How Do I Compete With a New Restaurant?

Focus on great food and service at your restaurant
Ask for feedback about your menu to improve service. Tookapic via Pixabay

Dear Guide to Restaurants,

A new restaurant just opened up down the street from my restaurant. It serves a similar menu and the prices are in the same range as mine. How can I compete with the new place? I don’t have a lot of money for a big advertising campaign. I know some of my customers have gone there a few times already. How can I get them back and keep my other customers?

Check Out Your Restaurant Competition 

I used to cringe whenever a new place opened up near my restaurant because people like new things – cars, clothes, movies, and restaurants are no exception.

When new competition comes to town, a dip in business is inevitable. If it is lasting more than a few weeks, you should start looking at ramping up your advertising (which doesn’t have to cost a lot of money) and closely examine your menu and customer service. Get your hands on a copy of your competitor's menu (because they most likely have a copy of yours) and see what they’re offering, and at what prices. You don’t want to duplicate their menu, nor do you want to undercut to a point where you are losing money. You can try offering specials and other promotions, like two-for-one menu specials. This is also a good time to make sure your menu prices reflect the correct food cost. Read more about menu pricing.

Ask Your Customers What They Like About Your Restaurant (or Don’t Like)

Next, ask for feedback about your restaurant. It allows you to catch problems before they get out of control and also lets you know what you’re doing right.

A great way to get that feedback is thorough customer comment cards. Comment cards are an opportunity for customers to both praise your restaurant and make suggestions. They offer instant feedback for servers, food, and atmosphere. While you will likely receive some criticism, many restaurant staff will be pleasantly surprised at the amount of positive feedback customers leave on comment cards.

Read more about how to design a restaurant customer comment card.

Use Social Media at Your Restaurant

Sometimes your customers need a gentle (or not so gentle) reminder that your restaurant is still around and kicking. Social media marketing campaign offers restaurants an opportunity to sell their product and services (think beyond the dining room to catering, merchandise and gift certificates). Social media utilizes sites like Facebook, Twitter, Flickr, Pinterest, Yelp, Foursquare, Stumbleupon, Revver, and Instagram and help build an online identity for businesses. Plus they are free and not too terribly time consuming once you’ve set up accounts and pages. Another bonus – they allow you to follow your competition online. Read on for a complete guide to using social media at your restaurant.

Turn You Servers Into Sales People

Along with good customer service, training your staff to upsell, can help improve customer experience as well as increase check averages. Up-selling should be part of your employee training. All servers should know the basics of up-selling, from offering top shelf liquor to knowing how to give a mouthwatering description of menu items. Up-selling not only increases restaurant sales, it makes for bigger tips for servers and it shows customers that your staff is knowledgeable as well as friendly.

Read more about upselling.

The good thing about new competition (or old competition, for that matter) is that it keeps you on your toes. If you’ve lost customers to new restaurants, ask yourself – what are they getting there, they aren’t getting at you r place? Send in scouts to check out the menu, the ambiance, the style of customer service.