Irina Avrutskaya discusses how restaurants can adapt their marketing strategies during economic crises to attract more customers and increase profits. She notes that customers typically cut back on dining out and move to cheaper restaurant segments during downturns. However, some restaurants still experience growth. She provides recommendations for restaurants, including introducing lower-cost menu items, focusing on quality, implementing loyalty programs, celebrating holidays, and attracting customers from closing competitors. The key is understanding changing consumer behaviors and capitalizing on opportunities presented by the crisis.

1. FoodService Magazine, July 2015
Irina Avrutskaya
Marketing Expert
Make the Crisis Work for You!
During any crisis people start “counting their pennies” and save on “unnecessary” expenses which include eating out.
Irina Avrutskaya, a leading restaurant marketing expert, talks about how the consumer behavior changes during
difficult times and how one could capitalize on it in order to raise the restaurant turnover and keep profitability.
It’s obvious now that the crisis which started in 2014 has seriously hurt the restaurant industry, having touched almost
all its segments. Unlike the global recession of 2008-2009, today’s situation is exacerbated by the food embargo,
higher inflation rates, profoundly decreasing purchasing power and a sense of political instability. The market
participants note a 10-30% fall of revenues, an all-round reduction in profits and most disturbingly the experts are
united in their outlook that from the beginning of the crisis in 2014 until the end of 2015 up to 25% of the restaurants
will be forced to close down.
On the other hand, many restaurant concepts, and this is not only limited to fast food concepts, experience explosive
growth. Interesting to note that according to the classification made in a research on consumer behavior during the
said crisis in 08-09 (Profisearch, February 2009), services of cafes and restaurants were classified as having “unsteady
demand”. In other words, these are the expenses on which people are ready to save in the first place, however, under

2. certain circumstances; people are also ready to pay more for those services. Why is this happening and how do you
capitalize on this change in consumer behavior during a crisis? We’ll try to answer these questions in this article.
Where do the guests go?
First of, let’s analyze where and why the guests go during a crisis.
Today the market shows an obvious trend whereby consumers are moving into lower price segments. However, it’s
important to understand that a guest primarily seeks not just to save on lunch or dinner, but he or she is interested in
purchasing a product similar to yours for a lower price. So what should a restaurateur do in such a case? His first
priority should lie in retaining the guest!
In the fine dining segment, which is the most vulnerable during times of crises, one of the possible strategies could be
opening an additional outlet offering a similar menu with more affordable prices. The guests can be sure of the service
quality, will easily take this alternative and the “shrinking” restaurant with higher prices can eventually be closed.
In other segments of the restaurant market a reasonable step would be the introduction of low-cost items in the key
categories – meat, fish, and expanding the assortment of inexpensive alcohol and non-alcohol beverages. The key point
is not to call this introduction “anti-crisis menu” and overall to avoid usage of any negative or ambiguous words.
This being said, it’s essential in both cases described to organize all activities based on a guest data base, which needs
to be created and well maintained, in order to involve them in a loyalty program later on (how to work with loyalty
programs during a crisis we’ll discuss later).
Another aspect is the tendency of the guest moving from the higher price segment to the lower one, which will allow
well-prepared restaurants to attract new customers. Knowing your upper scale competition will give you a clue from
which restaurants new guests could be coming from. And while you previously did not consider these “higher price”
restaurants as your direct competitors, you should be well aware of those “down-shifting” guests, and possibly develop
local marketing activities aimed at attracting customers from those restaurants.
The second shift is a movement in the opposite direction: guests from the lower quality outlets are moving into the
higher quality ones. And ‘quality’ here shall mean not only the quality of food, drinks, and service, but also additional

3. services and the overall comfort of your restaurant. In order to retain your guests and attract new ones it’s important
to focus the guest’s attention on the quality and freshness of ingredients, work on the service quality, share positive
feedback from guests in social networks and expand the overall restaurant offer. Free Wi-Fi, live music concerts, free
parking, kids’ entertainment – all these nice additional features are able to raise the quality level of your store as
compared to its competitors. And definitely you shouldn't disregard interior renovation.
The third guest flow direction is to new restaurants. The gastronomic culture in our country today is experiencing
growth and despite the difficult economic situation, there appear more and more new places and the interest in them is
as high as never. If your restaurant is 5-7 years old, it’s hard to compete with new fashionable places, but it doesn’t
mean that it's impossible to invent something interesting. The illusion of novelty can be created by frequent menu
renewal (not less than four times a year), constant introduction of “today’s specials”, renovation of the facade and
interior, arrangement of pop-up dinners.
Last but not least, it’s quite obvious that the market is also facing a reduction (‘outflow’) of guests who are not dining
out, although the numbers are not as considerable as the previously mentioned movements. First of all the least well-
to-do social groups stop eating in restaurants, those who can replace their lunch in a café with food brought from
home. These guests are the hardest to keep because the price factor is their main decision criterion. A possible loyalty
instrument for them may be the so called stamp-card which is a card for a free lunch or a gift after a certain amount of
purchases. Such bonus should be significant and the speed of its achievement should be high. Not the 10th
or the 12th
lunch for free, but the 5th
or the 6th
one – only such an offer will interest guests lacking financial prosperity. Another
interesting alternative for such guests is an offer for inexpensive lunch in a “to go” format, as people start saving not
only money, but also time during a crisis. Besides, packed food may compete with cooked food from supermarkets
which is often chosen as an alternative to a business lunch.
Don’t forget that the guests from restaurants which are closing now and will be closed within the next year will also
need to go somewhere. And this may reach up to 25% of the market. Those guests will need to eat somewhere and
wouldn’t it be great if they chose your restaurant. That’s why you should start monitoring the market now and develop
your plan of marketing activities close to the (restaurants) trade outlets near you which are closing.
Stake on Emotions

