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Head-to-Head Competition

Should you play Offense or Defense?

In the 2018 Super Bowl, there were four auto manufacturers competing directly against each other. Fiat Chrysler advertised Ram and Jeep; Toyota ran spots for its namesake brand as well as Lexus; Hyundai continued its “Better Drives Us” theme; and, Kia paid a big price to advertise for the ninth year in a row.

Have you ever faced direct, head-to-head competition like that?

Real Life Competition

My wife and I have enjoyed many dinners at Macaroni Grill which was located right next to the Chili’s Mexican Grill. We were saddened recently to see that Macaroni’s closed but were excited to see what new restaurant would take its place.

We came to find out that it will be Habanero’s Mexican Grill.

Hmmm. Two “Mexican grill” restaurants right next to each other. And, as you can see by the Chili’s restaurant in the background, I mean right next to each other.

How would you deal with a head to head competitor…whether it is right next door, advertising in the same media channel or simply providing the same service?

To answer that question for Habanero’s and Chili’s,  I spoke with restaurant marketing specialist Matt Plapp. He shared a few thoughts regarding offensive and defensive tactics.

Habanero’s – beef up its offense by:

  • Growing a database as quickly as possible. “Get the customers’ info so you can continue to drive them back into your restaurant.” Matt explained that placing an ad or coupon in a mailer does not capture information that is useful for bringing those customers back in for a repeat dining experience.
  • Getting involved in the community. Matt suggests claiming a presence at high school football games, at community events, and at church events shows that this new business cares about the local residents.
  • Getting a digital marketing program in place as soon as possible. The goal is to “create a monthly marketing plan to reach out to (customers)…and drive them into the restaurant, in a predictable manner, with trackable offerings,” as stated in Matt’s new book, Don’t 86 Your Restaurant Sales. 

Chili’s – some of thedefense” may be a little different than you might imagine:

  • Matt suggested that Chili’s – a nationally known, familiar brand – should not even acknowledge that Habanero’s opened up next door.
  • Like any restaurant – either a newbie or a “big name” – top notch food and service should remain Chili’s priority.
  • Protect and continue to grow its database – for the same reasons Habanero’s needs to quickly grow its new database: bringing customers back for repeat business. Systems that collect information that’s placed in a digital marketing program is key.
  • While not usually a priority for large corporations that spend more on national advertising, Matt maintains that getting involved in the community helps attract the attention and loyalty of the locals.

Matt Plapp’s book Don’t 86 Your Restaurant Sales is available at www.MattPlapp.com or by connecting with Matt on Facebook via Messenger.

But Drew, I’m Not In the Restaurant Business!

There are always lessons to be learn that are applicable from one industry to another.

For example:

If You Are New to a Competitive Market:

  • Requires an offensive mindset
  • Drive customers to a FIRST time experience
  • Deliver an exceptional FIRST time experience
  • Collect customer information to drive the SECOND time experience

If You Are Established and a New Competitor Enters the Market:

  • Requires a defensive mindset – 20% of your customer likely create 80% of revenue – Your top 20% are who you want to protect first.
  • In most scenarios, do not acknowledge the competitor to your customer as that simply creates more publicity and that is what they want.
  • Deliver an EXCEPTIONAL experience – competition makes you stronger.

Competition is part of what makes America great.

Habanero’s have been working on remodeling the Macaroni’s restaurant for months.  That’s a major investment.  They must have seen a significant opportunity if they are willing to set up shop right next door to Chilis.  I’ll keep you posted…and maybe take my wife on a date there in the near future.  We’ll test to see who delivers an exceptional experience.

 

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