There is no goal more important in the current financial climate than for every business to increase its turnover and to attract new customers. Every sector of the economy is feeling the burden and the extra stresses being exerted by the financial downturn. A drop in personal disposable incomes has been compounded by the almost overnight disappearance of access to affordable credit from lenders.
The situation has created a perfect storm of lower incomes and fewer options, which many businesses continue to struggle against. From heavy industry to the services sector, companies are discovering that the challenge is neither expansion nor profitability, but simple survival. And the key to success can be summed up with a single word: innovation.
Nowhere is this more true than in the restaurant industry. Since the fallout from the banking crisis began to be felt on main street, a rapid loss in the number of eating establishments has been reshaping the landscape of the American restaurant industry.
The majority of establishments which have disappeared are the smaller, independent enterprises. The ones which have survived are those which have seized control of the situation, and found success by exploiting new opportunities in a shrinking – and increasingly competitive – marketplace.
The most common concern voiced by businesses owners when presented with the advice to innovate is the expectation of extra costs, which they believe are an inevitable part of re-appraising an existing business. The good news is that even the smallest of changes to the way you do business can offer marked improvements to both turnover and reputation.
The key is knowing how best to use the tools at your disposal. One way in which restaurateurs are changing the way they do business is by moving into the virtual space of online marketing and social networks.
The food service industry is a relative latecomer to the world of e-commerce and online markets, primarily because the nature of the business does not lend itself especially well to online purchases. However, as the reach of social media expands further into our everyday lives, we are discovering new platforms and methods of selling our brand, and our business identity across the worldwide web. From the countless online platforms vying for attention, Yelp.com is the one which has generated perhaps the greatest impact in the restaurant industry.
Put simply, Yelp allows customers and consumers to review and rank local businesses in their area. Although it has existed since 2004, Yelp has recently introduced a new set of tools for businesses, which can help them to assess the amount of revenue generated specifically from Yelp’s online traffic. The service ties in with Yelp’s phone app and allows business owners to distinguish genuine customer leads from simple page views. This means that users who search for directions, place a reservation, make a phone call, and write a review are used to calculate the revenue stream which each business has gained solely through Yelp.com alone.
Exploiting online services is both cost effective for the smaller business, and provides up to the minute data: where the analysis and number-crunching have been provided automatically. These tools allow business owners to manage both expectations and inventories, whilst also giving a concise, statistics-backed picture of any perceived problems in the customer experience should they arise. But how can bars and restaurants use this to their own advantage?
Though the restaurant industry is becoming a more hostile environment for the independent establishments, that trend is reversed online, where the little guy is thriving. Web-based platforms such as Yelp embrace individual companies and artisan producers over large chains and multinational brands. A small business which advertises on Yelp and receives a place of prominence amongst the online community can expect an average increase in turnover of $23,000 a year, while every additional star on a positive review amounts to a five to nine per cent increase in revenue.
Online platforms create an invaluable connection between businesses and consumers. Every successful bar and restaurant knows the importance of word of mouth recommendations, and a happy customer is the best form of advertising that any business can hope for. With the latest generation of social media, word of mouth has gone global, and with it, the potential reach of your own business identity.
This article was contributed by BusinessesForSale.com, the market-leading directory of business opportunities from Dynamis, the online media group also behind FranchiseSales.com and PropertySales.com
Is your bar or restaurant utilizing Yelp? Have you found that it is helping increase your bottom line?