How much is a new customer worth? At Rok Bistro in Sunnyvale, Calif., owner Steve Wright decided the customers he was getting with Groupon offers and old media advertisements weren’t worth the amount he was spending. Instead, he’s decided to re-targeting existing customers using a self-service platform called Fanminder. Wright regularly sends out special discounts to his customers’ mobile phones as a way to show his appreciation and encourage them to return for meals during off-peak days.
What are the biggest marketing challenges you’ve faced at Rok Bistro?
Rok Bistro is a restaurant I founded about three and a half years ago based on a unique concept I discovered in Africa, which is cooking on rocks. We obviously opened at one of the worst economic times: September, 2008. Those times were really tough, but we made it through 2009 and things have been steadily improving ever since. Our customers are men and women of all ages, and they come from all over. We are a special occasion, destination-type restaurant, so we draw from a large geographic area. Most restaurants get 80% of their customers from within a three-mile radius, but that is not the case for us. Less than 50% come from a three-mile radius, and more than 50% come from beyond that. People travel because we are the only restaurant in the Bay Area cooking on rocks. That presents an opportunity and a challenge.
I’m new to running a restaurant, but I’m always willing to try different things to see what works. I am not afraid to try anything, but if it doesn’t work I’m not afraid to pull the plug. We’ve spent lots of money on marketing and advertising, with varying degrees of success; I would say in most cases, not a lot of success, at least for the amount of dollars you have to spend. We have done television, radio, and print, and spent a lot of money doing it. I have tried texting programs, I have tried emailing programs, and I have experimented with a number of other services. So far I do really like the Fanminder product.
What makes Fanminder different from some of the other marketing platforms you’ve tried?
One thing I really like about Fanminder is how easy it is to create an offer. And not just any offer, but a good-looking professional offer with backgrounds and graphics and photos. With Fanminder, I can create my offer and send it to people who have smartphones. They can get beautiful graphics; not just ugly text. That very same offer that I send out to my mobile fans, I can immediately post to Facebook and Twitter. I can do it all in the same application at the same time. I also like the fact that it is trackable, so I can go in and see how many people have downloaded the offer and how many have actually redeemed the offer. That is very helpful.
What types of offers are you running with Fanminder?
So far, we have done two kinds of offers. We do ‘Specials,’ which might be something like, “Come in on Monday or Tuesday night and get a four-course dinner for two for $65.” They aren’t specific 20%-off or $10-off offers, but they are discounted depending on what [the customers] choose and which entrees they pick. It’s not a specific discount or dollar amount — that’s our ‘Offers.’ That one is specific, like “Save $10,” or, “Get 20% off.” Those are the two main things I have used Fanminder for, but I do plan to use it further. They have come out with different types of promotions or announcements. If you have a special event that you are hosting, you can just blast that out; it’s an announcement to let people know what is going on. Or if you have done something in the restaurant — like adding a new item to the menu — then you can blast that out to let your fans know.
“With services like Groupon, you are kind of giving away the store just to get people to come in for the first time. Those people aren’t generally the ones who keep coming back; they are just redeeming the coupon.”
Who is getting the messages you’re sending out?
It’s mostly our existing customer base. Spending all this time and money marketing to the masses — and giving away a lot of money, in terms of discounts to bring in business — [seemed] a little backwards. I know you have to do that to get people in, but what about the guys that come in all the time? Shouldn’t we be incentivizing them, thanking them for being loyal, and giving them discounts? That’s where I have changed my focus. I want to spend less money trying to get somebody in the door the first time. We did try Groupon, but with services like Groupon you are kind of giving away the store just to get people to come in for the first time. Those people aren’t generally the ones who keep coming back; they are just redeeming the coupon. I thought, why am I doing that? My customers would appreciate it more and come in more often if I was targeting them; giving them reasons to come back more often. That has got me more focused on Fanminder, because it really is marketing to my most loyal fans.
People can actually get on our list in several ways. We have table tents in the restaurant, there is a short code [customers] can text to get on the list, they can join through our website, or they can ‘like’ our Facebook page. If they ‘like’ our fan page, they are just going to get offers posted on Facebook, whereas if they text, then the offers go right to their cell phones. Right now, I have another service that I am using [for our email database]. I used Constant Contact to build up that database — we are probably up to 3,500 [addresses] right now — but I switched off of Constant Contact and I am using a modified Salesforce.com application for sending emails now. I have somebody that does that for me. When people make a reservation through OpenTable or through our website, we get their email address and we will add that to our database, so that is another way that people can get our messages, offers, and specials.
What kind of costs are involved with the deals you offer through Fanminder?
It has been a long time since I looked into that because it just automatically bills to our credit card and I don’t really see it. But my recollection is there is a minimum you pay to be able to send out offers, and then [beyond that] it is based on how many offers you send. It’s mainly based on the text; that is where the cost is. The cost is based on the number of text messages you send out for the month.
Looking forward, what kind of marketing goals or plans do you have for the future?
When they roll out the email capability, I will probably roll everything into Fanminder. There are features that I’m waiting for them to implement that I know will make things a lot easier, like scheduling my offers and being able to reschedule old offers. Also, [I’d like to] be able to go in and modify offers. We have standing offers, but I’d like to go in and change the expiration date and re-issue them. Right now, they don’t have that capability. I think social media is going to continue to gain traction and momentum, and I’m hoping to build up our [Facebook] fan base. We are at 700 right now, but we have 3,500 in our email database. If I could get that many on the fan page, I would be very happy. I definitely believe that online is a good place to be, because it’s where people are these days and it is cost effective. You get so much more for your money than you can get in any other way.
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This interview has been edited for length and clarity.