Marketing is a must for any bar or restaurant. But how much should you spend? Where should you spend it? Get the answers using these 4 steps for creating a bar and restaurant marketing budget. Plus, see the 2 calculations that can reveal the ROI of your marketing efforts.
1) Get SMART with Your Goals
Before creating a bar and restaurant marketing budget, take time to set clear business goals. Whether it’s attracting new customers or increasing sales during a specific daypart, the more specific your goals…the better.
Here’s why goalsetting is so important in the budgeting process:
- Save Money: Aligning your bar and restaurant marketing budget with your goals ensures you’re not wasting a cent. Check every line item in your bar and restaurant marketing budget. Each one should directly support your business objectives.
- Better Outcomes: Research shows that setting specific and challenging goals leads to better performance as you strive to meet them.
- Stay Focused: With a goal-focused budget, you won’t be tempted to spend money on marketing trends – just because they’re trendy. For example, Snapchat is one of the hottest new social media platforms. Snapchat is great for restaurants who want to reach the under-35 crowd. But if your goal is to increase sales of catered lunches to nearby businesses? You’d be better off spending your budget on printed menus to drop off. Follow this rule: “If it doesn’t meet my business objective, it stays off my bar and restaurant marketing budget.”
Once you have your objectives figured out, it’s time to set SMART goals for your bar and restaurant marketing budget. When setting goals, following the SMART strategy helps you plan out exactly what you need to achieve, with actionable and measurable items.
To ensure your goals are SMART, they must be:
- Specific: Be clear about what you want to achieve with your goal
- Measurable: Your goals should be quantifiable and easy to track
- Attainable: The goals must be challenging but still possible to achieve
- Relevant: Your goals must make sense for your business and marketing objectives
- Time-Based: Give yourself a deadline to measure your achievements
An example of a SMART restaurant marketing goal is:
“I want to increase my sales this quarter by 10 percent by attracting new customers and driving repeat business through email marketing campaigns and a new loyalty program app.”
2) The Magic Number: How Much to Spend on Your Bar and Restaurant Marketing Budget
After outlining your goals, it’s time to fund them. This is a pain point for many. Thanks to fluctuating costs and never-ending expenses, it’s hard to carve out cash for your bar and restaurant marketing budget.
The good news? There are 2 simple formulas that can help you determine how much to spend on your bar and restaurant marketing budget: the 3-6% Rule and the 70/20/10 Method. Get the calculations by downloading this free guidebook: The 5 Step Bar and Restaurant Marketing Budget Planner.
Before you apply the 2 formulas to your bar and restaurant marketing budget, you’ll need to determine what you’re spending on other areas of your business.
- Food Costs: How much you spend on monthly inventory for food and beverage
- Labor Costs: How much are you paying your employees and managers
- Overhead Expenses: What does it cost to keep the lights on? Do you pay for janitorial services, AC or heat, property taxes or rent?
- Promotional Merchandise: What are kind of swag are you going to have?
- Entertainment: What do you currently spend to entertain guests?
- Miscellaneous Spending: This is anything extra that doesn’t fit into a category. For example, maybe you treat your staff to a holiday party or have to pay for unexpected repairs.
Review your spending to determine exactly how much cash flow you have. If you don’t have much left over for your bar and restaurant marketing budget, think of ways you can cut costs.
For example, if you’ve been spending your entire entertainment budget on live bands, switch to entertainment that guests can enjoy 24/7. For example, certain trivia and digital arcade games have been shown to increase check averages by 21%.
If after crunching numbers you discover you don’t have much of a bar and restaurant marketing budget – don’t get discouraged! There are plenty of grassroots-style campaigns that are low on cost, but require a little more time and effort to execute. For example:
- Social Media: Use new marketing tools like Facebook Live or Instagram Stories to promote your specials and events to your followers.
- Local PR: Reach out to local media outlets that could feature your bar or restaurant in a story.
- Fundraiser: Hold a fundraiser for a local charity. Other small businesses may participate, so you can cross promote to an entirely new demographic.
3) Where to Spend Your Bar and Restaurant Marketing Budget
Business objectives? Check. Funds available for marketing? Check. You’ve got the basics, now it’s time to build out your bar and restaurant marketing budget. But first, get out a calendar…
Create a 52-Week Budget
When it comes to setting a bar and restaurant marketing budget, the best time period to set it for is a calendar year. At the very least, plan out an entire quarter. But whatever you do, don’t “pay as you go” for marketing – you’ll use up cash, fast.
Why 52 weeks? First of all, looking at an entire calendar year lets you identify key holidays and important dates. Use these to build out events and promotions. For example, if you’re an Irish bar or sports pub, you definitely want to plan ahead for marketing your St. Patty’s Day festivities.
Plus, having a 52-week plan in place lets you “move” marketing dollars around in your bar and restaurant marketing budget. If an opportunity arises for March, you can reduce spend in April to accommodate.
To get 10 smart ideas for spending your bar and restaurant marketing budget, see this guide.
Ongoing Marketing is Optimal
As you plan your bar and restaurant marketing budget, the more consistent you can be, the better. It’s easier to track funds month by month. Plus, consistency is king in the world of marketing: your goal is to always be top-of-mind for customers. Here are a few ongoing monthly costs you could plan for (if they meet your business objectives, of course):
Invest in ESP. Yes, an email service provider (ESP) can supercharge your bar and restaurant marketing budget.
EXAMPLE: For as little as $10 a month, you can access powerful software – like MailChimp – that includes templates and tools for sending professional emails to your customers.
Social Media Marketing
You may want to hire a local consultant to manage your social media for you. Or, if you do it yourself, allocate a portion of your bar and restaurant marketing budget to PAID social media ads each month.
EXAMPLE: Try “boosting” a post on Facebook to show it to more people for just $50. With 4 out of 5 Americans on Facebook, it’s a cost-effective marketing method – see these 20 Facebook DOs and DON’Ts for restaurants.
“Big 3” Media
Don’t overlook traditional media in your bar and restaurant marketing budget: print, TV, and radio. To remain competitive in a digital world, these 3 forms of media have become more affordable.
EXAMPLE: if you’re a sports bar, consider running a monthly campaign of 15-second radio ads on local sports radio.
4) Did it Work? How to Track Your Bar and Marketing Budget
The most important part of setting up a bar and restaurant marketing budget is knowing whether or not your strategy worked.
You can use your POS system to track sales of particular items that were featured in your marketing efforts. You can also perform calculations that will reveal the effectiveness of your campaigns.
The most important 2 numbers to know when it comes to tracking your bar and restaurant marketing budget are LTV (lifetime value of customer) and CAC (customer acquisition cost).
Once you’ve determined these 2 numbers, you can plug them into a simple formula that will reveal 1 of 3 scenarios:
- You’re spending too much on marketing, and not bringing in enough customers to justify the expenses
- Your marketing spend and customer acquisition are matched up perfectly (good job!)
- You’re not spending enough on marketing, and therefore are not bringing in enough customers
To learn how to calculate these formulas – and find out if you’re spending enough or too much on marketing – check out this:
Like the old saying goes, if you fail to prepare, prepare to fail. Instead, plan for success by creating a bar and restaurant marketing budget that aligns with your business goals.