u/IrvineGuitar

Why word of mouth is so inefficient

Reposting this.

WORD OF MOUTH IS INCREDIBLY INEFFICIENT FOR GARNERING CATERING JOBS

I want to propose a somewhat controversial stance. Word of mouth and referrals as a primary way to garner the high-margin catering business is incredibly inefficient.

I have demonstrated how catering is basically some of the highest margin business segment in our business. You can easily do in excess of 50% margins and many times over 60% and 70% as I detailed with my numbers and breakdown.

But how do people hire you for catering? The next time you get a catering inquiry, ask the client how they found you. Keep a log of all inquiries and keep track of how they found you and which ones actually book. You might be surprised.

After eight years in the game I can tell you that catering is more dependent on Google and Yelp search results than it is on people having tried your food, seen your truck or gotten a referral. Here are a few reasons why.

  1. Google and Yelp have way more reach than the small number of people you serve. Think about how many people use Google and Yelp every day.

  2. People basically hire caterers once a year or very periodically. I would put it at the same frequency as how often someone hires a plumber or a home improvement specialist. It is incredibly rare to even get quarterly caterings from the same client.

  3. People want variety. They don’t want the same vendors over and over again. If they did they would all just eat at Cheesecake Factory which serves nearly everything at a very decent quality and with decent portions with attentive service in a decent environment.

  4. NO ONE KNOWS YOUR NAME. I know this is gonna come as a big insult to those who really believe they are that memorable but no one remembers our name. If you depend on customers who tried you, saw you or remember you to hire you for catering as your primary method of getting them…you are gonna be sorely disappointed.

Let’s do the math. How many people do you get exposed to a day? Maybe 100-200? How many customers buy food? Maybe 50? So let’s multiply that by seven days a week and say you have 350 customers eating your food. And let’s assume everyone is BLOWN AWAY.

How many are gonna remember your name? I would guess less than half. So 175. Of those 175 how many people are gonna have an event where they need a truck in the next three months? A handful. Maybe. And how many are gonna remember you?

You keep taking this population of people and keep cutting pieces out to find people who saw you, tried the food, loved it, then remembered your name, and then had an event they needed to hire you for.

Small returns.

Do yourself a favor. Be searchable.

If you wanna do 200 caterings a year, you better have at least 600 customers. Most won’t repeat every year or several times a year. Most you will see once and never again.

Be realistic and you can figure out how to find catering jobs. Cast that net into a population that is actively looking for catering.

reddit.com
u/IrvineGuitar — 16 hours ago

Come on tech bros

I keep laughing at all the tech bros here trying to sell the idea of a QR code or getting customers to use technology.

Let me say this:

If you can’t get these customers to actually read a fucking menu with pictures, names and descriptions with prices…how the fuck do you figure they will scan a QR code into their phone and do the same thing?

Please…we all know customers don’t fucking read menus.

reddit.com
u/IrvineGuitar — 16 days ago

WHY WORD OF MOUTH IS INCREDIBLY INEFFICIENT FOR GETTING CATERING (BE SEARCHABLE)

I want to propose a somewhat controversial stance. Word of mouth and referrals as a primary way to garner the high-margin catering business is incredibly inefficient.

Catering is basically some of the highest margin business segment in our business. You can easily do in excess of 50% margins and many times over 60% and 70% as I detailed with my numbers and breakdown.

But how do people hire you for catering? The next time you get a catering inquiry, ask the client how they found you. Keep a log of all inquiries and keep track of how they found you and which ones actually book. You might be surprised.

After over nine years in the game I can tell you that catering is more dependent on Google and Yelp search results than it is on people having tried your food, seen your truck or gotten a referral. Here are a few reasons why.

  1. Google and Yelp have way more reach than the small number of people you serve. Think about how many people use Google and Yelp every day.

  2. People basically hire caterers once a year or very periodically. I would put it at the same frequency as how often someone hires a plumber or a home improvement specialist. It is incredibly rare to even get quarterly caterings from the same client.

  3. People want variety. They don’t want the same vendors over and over again. If they did they would all just eat at Cheesecake Factory which serves nearly everything at a very decent quality and with decent portions with attentive service in a decent environment.

  4. NO ONE KNOWS YOUR NAME. I know this is gonna come as a big insult to those who really believe they are that memorable but no one remembers our name. If you depend on customers who tried you, saw you or remember you to hire you for catering as your primary method of getting them…you are gonna be sorely disappointed.

Let’s do the math. How many people do you get exposed to a day? Maybe 100-200? How many customers buy food? Maybe 50? So let’s multiply that by seven days a week and say you have 350 customers eating your food. And let’s assume everyone is BLOWN AWAY.

