Defining Your Restaurant’s Target Market
What type of guests fill your restaurant seats? Are they sports fans stopping by to watch the big game and grab a bite to eat? Or business professionals meeting clients for lunch? Your marketing approach and messaging depend on the answer.
Customer profiles also affect decisions about your restaurant concept, menu items, and loyalty program. Learn how to increase restaurant sales by defining your restaurant’s target market.
Who are your target customers?
Your target customers represent a group of people you cater to and are most likely to want what you sell. They share similar demographic, psychographic, and behavioral traits. Your target customers are a segment of your target market, which may include people in certain income levels or age groups.
Why define your restaurant’s ideal guests?
Establishing a guest persona is the first step to ensuring everything you do goes over well with your customers. Once you complete target market research, you can apply it to the four P’s of marketing:
- Product. Design menus and add items based on what your restaurant guests want and need.
- Price. Understand what your guests are willing to pay and balance that with your profit margin.
- Placement. Go to where your customers are — don’t expect them to come to you.
- Promotion. Decide which channels and messages help you connect with your target guests.
Business planning: Startups vs. established restaurants
When starting a restaurant, your market research plays a huge role. As part of your business plan documents, you use target market research to prove that your concept is financially feasible.
From there, your data informs each step you take, like devising your concept, picking a location, designing a menu, and developing your Facebook marketing plan. Completing this work before you open your restaurant reduces some of the risks of business ownership.
However, guest behavior and demographics may vary over time. You can use point-of-sale (POS) data, social media analytics, and website analytics to uncover how your target market changes over time.
Restaurant target market examples
Think about a few different restaurants and how their target markets differ. For instance, food establishments in a college town may advertise to Gen Z adults. But a sports pub will focus on a different segment of Gen Z adults than a coffee cafe with poetry readings.
Use these restaurant customer profile samples to model your guest description:
- Target market for a fine dining restaurant: Upscale diners who want high-quality food and service. They’re willing to pay more money for a classy experience, from a restaurant’s ambiance to its top-shelf specialty cocktails.
- Target market of a burger business: Depending on your restaurant’s location and business model, a burger business can cater to customers wanting fast or quick casual food at lower price points or folks willing to pay more for organic Angus beef from a local farmer.
- Target market for a buffet restaurant: Perception of value and choice are key for buffet restaurant guests. Your demographics may include blue-collar workers, seniors, and families.
Defining your restaurant’s target market in 5 steps
Gather data about your ideal guests and use it to inform your decision-making process. When defining your restaurant’s target market, you’ll find answers to questions, such as:
- Who lives or works near your restaurant?
- What is the household makeup of the local population?
- Is your location in a residential or business area?
- How do people get around in your community?
- What hobbies or activities interest your guests?
- What do they do online and on what type of devices?
1. Perform a competitive analysis
A competitive analysis is a critical element of your marketing and business plans. Grab a bite to eat at a few direct or indirect competitor’s restaurants. You may even visit an establishment outside of your geographic location that’s the inspiration for your restaurant. While there, order a meal and observe everything, including:
- Menu. The price range for meals and drinks, style and tone, format, and number of food items by category.
- Ambiance. The overall feel of the restaurant, music choice and sound level, decor, and general atmosphere.
- Customers. Style of dress, age range, men to women ratio, and group size.
Add to your competitive analysis by reviewing the key differentiators of each business. Then head online and check out websites, social media pages, and loyalty programs. Does your competition offer 15-minute lunch promotions, delivery service, or catering for local businesses? Is their loyalty program text-based or email-based?
Each detail gives you insights into the types of people who may visit your restaurant. By reviewing your competition, you can identify gaps that your business can fill.
2. Complete restaurant demographic research
Find out the basic details about your target market. This information includes age, generation, location (urban, suburban, rural, or tourist), and income (low, middle, or high). There are several ways to find out this information, such as:
- Use the US Census Business Builder to get data about your target market.
- Talk to your local small business office.
- Ask your Chamber of Commerce for city-specific details.
- Study recent reports from the Pew Research Center.
- Run POS reports to find the frequency of visit, ticket size, and average group size.
- Review social media analytics to uncover data about your followers.
- Check out the latest data from the National Restaurant Association.
3. Add psychographic and behavioral data
While knowing ages and income ranges is essential, learning details about hobbies and desires helps you further segment your audience. Dive into psychographic and behavioral data. This information enables you to personalize your messaging and promotions.
Psychographic data is when you identify your customer’s values, concerns, motivations, and what gives them satisfaction. You want to find out why they go to restaurants or order delivery. A sports fan may wish for a spirited atmosphere with many TVs, whereas a business professional looks for places with a professional or calming atmosphere.
Behavioral data reveals your guests’ habits and hobbies. It shows how your customer’s psychographics result in actions like reading reviews, checking out restaurant websites, or watching big sporting events outside of their home.
Gather psychographic and behavioral data by:
- Social media polls. These ask one question and give users a choice of four answers. Polls are best for filling in data gaps about specific topics.
- Surveys. With a survey, you can narrow down preferences using close-ended questions that ask people to rate their feelings on a scale.
- Personal experience. Talk to folks and get anecdotal information about what they love or hate about dining out.
4. Evaluate your data
If you already have an established restaurant or an idea in mind, use your data to validate who your target customers are and uncover any gaps in your service. Doing so can help you tailor your messaging, come up with new promotions, or revise your menu prices.
For new restaurants, use data to ensure your target market can afford your menu prices, pinpoint where your marketing will be most effective, and understand what draws people to establishments similar to yours.
5. Develop ideal customer personas
With your spreadsheet of information before you, it’s time to create a customer profile. Your persona should be easy to read and feel like a round-up of your favorite movie character. Marketers often name their personas because it helps to visualize a real person.
Many restaurant owners create primary and secondary personas. This works well in situations where your guests vary by time of day or year. For instance, a restaurant may market to business professionals at lunch but offer live music or comedy events that attract a different crowd at night.
Example restaurant customer persona:
Kim is a 32-year-old woman who grabs a meal or snack with clients several times a week. She works in public relations at a corporation in the business district, earning roughly $55,000 per year. Kim rents an apartment and owns a car.
Her psychographic data reveals that she enjoys traveling to new places and trying ethnic foods. Kim places a high value on appearances and personalized services. She’s motivated by professional growth and fitness.
Kim’s behavior shows that she frequently meets clients at food establishments with a professional vibe during or after work hours. She prefers restaurants with spacious seating and low background noise. Kim spends many hours online for her job and personal life and considers an online presence critical to business ownership.
Use your ideal guest research to fuel sales
The more information you have about your community and customers, the better positioned you are to deliver the dining experiences they want. By defining your restaurant’s target market, you have a clear view of who you’re selling to and can act accordingly.