Did you know that 60% of restaurants fail during the first year and 80% of them don’t get to celebrate their fifth anniversary? This is due to several factors, but mainly a lack of proper market research for restaurants.
Without due diligence, you risk making decisions that will prevent you from opening and running a successful restaurant long-term.
In this article, you will find a thorough guide for restaurant market research:
The benefits of market research for restaurants
While market research for restaurants is a must before opening the business, it is important to repeat it often because it will help you adapt to changes and keep on top of trends. Here are the benefits you will enjoy if you do proper research:
- Create an efficient marketing plan: if you identify your audience and opportunities, you can create targeted strategies that are more likely to help you reach your desired goals;
- Come up with a Unique Selling Proposition: by analyzing your competitors and knowing what the market craves, you can create a USP that attracts customers and helps you stand out;
- It will make attracting new customers easier: market research helps you get to know your target market better. If you know their expectations and preferences, you can create an experience they will want to repeat time and time again;
- Discover new revenue opportunities: while you may have an idea of what your restaurant would look like, market research can help you understand the industry better and come up with new ways to maximize revenue;
- Come up with solutions for various challenges: doing market research doesn’t just help with identifying opportunities. It also allows you to discover potential problems so you can come up with solutions to prevent them.
Read more: 5 Strategies to Include in Your Restaurant’s Marketing Plan
What are the two types of restaurant market research
Before we get into the step-by-step guide, you must know all your options and choose the best one for your business. There are two main ways to conduct market research for restaurants:
Primary market research for restaurants
This is the most common type of market research, but we recommend you combine both of them for the best results. You will have to do the following:
- Competitive analysis: you will find out how much competition you have, how well your competitors perform, and learn from their mistakes and successes;
- Focus groups: depending on your goal, you can invite your target market to learn more about their preferences;
- Online surveys: you will be able to reach a bigger number of people and learn about their purchasing and dining practices.
Read more: 25 Restaurant Survey Questions to Help You Gain Valuable Insight
Secondary market research for restaurants
This type of analysis can help you identify your position in the market. It gives you a complete overview of the market’s external environment. Here are some resources you can use to keep up with trends:
- Industry reports: if you want to remain relevant, you need to know about the actual consumer behavior and culinary trends. Read industry reports, such as the ones from the National Restaurant Association to keep up with the latest news;
- Statistics sites: good choices are based on statistics, not guesses. Check statistics sites to see important information such as pricing levels, demand for a certain product, menu item popularity in a specific location, etc.
- Case studies: look up studies related to the type of restaurant you want to open and the type of cuisine. You may find tips on what marketing strategies to use and how you can best please your customers.
Read more: Growing Trends: Online Food Delivery Statistics 2024 [Infographic]
How to do market research for a restaurant
The secondary market research is self-explanatory, you just look up resources and try to find information relevant to your business. That’s why, we will be focusing on primary market research for our guide.
There are two main ways to do it:
- Qualitative: usually involves interviews and focus groups
- Quantitative: is done through experiments, polls, and surveys
7 steps for qualitative restaurant market research
Be it interviews or focus groups, qualitative research allows you to learn first-hand about your audience’s opinion. If you want to learn more about your customers’ experiences and preferences, follow these steps:
1. Choose a goal
What are you hoping to accomplish by doing market research? What do you want to find out? Here are some objectives examples:
- How to improve customer satisfaction
- What type of menu items clients prefer
- What dining experience is more appealing to your target audience
- What prices are clients willing to pay
Read more: How to Set Restaurant Goals and Lead Your Business to Success
2. Settle on a location
You want the people you interview to feel comfortable, so they can truthfully answer your questions. Take into consideration that you will also have to record the answers to review them later, so you will need a quiet space.
3. Prepare the restaurant market research questionnaire
A focus group is not a casual conversation, you will have to come prepared with questions that help you reach your goal. Here are a few tips:
- Limit yourself to 10-12 questions. You don’t want the event to be too long or you lose the participant’s attention;
- Only include several questions where people can answer only “Yes” or “No”. Use open-ended questions to get more detailed answers;
- Use the funnel approach, where you start with broader questions and follow up with more specific ones.
Let’s see a restaurant market research questionnaire example. If your goal is to find out what expectations clients have regarding a fast-food restaurant, you can ask:
- What colors do you usually associate with a fast-food restaurant?
- How does the perfect fast-food restaurant décor look for you?
- How long are you willing to wait for an order at a fast-food place?
- What are your favorite fast-food dishes?
- What types of foods you would like to see on a fast-food menu, but haven’t encountered yet?
- What type of service do you like at a fast-food place?
- What promotions would persuade you to immediately order?
- How do you prefer to order your food online?
- What is the price range you are willing to pay for certain dishes?
- How big do you like your fast-food portions to be?
4. Find participants
The most important rule for focus group participants is that they should be objective. Therefore, they can’t be your relatives or friends because that may skew their answers. The usual number for a focus group is between five and ten participants.
You can place an ad on social media to get people to participate. If you don’t have a big budget, you can offer discount codes or gift bags.
5. Ensure you are doing everything by the law
For the focus group to deliver the results you hope for, you will also have to gather demographic information from your participants such as age, gender, city, marital status, income bracket, and profession.
You will also have to record the answers to be able to analyze them afterward. Therefore, you will need to have the participants fill in a release form and a GDPR one to be able to process their data.
6. Hold the focus group
During the focus group, it is important to be friendly and maintain eye contact, so you can encourage participants to open up. Furthermore, nudge people to stick to the questions and persuade them to a more specific answer if you are not satisfied with the replies.
7. Analyze your findings
After you have all the answers written down, try to identify patterns. Did more people mention the same thing? You can use the findings to mold the restaurant to their preferences, so you are sure to have a large number of upcoming clients.
5 steps for quantitative market research
Quantitative market research involves less time than qualitative, and it focuses on the numbers. By doing surveys, you can reach a larger number of people and find out their preferences. Follow these steps for an efficient online survey:
1. Choose a goal
What is it that you are hoping to accomplish with this survey? Do you want to know what type of promotions work for your audience? Or what does their perfect dining experience look like? Once you settle on a goal or more, it will be easier to create the questions.
2. Come up with restaurant market research survey questions
Compared to qualitative research, here you must forget about open-ended questions. People don’t have a lot of time to complete surveys, especially if they are not paid generously, so keep it short and only use close-ended questions.
3. Create the online survey
With a simple Google search, you can find a variety of tools to use for your online surveys. Choose the one that best fits your needs and budget.
4. Test and distribute the survey
Before you send out the survey, always test it on some close friends to ensure it can be completed fast, the questions are easy to understand, and there are no errors.
Afterward, you can distribute the survey to the targeted respondents suggested by your chosen tool. If you don’t have a big budget, you can try to get answers from your network and followers on social media.
5. Analyze your findings
Just like for the other type of market research for restaurants, you must identify patterns. This lets you in on the way the majority thinks. Use the information you gained to better your restaurant.
Final Words
Don’t sleep on market research for restaurants. It can seem like an extra step before opening or too much effort when you run the business, but it can be immensely helpful to identify revenue opportunities, cater to the target market’s needs, and prevent problems.
You might also like:
- 10 Restaurant Marketing Trends You Need to Capitalize on in 2024
- 10 Must-Have Marketing Tools for Restaurants to Take Advantage of
- 10 Tips to Devise an Innovative Marketing Strategy for Your Online Food Business