How many are gonna remember your name? I would guess less than half. So 175. Of those 175 how many people are gonna have an event where they need a truck in the next three months? A handful. Maybe. And how many are gonna remember you?

You keep taking this population of people and keep cutting pieces out to find people who saw you, tried the food, loved it, then remembered your name, and then had an event they needed to hire you for.

Small returns.

Do yourself a favor. Be searchable.

If you wanna do 200 caterings a year, you better have at least 600 customers. Most won’t repeat every year or several times a year. Most you will see once and never again.

Be realistic and you can figure out how to find catering jobs. Cast that net into a population that is actively looking for catering.

reddit.com
u/IrvineGuitar — 1 month ago

THE MATH AS TO HOW MANY FOOD VENDORS A BOOKER SHOULD SCHEDULE AT AN EVENT

This applies only to events where there is no guarantee or prepaid meals.

Ever wonder what the right number of food vendors is for a given event? It’s actually not that hard to get an idea and it’s basic algebra.

Here are a few assumptions behind my math:

  1. Events inevitably tend to overstate their attendance.

  2. You need to haircut or discount the attendance estimate any organizer tells you. It’s generally optimistic and sometimes totally unrealistic and wishful thinking.

  3. Depending on the time and nature of the event, generally speaking 10% to 25% of attendees will eat.

  4. Have some idea of how long the average attendee stays. The longer they stay, the more likely they are to eat. The shorter they stay, the less likely they will eat at the event.

  5. Always make sure you know the surrounding area and whether there are other easily accessible (walkable or deliverable) food options.

  6. Always make sure you at everything BY THE HOUR. The same amount of sales in two hours vs. the same amount of sales in five hours is wildly different in terms of profit margins and preparation.

With that in mind, my general rule is that I take the organizer’s estimated attendance and discount it by 30-50% (usually 50%).

So let’s assume that the organizer says they have a big event where they expect 5000 people and that the event runs from 10 am to 5 pm. How many food vendors do they need?

First, know that the peak times to eat will be between 1130 and 230 pm. After 230 pm things slow down and it will be relatively quiet between 230 and 5 pm.

Second, how long are they gonna stay? That depends on the nature of the event. Let’s say it’s a concert so you might have people there for several hours. If it’s a car show they might stay 90 to 120 minutes and then leave.

Using my math, you can expect there to be 2500 that show up against the 5000 estimate. And of that, 10% to 25% are eaters so basically 250 to 625 eaters. If we plan for 625 people and the event is gonna be stacked with eaters from 1130 am to 230 pm you can expect most of those 625 to eat in three hours. So that means 208 eaters per hour.

If a truck or vendor can serve 60 tickets an hour (one per minute) then that means each vendor can do 180 tickets in three hours. And so with 625 potential eaters they probably need about 3.47 trucks (625/180) or call it four trucks. Or, 208 eaters per hour divided by each truck’s ability to do 60 meals per hour means 3.47 trucks (208/60).

Anything else will be excessive. And remember that most good and established trucks can do well in excess of 60 tickets an hour.

THE CALCULATION

So going back to the math…take the estimated attendance and divide it by 2. Take this number and assume 10% to 25% of those people will eat. That’s your range of true eaters.

Look at service times and decipher which are the true likely hours for service. Typically 1130 am to 230 pm and then 5 to 830 pm. Anything outside those hours means weak sales.

Take number of eaters and divide by number of hours of service. That’s total eaters per hour.

Assume each vendor can serve 60 tickets per hour. Take the total eaters per hour (calculated in step 3 above) and divide by 60. That’s how many trucks you should have at the event.

That’s a guideline. Obviously it could be higher or lower. Thanks for coming to my TED talk.

reddit.com
u/IrvineGuitar — 1 month ago

Tech bros and app pimps

Stop pitching us on your shit.

Best Food Trucks and Street Food Finder already do it. And better.

And they have users. You don’t.

So just stop it. We don’t care. Save yourself the time. Unless your time is worth nothing.

In which case…why are we talking with someone whose time is worth literally nothing?

reddit.com
u/IrvineGuitar — 2 months ago

I feel sorry for those who are dependent on tomatoes

25 lbs. used to be $20-22. Last last I think it was at $88 at Restaurant Depot.

Green leaf lettuce was $18. Now like $33.

If you believe gas prices are gonna come down…you are like the girl who believes the guy who says “Trust me. I promise I won’t come in your mouth THIS TIME.”

Oh, and $6/gallon gas. Fuck us all.

reddit.com
u/IrvineGuitar — 2 months ago

These are the things that make us money. This one is a prepaid catering.

How we do it in LA. Every truck has a different allocation. We have 200.

u/IrvineGuitar — 2 months ago