Frequency in Reverse

An article in the Wall Street Journal (Friday, 3/14/08) highlights a long-term trend with negative effects on local restaurants: Stay at home moms are staying at home.

The article notes that the percentage of women in the workforce is at 59.2%, down from 60% at its peak. Not much change, huh? Why worry about that small of a gap? In 2001, 211 meals (per person) were purchased outside the home, last year that fell to 207. What does that do to sales?

To keep math easy, let's assume you have 3,000 unique customers, each visiting every other week (1,500 transactions per week). Now figure that each customer eats out 4 fewer times per year, for 12,000 fewer transactions per year. Multiply that times a $10 ticket average and you're down $120,000 per year. Sounds about right in terms of your decline, doesn't it?

As more women are staying home, and with the rise in home cooking shows, they're preparing more meals in the home. Just as getting 2 more visits per year is important to your Frequency of Visit, so is losing 2 visits per year dangerous to your bottom line.

But what can be done? First, take care of your guest. One in 10 people is willing to never visit a restaurant again if they have a bad experience. You can't be mayor of your village unless you're the mayor of your store first. Taking care of what you have will help retain as much as 10% of your base, decrease costs of gaining new customers, and help to increase frequency of visit.

Next, focus some energies on out of store products. Carry-out, family meals, healthier on-the-go offerings. Then use your current customer base to promote these items. Frequency of visit comes when you satisfy more than one buying decision. Feeding a family at home is a different buying decision than stopping for lunch with a friend.

Lastly, view this trend as an opportunity. People still eat out an average of 207 times per year. Clearly customers don't frequent your restaurant all 207 times, but what if you could get them 4 more times? What if your fantastic, over the top customer service, coupled with a clear objective to introduce customers to the rest of your menu, resulted in increased share of wallet?

How's $120,000 extra dollars per year sound? And all that, just for being nice.

(For more about how the current economic climate negatively affects your Frequency of Visit, see our restaurant marketing blog, Marketing to Mayberry.)

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