Helping out your competition

busy restaurantSparked by a comment on twitter recently by Justin Levy, co-owner of a restaurant and social media proponent.

I own a restaurant and we’re doing great due to SM. But I see a lot of restaurants closing which sucks to see happen

he was replying to this question by Dave Ferrick:

Last few local restaurants I visited in the past 3 months said they’re closing down despite excellent service. SM Gurus where are you?!

The sad truth of a weak economy is that discretionary spending is one of the first things to get cut – we go out a little less and we spend less when we do. Restaurants are one of the first businesses to feel the pinch, certainly the more up-scale and generally ‘better’ ones. Conversely, McDonald’s and KFC are doing bumper business.

If you’re a restauranteur and you’re weathering the storm ok, consider who else you could help. Let’s face it, people won’t eat out at your place every time they eat out. You probably eat at other restaurants yourself, to check out the other guys, or maybe just for a change. If you’re a tex-mex joint, why not work with your favourite local sushi place? It’s possible for restaurants to succeed by working together – you’re not competing in the traditional sense that McDonald’s and Wendy’s and Burger King do. If most of the restaurants in your neighbourhood go out of business that’s not going to help you in the end – people will go to other neighbourhoods to eat because there’s not enough choice where you are.

Where I live there’s a loose chain of restaurants under the Ambiente banner. They have their own identities, unified by a core brand. Why is it a loose chain? Check out their site – there’s no more than two restaurants of any single concept – Brazilian, Cafe Savoy, Pasta Fresca, Pasta Caffe and Living Restaurant (think TGI Fridays’ menu but with more class). Each restaurant is a franchise, odd – when you consider what they’re really franchising is an umbrella brand rather than an operating manual driven system like McDonald’s. But it’s more than that – there’s co-marketing/cross pollination going on, on a variety of levels: gift certificates valid in all the restaurants, postcards for the other restaurants in the reception areas, city centre maps showing all the locations, advertising for the other restaurants in the rest rooms. They also have supply-side deals that bring them cost savings and consistency.

Granted, Ambiente is an integrated franchise operation but it’s clear to see that together these restaurants combine to create something much bigger than each could achieve on their own.

How far you go in co-operating with your fellow restauranteur is up to you – whether you teach them how to use social media to reach out to their patrons in the same way you are, share some of your marketing ‘special sauce’, do some co-promotions, run tasting stands at local events together, or just work with them on a basic reciprocal level of ‘when you hand the customer their check, also give them a coupon to come try my restaurant’.

If you’re doing any of this, or any of this applies to you and is helpful, let me know. If you’re interested in exploring the possibilities presented here and would like to talk through how you could make them work for your business, get in touch with me via twitter or by email – my inbox is always open.

Photo credit: Punch Pizza

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