As any restaurant owner or manager knows, the cost of restaurant marketing can feel like a bit of a mystery. Yet, marketing is crucial in attracting customers and building a loyal customer base. So a well-planned marketing budget can make all the difference in the success of your restaurant. But don’t worry; we’ve got your back with this essential guide to calculating your restaurant’s marketing budget.
National Average Marketing Budget for Restaurants
According to industry research and a good rule of thumb, the average marketing budget for restaurants is around 3-6% of total revenue. While this is often cited as a benchmark, it is essential to remember that your restaurant’s marketing budget may differ based on factors such as competition level, target demographic, and marketing strategies. For a newly opened restaurant, it may be wise to allocate more than the National Average Marketing Budget for Restaurants, as they need to create brand awareness and establish their presence in a competitive market. Therefore, it is essential to consider your total revenue when determining your marketing budget, as this will ensure that you can allocate enough resources to market your restaurant effectively.
For example:
XYZ Restaurant generated gross revenue of $1,500,000 in 2018. To support their marketing efforts in 2019, they allocated 5% of their income towards marketing. This calculation resulted in a marketing budget of $75,000, equating to approximately $6,250 per month.
Marketing Budget for Restaurants in Big Cities
Big cities like NYC, LA, and Miami are known for their competitive restaurant industries. To stand out in these crowded markets, restaurants often allocate a significant portion of their budget toward marketing. Unfortunately, the high cost of living and doing business in big cities can make these marketing strategies more expensive, and it’s not uncommon for restaurants in big cities to have marketing budgets higher than the national average.
However, it’s important to remember that having a higher marketing budget doesn’t always equate to success. Therefore, insulating your return on investment (ROI) and adjusting your marketing budget is crucial. As recommended by Aaronallen, It’s also a good idea to allocate your budget proportionally to your sales volume. For example, if July is your busiest month, you should spend a more proportionate amount on your restaurant’s marketing budget.
Choosing the Right Marketing Channels
Once you have determined your marketing budget, choosing the proper marketing channels to reach your target audience is essential. This can include online and offline marketing strategies, such as social media advertising, email marketing, influencer marketing, event sponsorships, etc. Finding the best channels for your restaurant and target demographic is the key to success.
For example, if your restaurant is in a highly populated urban area, social media advertising may be a cost-effective way to reach many potential customers. Your marketing channels should also be used to retain your existing customers; according to The Restaurant Times, retaining an old customer is 70% cheaper than attracting a new one. Your loyal customers can also help drive new business through word of mouth.
It’s also important to remember that you don’t have to do it all at once. Start with a few marketing channels that you believe will be most effective for your restaurant, and then adjust and expand as needed. The goal is to find the best channels for your restaurant and help you reach your marketing goals.
Hiring a Specialized Marketing Agency
Marketing is a complex and time-consuming process, and it can be challenging for many restaurants to keep up with the latest trends and best practices. Hiring a specialized marketing agency can make a difference. A specialized marketing agency can help your restaurant develop and execute a comprehensive marketing strategy tailored to your needs and goals. They will have the experience and expertise to determine the best marketing channels for your restaurant, measure the success of your marketing efforts, and make adjustments as needed. It can be a wise investment if you want to see actual results. The right marketing agency will have the resources and expertise to help you reach your target audience and achieve your marketing goals.
In conclusion, determining the proper marketing budget for your restaurant is essential in attracting customers and building a loyal customer base. While the national average marketing budget for restaurants is 3-6% of total revenue, it’s essential to consider your restaurant’s specific goals and strategies when determining your budget. Restaurants in big cities like NYC may need to allocate more of their budget towards marketing due to the market’s competitive nature. Still, it’s essential to evaluate your ROI and adjust your marketing budget as needed. Choosing the proper marketing channels is crucial in reaching your target audience and achieving your goals.
