
    Short-term goals, short-term tactics and close tracking of our results are the benchmarks of our marketing success at Taffer Dynamics. Once the weekly tactics are implemented, we simply track our results, and if we miss our weekly objective this week, we increase our activity next week.
    After 10-12 weeks, even if you miss your weekly goals a few times, you still will increase the guest count flow of your business very significantly.
    With this groundwork of understanding, we’re ready to begin work on Step 1: Building Your Sales Per Guest or Average Check. But, we’re out of space for this month.                              NCB



Jon Taffer is chairman of Taffer Dynamics Inc., one of the hospitality industry’s most acclaimed restaurant and bar consulting and development companies. He also is a longtime speaker at “The Show” and will be presenting his extremely popular pre-conference Marketing Summit at “The Show” in Atlantic City in October 2007 and in Las Vegas in February 2008. For more information, visit www.tafferdynamics.com and www.nightclub.com.