Restaurant Target Market: How to Identify It and Why It Is Important for Your Business

If you are thinking of opening a restaurant or already own one that isn’t as successful as you wish, you must realize you can’t appeal to everyone. The first step towards a profitable business is identifying your restaurant’s target market.

Once you know who your target customers are, you will be able to better cater your business to their needs and preferences. This will convince them to choose your restaurant over your competitors.

In this article, you will learn how to identify your restaurant’s target audience and how to use this information to sell more.

What is the target audience of a restaurant?

Your restaurant’s target market is comprised of the people who are most likely to buy your menu items. Precisely, when we talk about a target audience, we refer to the type of customers you want to attract to your restaurant to provide the best possible experience.

If you want to find out who are the customers of a restaurant, you must analyze the following factors:

• Demographics: for example, age, sex, location, income, religion, education, etc.
• Psychographics: refers to the attitude, aspirations, and values a group of people shares
• Behavior: especially the habits related to restaurants like spending habits, digital behavior, and hobbies

Why you must define your restaurant’s target market

Opening a restaurant on a whim, without all the preliminary research and target audience identification is guaranteed to be a failure. You can’t survive in such a competitive industry if you don’t know who your customers are and how to attract them.

Identifying and understanding your restaurant’s target market has countless benefits for your business:

• Use the gathered information to create a business plan that is solely curated to your potential client’s preferences;
• Learn where you can find your potential customers and how you can convince them to order from you;
• Identify who your direct competitors are and how you can differentiate your business from theirs;

Furthermore, the information you learn about your customers will also play a large role in every part of your business, from menu creation and pricing to the type of promotions you use:

• Unique Selling Proposition (USP): this is the phrase that describes what makes your restaurant special and will be used on all channels to promote your business. It must resonate with your target audience, so when potential customers see it, they will feel instantly drawn to your place;
• Menu concept: if you want to attract a certain audience, you must ensure they like and usually order the type of dishes that are on your menu;
• Price range: your target audience must be able to afford the menu prices if you want to get more loyal customers;
• Location: if you don’t already have a location, you must choose one close to where your target market lives or works. If you already have a location, the people in the area must automatically be integrated into your audience;
• Marketing: if you know the digital channels they spend most of their time on, you can easily target them with relevant advertisements and attractive promo offers.

How to identify your restaurant’s target audience

When it comes to defining your restaurant’s target market, you have two main options, each one with its advantages and disadvantages:

• Hire an agency: they can do the work for you, and you can be as involved as you want. The downside is they will cost a lot of money that you may not be willing to invest just for this;
• Do it yourself: while it involves more effort, you not only spend less money, but you also get a hands-on understanding of your audience and what makes them tick.

While you may not have access to a team of surveyors, we can show you how to use the tools at your disposal to easily identify your target audience. Follow these steps:

1. Analyze your direct competitors

The easiest way to understand your restaurant’s target market is to analyze your direct competitors with whom you share it.

Not every restaurant in the area you are located or where you offer delivery is your direct competition, only the ones that have the same:

• Price range: if the price range differs too much, but you share the type of cuisine, they are considered indirect competitors;
• Type of cuisine: if you serve Italian food, you are not in direct competition with a place that only cooks Chinese dishes;
• Type of service: there are fast-food restaurants, casual or fine dining. Only look for the ones that offer the same type of customer experience.

After you made a list of direct competitors, it is time to analyze their online presence and visit their locations at different times of the day. Look for these criteria and try to discover patterns:

• The menu: is it written in a formal or informal matter? What is the price range? Or the tone used for the menu descriptions? What type of information do they offer (food allergens, nutritional information, specific diets)?
• Atmosphere: what is the age of most of the customers? Are there more women or men? Are people eating alone, with families, or in big groups of friends? What are people ordering the most? How are the clients dressed? Is the atmosphere lively with loud music or more subdued?
• Location: is the restaurant on a busy road with lots of foot traffic or in a more secluded area? Is it surrounded by many other restaurants?

2. Gather census and hospitality data

To learn more information about your potential clients, access the databases available in your area. Narrow down the location around your restaurant and look for:

• Census data: you will get access to your potential customer’s age, sex, household characteristics, marital status, household type, income, language, etc.
• Hospitality reports: either free or paid, they give you an in-depth look at client preferences regarding restaurant experience.
• Focus groups: you can get more in-depth information by gathering a group of people with no link to your restaurant and asking them about their eating-out behaviors and preferences. This may be a bit costly to organize to pay for a space and people’s time, but it can be worth it if you gather useful information.
• Look over restaurant statistics: if you use our online ordering system, you get access to the powerful Reports module that offers relevant restaurant statistics. You can see how many new or returning customers you have, what are the hours when you receive more orders and what are the most ordered menu items.
• Send out a survey: use the saved data from previous clients that used the online ordering feature and send them a short email survey to find out more about their preferences.

By leveraging these methods along with hospitality technology services, you can gain valuable insights into your target market and optimize your restaurant’s offerings accordingly.

3. Compile the gathered data to determine the target customer

So, you’ve gathered all the information from all the available sources. It is time to create a profile for your restaurant’s target market. Compare all the above, notice the patterns, and make estimations to determine:

• The demographics of your restaurant’s target audience: age, gender, location
• The psychographics of your target customer: chosen music, the preferred ambiance in a restaurant, their social values, and personal motivations for eating out
• The behavior of your restaurant’s target market: type of clothes, type of order, the price they pay for the food, the company they prefer while eating, where they spend their time online, what attracts and deters them to or from a restaurant

You will now use this data to create a buyer persona. A buyer persona is practically the average imaginary persona that encompasses all the found patterns. It is easier to cater your business to a singular character than a bunch of dispersed data.

Let’s see an example so it is easier to understand:

“John is a millennial in his thirties living in upper-west side New York. He likes to order food often on his own and go out with his friends on the weekend to dine. He likes to jump on trends yet has a healthy dose of nostalgia regarding his childhood. John spends his time mostly on Instagram and TikTok and is attracted to restaurants with unique concepts that offer a fun dining experience.”

Example of target market in food businesses

So you can better understand how the result of your restaurant’s target market analysis should look, we will help you with a restaurant target audience example for every type of service:

• The target market for fast food industry: “Jill is a baby boomer living in Lawton, Oklahoma who works a lot and has little time to eat. She enjoys efficiency at a small price, and what attracts her to a restaurant is convenience. Her preferred food is shawarma, burgers, and pizza.”
• The target market for a fine dining restaurant: “Leila is a high-earning millennial in upper-east side New York that likes to share unique food experiences with her partner. She finds restaurants by word-of-mouth and enjoys a luxury place that uses hard-to-find ingredients.”
• The target market for a casual restaurant: “Emi is a Gen-Z from London that likes to bond with their friends over tasty and unpretentious food. They go out often, so they prefer restaurants on the cheaper side. They like an unpretentious restaurant and spend most of their time online on TikTok.”

Final Words

Identifying your restaurant’s target market is an essential step in opening a successful restaurant. It gives you access to important insights about your customers.

With the data you gather, you can create a business plan that will make you stand out from your competitors and persuade potential clients to choose your restaurant every time.

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