3 Ways to Lose Customers Before You Have Them
If you’re like most new food experience business owners, you’ve focused a lot of attention on how exactly you are going to acquire and keep customers. You’ve considered your marketing plan, budgeted for advertising, maybe you’ve even worked out the details of the loyalty program that will incentivize customers to spread the word about your food and keep them coming back for more.
But all the paid advertising in the world won’t sustain your food business long if you make these three big mistakes…
Mistake One: Being Greedy when Pricing Your Menu
You’re in business to make money. And while it’s important to price your menu items so that you’re covering your costs and making a reasonable profit, it’s also important not to price your items so high that your customer’s leave (or never show up in the first place) because they feel like they’ve been overcharged.
Most food experience companies have a rule of thumb that you take your food cost and multiply it by three to arrive at your target menu price. This approach to pricing does provide a baseline to cover costs but consider your target market when using this approach.
If it costs you $3.50 to make a burger, this pricing strategy would have you charge $10. Let’s also say it costs you $2.50 to make your chicken sandwich. Our sales price with the 3x’s strategy would be $7.50. Which item do you think you would sell more of at these prices?
Odds are, it’s going to be the less expensive one. Is your customer willing to pay $10 for a burger? Most small town kitchens would say no. But would they be willing to pay $8.50 for the burger and the chicken sandwich? It’s more likely.
So what do we do? Do we not offer a burger because our customer base won’t pay what we need to charge to follow the 3x’s model? Of course not. Move to considering a profit per item method instead.
Once you’ve determined what your minimum profit per item needs to be, price your menu accordingly and only raise prices on items that can bear it in your market.
Mistake Two: Delivering Something Different than What You Advertised
Customer satisfaction is ultimately all about expectations. If your customer expects to have “The World’s Best Cup of Coffee” and gets something that’s equivalent to sludge, that’s a dissatisfied customer.
An important part of your food experience business is delivering on what you advertise. Don’t say that you have the best burger or sandwich or customer service if you don’t. It sets an unrealistic expectation for your customer that you will never meet. And what happens when we are disappointed with something? We tell people about it.
But what if we exceed our customer’s expectations? Then they’re apt to make a recommendation and continue coming back. Meeting expectations isn’t a bad thing either but exceeding is much more helpful in building your brand and customer base.
Does that mean we shouldn’t advertise the great things about what we do and who we are as a company? No. It means we should be keenly aware of what those things are that we do very well and set a customer’s expectation accordingly.
Mistake Three: Being Unresponsive to Customer Feedback & Requests
When we start our food experience company, we have a vision. We have a vision for the food, the atmosphere, the flavors and the types of people who will love our vision. But then, we open the food truck windows or restaurant doors and it doesn’t go exactly the way we planned.
Our customers are saying the price is too high. They don’t like the way a certain dressing or sauce tastes. Maybe they don’t understand the food we are trying to serve. We have two ways that we can respond.
Either we dismiss the customer feedback and say, “they just don’t get it” or we listen and say, “how can we make it better”.
There’s a fine line between completely abandoning your original vision and pivoting to better meet your customer’s needs. I’m not suggesting you completely change your food concept or that you slash every price across the board but I am saying that you need to give serious thought to what your customers say.
If pricing is a concern, quickly introduce some lower priced options to see if they sell better. If flavor of a dish is a concern, try a different flavor profile or combination to achieve the same idea.
Honest feedback from your customers is the best gift they can give you in addition to a sale. Take it, respond and invite them to continue participating in the process of making your food experience company better.
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