Every restaurant business wants to make as much profit as possible… and more. And so, getting the most bang for your buck is the most critical aspect of running a restaurant business. As the restaurant industry continues to innovate to survive the trying times, it can be a daunting endeavor to figure out how to launch and execute restaurant marketing campaigns, and how to track them.

It is not an easy thing to do all of the above, and yet it is not impossible. In this article, we will explain why you should measure your restaurant ROI, and how to do so easily. Read on to find out.

Why should you measure restaurant marketing ROI from online campaigns?

So you recently ran a month-long marketing campaign on Facebook and Instagram. Lots of sales came in and at the end of the campaign, your whole team is exhausted from serving and dispatching so much food. 

But do you just down your tools and go home to rest? Well, no. There’s one last thing you need to do before you call it a day. It is one thing to have a successful campaign. It’s a whole different thing entirely to determining how much of a success it was.

When you create, calculate, and consistently monitor your marketing budget, you will not only be able to see how your marketing funds are performing, you will also gain important insights to make your future marketing decisions a lot easier. Of course, not all of your marketing expenses will be directly connected to dining sales, as there are many “soft” strategies that may not directly influence sales, but these will also work with your entire restaurant marketing strategy (for example branding and awareness). 

However, you still need to have a marketing plan, as well as a way to discover important information from every marketing push. Knowing these will help you to determine where exactly your restaurant is, where you want it to be going forward, and how to get there. Read on to find out how you can easier calculate your ROI and better understand your restaurant marketing.

How to calculate your restaurant marketing ROI

As a restaurant owner, you will ideally approach ROI as it relates to your top-line revenue and bottom line profits. Let’s paint a picture of a marketing campaign and how to measure it:

A San Francisco burger shop ran a Facebook ad campaign promoting a Buy 1 Get 1 Free offer on their cheeseburgers. The goal was to drive 3 times more delivery orders to the store. The campaign ran for four weeks and was and new users had to submit their phone numbers through customized automation in Facebook Messenger in order to automatically redeem the coupons at checkout. No coupon codes were necessary.

After the promo ends, what would the burger store manager do? They would need to count up all the orders that included the automatically applied coupon during the month-long promotion. Then, they would calculate ROI of the marketing campaign thus:

1. Total sales generated: all orders within the promo period where at least one user ordered the BOGOF burgers, i.e: top-line sales
2. Subtract the cost of goods sold to get the gross profit of the campaign.
3. Then, deduct the expenses to get the net profit. Because this was an online promo through Facebook ads, the expenses would be just the ad spend. 

Some other important restaurant campaign metrics

• Divide the total revenue by the total number of orders to determine Average order value (AOV). The Average Order Value tracks the average dollar amount spent each time a customer placed an order through the campaign. 
• Divide the gross profit by the total campaign expenses to determine the ROI. For example, if you spent $500 on the campaign ad, and you gained $2750 after the campaign. Then your ROI percentage would be 2750/500 = 5.5. This means that you gained 5.5 times the money you put into the ad.

We know that restaurant owners don’t have a lot of time. So what if you didn’t want to go through the rigorous process of making these calculations? We put together a quick and simple ROI calculator to help you get your ROI quickly. Oh, and it’s FREE too! Check out our FREE Restaurant ROI calculator.