When you decide you want to become a restaurant owner, customers are top-of-mind. But are you targeting the right demographics? Too often, a restaurant fails because the restaurant owner did not do their homework, or relied on inaccurate data to attract the right customers.
Restaurants face an additional challenge when compared to other business models because they need to know how to target multiple demographics—couples, families, singles out for a night on the town, and everything in between. How can restaurant owners cater to these specific, but divergent, customer bases? What are the best practices they should heed before zeroing in on specific market segments? How can you glean data from your restaurant POS to make better business decisions?
So here it is, a rundown of everything that every restaurant should know about all things customer demographics.
Important Restaurant Industry Statistics To Know About Your Customers
Before diving into data on your specific restaurant, the smartest place to start is by understanding what’s going on in the restaurant industry as a whole. Not only will this give you a sharper perspective from which to analyze the findings of your customer demographics research, but it will prepare you for what you might find.
As you embark on your restaurant demographics journey, keep these essential restaurant statistics in mind:
- Forbes reports that millennials spend 44% of their money on food.
- Overall, diners are affected by factors like bad service, noise, prices, and crowds according to Zagat.
- Of the respondents to the Zagat survey, 83% said that they would or actually have planned vacations around eating at a certain restaurant.
- Millennials spend $163 per month going out to eat, while only 6% of millennials do not eat out month-to-month.
- Also according to Zagat, 52% of diners make reservations via the internet.
Understanding Restaurant Target Market Demographics
While it can sound like a complex and intimidating marketing term, target market demographics is something that’s actually pretty easy to understand with little more than a hard and fast definition.
As Chron explains, “‘a demographic’ is a slang term that refers to demographic segmentation,” which means that a demographic is basically a subsection of a larger population. For example, among human beings, males are one demographic and females are another demographic. This same logic can be applied to any group with the goal of breaking down who is in the group based on shared characteristics—anything from age or income to race or education level. Target demographics are just a particular group of customers, often based on demographics.
When it comes to the restaurant industry, in particular, defining your target demographic(s) can help you to avoid one of the most common mistakes restaurants make: trying to appeal to everyone. As the senior vice president of strategy and consumer insights at Arby’s told QSR Magazine, “obviously we want every person in America to eat at Arby’s more often, but part of designing your target and who you want to talk to is about making some choices and you’re going to prioritize some people over others.”
Success lies in reaching the people who will relate to, and want to eat at, your restaurant most rather than trying to entice everyone under the sun.
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What To Know About Your Customer Demographics
Whether it’s couples or families, or both, it’s imperative that a restaurant owner takes steps to understanding the customers. Knowing your demo is key to improving business as well as attracting and retaining customers. But before you go gathering stats on all the people who walk through your doors, you first have to understand what it is you’re looking for in the first place.
You’ll want to start by understanding the demographics of your geographic area. As Restaurant Engine explains, some information “will surprise you with its usefulness. [The author read] that about half of Manhattan residents live in single-person households. This type of demographic can have an important effect on your restaurant’s target market.”
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Once you have essential information about the people who live near your restaurant, the next step is to start researching trends. If your restaurant is located in a college town full of students, take a look at what is trending among college students this year and what the projections are for the future.
It might seem strange, but the element you’ll want to analyze is your competition. Think about it like this: If you and a competitor are in a small market and they have a certain section of the population covered, wouldn’t it make sense to focus on the populations whose dining needs aren’t yet being met?
Last but certainly not least, you’ll want to uncover everything you can about your current customers and what makes them tick both inside and outside of your restaurant. The people who are already coming to you are gold mines of information about what your particular draw is.
How To Get Restaurant Customer Demographics For Your Restaurant
Now that you have all of the background information you need and all of the how-to’s under your belt, it’s time to put all of that new information in action and actually define the specific demographics for your restaurant in particular.
In order to understand who your customers are exactly, try to answer:
- Who is your best existing customer? What is their customer lifetime value?
- How old are they?
- Are they male or female?
- Do they have kids? Do they use high chairs?
- Are they married? Do they typically dine in a group?
- Where do they live?
- How do they spend their money? Are they frugal or extravagant, or do they fall somewhere in between?
- How do their purchases compare to your average ticket?
This type of in-depth analysis is essential if you want to flesh out in greater detail the profile of your target audience.
Other ways that you can find out information about customer demographics include:
- Calling your local Department of Commerce to get statistics, such as census data, on a subgroup you’d like to target within your community. Get as much information as you can on your demo. Be insatiable in your appetite to learn all you need to know about the customers you want to entice. Use this data for targeted promotions and incentives.
- Leveraging resources from companies such as Upserve’s restaurant management platform, which provides information to merchants about demographics based on customer purchases. Doing so will give you a clear-cut idea on your demo’s purchasing behavior, as well as their history of interactions with your brand.
- Furthering your brand and heighten your audience engagement through social media. Have you set up Facebook, Twitter or Instagram accounts? In this 24/7 digital age, it’s a best practice. The give-and-take of customer interaction on these sites will not only help you promote your message but act as a catalyst in gaining insight into what makes your target audience tick.
- Going to events or conferences that cater to your target audience. For instance, if your restaurant attracts families, then there’s a booth with your name on it at the upcoming kids’ expo. If they’re not going to come to you, then you go to them. Be proactive in your targeted marketing.
Once you have all of this information gathered, the next step is to weave it all together so that you can answer the five most important questions about your customers according to Food News Feed:
- Who are they? This one should be pretty easy and straightforward after all of your demographic research. Are they mostly older or younger? What’s their income bracket?
- What do they order? It might seem obvious, but many restaurants skip this important question because they think they’ve answered it with their inventory. But do you know if they tend to opt for happy hours or late night specials more often? Also, how did they feel about the food? Just because they’re ordering it doesn’t mean they liked it and reviews are key.
- When do they visit? While how long lines and reservation ques are can be one way of figuring this out, the more sophisticated tools you employ to really understand this, the better.
- How long do they stay? It’s important to know not only when your busy times are, but how long they stay. Are there certain times that they stay longer?
- Why do they come back? Your secret sauce revealed! There are so many choices out there for dining and drinking—what keeps them coming back to your restaurant, specifically?
Information is power and knowing your demographics is critical to maximizing your chances of realizing your goals and achieving success when you become a restaurant owner.
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