Common wisdom in the restaurant industry says that 80 percent of a store's business comes from a three to five-mile radius. A second rule of thumb is that it is easier to increase business with existing customers than it is to win business from new ones. Current customers take less encouragement to come back than coaxing new customers from their favorite pizzerias. Therefore, activities that get current customers to visit more often create a higher return on investment.

What is neighborhood marketing?

Neighborhood marketing, or "local store marketing," is a plan to build sales in a small geographical area without using mass media. In order to be effective, your program must create a coordinated marketing plan that is specific, measurable, and consistently executed. The goal is to help you develop lasting relationships within your community in order to build your image and your sales.

It is also critical to include a business-to-business program. At the heart of its success is a commitment to build relationships, give back to the community, and create a venue for social activity or entertainment that serves the needs of local customers. Whether you are part of a large chain or a single-store operator, a focus on local involvement in your small radius reinforces your best chance to build sales.

Some typical activities for a neighborhood-marketing plan are below. In addition, consider internal merchandizing such as signage and menu merchandizing. Never forget to include your employees in your programs, as many of them live locally and have friends and family in the vicinity.

Business-to-business neighborhood marketing techniques

• Host a local wine or book club.
• Partner with other local retailers.
• Sponsor a local school event.
• Give a matching donation to a local charity.
• Participate in local athletic programs

Individual customers neighborhood marketing techniques

• Create frequent diner cardsHave a birthday incentive.
• Send email notices about daily specials.
• Have a referral incentive program.
• Offer gift cards.

If you do not know how to design neighborhood-marketing programs, many restaurant consultant groups can assist you in creating effective programs. There is also a great deal of information available on the Internet and at industry trade shows.

Word-of-mouth is the No. 1 reason a new customer chooses a restaurant. I recommend eWordofMouth.com, an online lead referral program. Many programs generate email messages. eWordofMouth has a unique referral feature that rewards a person with free food if their friends sign up and visit.

Finally, as Shakespeare said, imitation is the highest form of flattery. Notice what busy restaurants do to create traffic and model their ideas for your location, style, menu type, price point and budget.

Attract local customers with neighborhood marketing, and measure your results. This will create a steady stream of repeat customers and keep your restaurant as a "household" name in your community.

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