By Ruth King
Jim and Mark each own and operate a restaurant.
Jim had a great weekend. The restaurant revenues were amongst the highest they had ever had. He was thrilled with the profitable weekend. Unfortunately, Jim didn’t really know who was dining in the restaurant. He did not instruct and train his staff to get the names of the diners, birthday dates, or other pertinent information to turn those diners into returning customers. He hoped that he would have another busy, profitable weekend.
Mark also had a great weekend. The restaurant revenues were amongst the highest they had ever had. They added 15 new diners to their frequent diner program (i.e. recurring revenue customers). Servers asked for, and received, these diners’ names, birthdays, anniversaries, and a physical and an email address to contact them. These 15 new diners would be sent emails and postcards which gave them a reason to return to the restaurant. These marketing communications were special invitations only for their preferred customers and included a free entrée or desert on their anniversaries and birthdays. Mark also planned special events only for program members throughout the year to ensure that there would be diners in his restaurant.
Mark knew that he would have many more, profitable weekends. He knew his customers. He sent them marketing messages giving them a reason to return. And, from experience, he knew the percentage that would return bringing potential new restaurant diners.
Which of these two restaurant owners really had a great weekend? Mark. He built profit AND wealth.
Fast forward to COVID-19. Which of these two restaurants do you think has the best chance of survival? Mark, of course. He has the customer base to contact his patrons with take-out and other specials to keep the restaurant alive. It might not be a sit-down, in the building type of restaurant any longer. However, his food and reputation will continue to bring customers to do business with him.
There are always economic ups and downs. Building profits and wealth is critical for survival. Profit and wealth are also critical to achieve your end game – whether it is to sell the business, turn it over to employees, or keep it running forever.
You must have profits which turn into wealth. What can you do to build profit AND wealth?
Ruth King is known globally as the “Profitability Master,” and is a a thought leader in entrepreneurship and business. Her books have been recognized as among the greatest in numerous industries. Learn more about all her business activities here.