4. The second question to ask yourself at this stage: Why have the guests started to spend less and can you push them to
make more expensive purchases?
As I mentioned before, guests of restaurants and cafes may generally spend more, but only under certain conditions.
If we analyze the sales dynamics at the food market we’ll see the following consistent pattern: during a crisis people
first cut costs on alcohol and sweets, and the least on baby and bakery foods.
The research executed by Profisearch also found that the major motivation for making a more expensive purchase in
the public catering industry during a crisis is the desire to spend on a “holiday” or a “present”. Also, though to a lesser
degree, the motivation for purchasing more expensive services is the intention to indulge and treat oneself or the
choice of high-quality service “for children/family”.
Using these valuable findings we can suppose (this hypothesis should be confirmed by you with the data from your
sales reports) that the reduction in consumption, if any, is primarily with regard to alcoholic drinks and desserts. But if
the guest here do not want to treat themselves… I believe that it’s worth to take the initiative and treat them! Offer a
free appetizer or apperitive/digestive to your guest and the positive emotions after this kind gesture in many cases will
make him or her spend more in your restaurant.
Take care of the kids, their comfort and entertainment, and a grateful parent will be ready to thank you by paying
more.
Announce discounts or a significant present to everyone who celebrates his birthday or any other holiday in your
restaurant.
Celebrate important events, as well as national, state and city holidays.
Develop and sell gift certificates.
It’s important not to abuse upselling methods (or as they are often called, imposed sales) when one is offered a more
expensive dish or drink than originally chosen: not Russian beer, but imported one, not just a hamburger, but a bacon

5. one, not a regular, but a large cappuccino cup. During a crisis the guest is sensitive to the amount of his or her bill, and
it's essential to give him full control over the amount he actually spends in your restaurant.
Sometimes they come back
Another important factor directly related to the fall or rise of revenues of the restaurant is the frequency of guest
return. Therefore, the third question to ask oneself is: Why did our guests start visiting us less frequently and what can
we do to make them come back?
During a crisis the frequency can reduce significantly, that’s why loyalty programs are useful now more than ever.
However, it’s important to understand that during a crisis guests become less interested in programs connected to
long-term point collection and account more for receiving fast or even momentary privileges. For this reason, as
traditional bonus system start losing their effect, it’s worth developing additional temporary stamp-cards (mentioned
above) or return bonus coupons for the next visit. It's important to mark an expiration date on such coupons and hand
them out in return for personal data of your guests that you can later use in your CRM-system.
One of the most significant features of today's crisis, which makes it different from previous ones, is the overlapping of
the food embargo factor. The times now are the toughest they have been for large restaurant chains and food retailers,
which are just not able to purchase food products equivalent to the barred ones from small local producers due to the
large amount of volumes required. As a result, the menu of large restaurant chains thins significantly, so as the
supermarket shelves, and the consumer turns confused, not knowing where to buy decent replacement, for instance, to
Italian sausages and cheeses. For many restaurants such situation is a unique chance not only to expand their offer for
loyal guests by selling great Georgian burrata or Russian bresaola, but also to attract new guests disappointed in the
lack of food product choice on the store shelves.
Therefore, there are plenty of ways to play on the change of consumer behavior and market structure.
Interestingly enough though, that Tatyana Matyushina, RANEPA (The Russian Presidential Academy of National
Economy and Public Administration) professor, mentioned in her recent lecture Anticrisis model of consumer behavior of
the Russians that the influence of the crisis is the least on those restaurants which have unique conceptual positioning.

6. That’s why to be sure ask yourself the fourth question…
Cautious Growth
Restaurateurs often use price increases in order to raise the check and keep the sales margin. Sometimes it’s
inevitable, but you shouldn’t forget that guests now are especially sensitive to a change in price. And your temporary
increase in revenues may give way to an abrupt outflow of transactions in a month or two, which tends to happen in
most cases. But if you can’t avoid increasing the prices then it’s better to do it gradually, not more than for a quarter of
your menu items and in parallel with a renewal of the menu. Just to illustrate: a price increase in the fast food segment
will be noticeable to the guest as of 2-3%, in casual dining at 5% and slightly above that for the fine dining segment,
all possibly resulting in a loss of transactions. Therefore, it is essential to handle such a sensitive topic strategically and
with great care.