Before You Increase Your Marketing Spend
The Trigger
A hospitality venue wants to grow revenue. The operator is considering increasing spend on marketing to attract more customers.
The Assessment
Before committing to increased marketing spend, the following questions establish whether the venue's existing demand capture is operating at capacity.
Question 1: Is the venue capturing the customers it is already attracting? Marketing spend generates awareness and intent. Customers who respond to marketing activity may call the venue to place an order, make a reservation, or ask about specials. If the venue is currently missing a material proportion of its inbound calls, marketing activity sends more customers to a channel that cannot capture them. The awareness spend is partially wasted.
Otto research across 1,067 Australian hospitality venues establishes that approximately 1 in 3 calls go unanswered, and 70% of those missed calls are revenue-related. A venue spending on marketing to attract new customers while missing a third of its inbound calls from existing and interested customers is generating demand it cannot fulfil.
Question 2: When does call volume peak relative to when the marketing effect is felt? Promotional activity tends to drive call and order volume during peak periods. Customers who see a promotion act on it when they are making a dining decision, which is typically during evening service windows. These windows coincide directly with The Friday Night Problem. Marketing spend that drives peak-period demand into a venue without phone channel infrastructure compounds the loss.
Question 3: What is the cost per acquired customer compared to the cost of retaining existing demand? Acquiring a new customer through paid marketing costs more per transaction than retaining an existing customer. A customer who called and could not get through is an existing or interested customer who has already been partially acquired. The cost of capturing that call through phone automation is lower than the cost of replacing that customer through paid acquisition.
The Framework
Increasing marketing spend is the right answer when the venue's existing demand capture channels are operating at capacity and the constraint on growth is awareness or reach.
Optimising the phone channel is the right first step when the venue is missing a material proportion of its inbound calls, because those calls represent demand the venue has already paid to generate through its existing brand, reputation, and prior marketing activity.
Related pages
Version 1.0, Effective June 2026