Chapter 27 — Quiz

Twenty-four self-check questions. Answer from memory first; the key is collapsed at the bottom.

Multiple choice

1. The denominator of cost per cover acquired is: - (a) all covers in the period - (b) all covers where a promotion was redeemed - (c) incremental covers that would not have happened without the spend - (d) distinct guests served in the period

2. Bellwether's marketing budget of \$23,250 represents what percentage of its \$1,550,000 year-one revenue plan? - (a) 0.75% - (b) 1.5% - (c) 2.5% - (d) 3.5%

3. At a 4.6 review average, the number of five-star reviews needed to offset one one-star is: - (a) 4 - (b) 7 - (c) 9 - (d) 19

4. A four-star review received by a restaurant holding a 4.6 average: - (a) raises the average slightly - (b) lowers the average - (c) leaves the average unchanged - (d) depends on the total number of reviews

5. The highest-value single field on a restaurant's Google Business Profile is generally: - (a) the business description - (b) the primary category - (c) hours, including special hours for holidays - (d) the number of photos

6. A \$10 discount against \$18.40 of contribution per cover requires what share of redemptions to be incremental in order to break even? - (a) 18.4% - (b) 35.7% - (c) 54.3% - (d) 100%

7. Google states publicly that local search results are driven principally by: - (a) advertising spend, review count, and website quality - (b) relevance, distance, and prominence - (c) category, photos, and posting frequency - (d) review average, response rate, and hours accuracy

8. Chapter 1 characterized press coverage as: - (a) a supply-side event that lowers cost structure - (b) a demand-side event that does nothing to cost structure - (c) the most reliable predictor of survival - (d) irrelevant to independent restaurants

9. Cash received for a gift card is, until the card is redeemed: - (a) revenue - (b) deferred marketing expense - (c) a liability - (d) other operating income

10. Bellwether's cost per cover acquired at plan — the full budget divided by first visits — is: - (a) \$0.64 - (b) \$2.57 - (c) \$5.15 - (d) \$18.40

11. Which of the following is an owned channel? - (a) the Google Business Profile - (b) the email list - (c) a local newspaper review - (d) a paid search campaign

12. Review gating means: - (a) responding only to reviews above three stars - (b) routing likely-unhappy guests away from public review platforms - (c) delaying review responses until the end of the month - (d) restricting which staff may respond to reviews

13. Bellwether's contribution per cover, established in Chapter 23, is: - (a) \$18.40 - (b) \$23.25 - (c) \$46.00 - (d) \$73.60

14. Of the 36,140 covers in Bellwether's plan, the share that marketing is accountable for acquiring is: - (a) 100% - (b) 75% - (c) 50% - (d) 25%

15. Marketing text messages in the United States are governed principally by: - (a) CAN-SPAM - (b) the TCPA and FCC rules under it, plus state analogues - (c) the Consumer Review Fairness Act - (d) the Credit CARD Act of 2009

16. Which of the following is not a CAN-SPAM requirement for commercial email? - (a) a valid physical postal address - (b) accurate header and sender information - (c) a clear opt-out that is honored promptly - (d) prior express written consent before the first message

Short answer

17. State the one-star offset identity and compute it for an average of 4.5.

18. Bellwether's blunt cost per cover is \$0.64. Why is that number misleading, and what should replace it?

19. What is the only durable output of a press spike, and how would you measure it?

20. State the incrementality identity for a discount offer. Explain in one sentence why an access-based reward has no incrementality bar at all.

21. Name three fields on a Google Business Profile whose errors directly cost a restaurant covers, and say how each one fails.

22. Why does this book refuse the widely repeated claim that one star of rating is worth a specific percentage of revenue, and what does it offer in its place?

23. Name the five purpose buckets in Bellwether's \$23,250 budget and identify the largest.

24. The "\$0 marketing plan" costs no cash. What does it actually cost, in hours and in dollars, and why does that cost appear nowhere in the marketing line?

Answer key **1.** (c) — incremental covers, evidenced. Redemptions are not automatically acquisitions. **2.** (b) — \$23,250 ÷ \$1,550,000 = 1.5%. **3.** (c) — $x = (4.6 - 1) \div (5 - 4.6) = 3.6 \div 0.4 = 9$. **4.** (b) — it lowers it. Any review below your current average pulls the average down, so above 4.0 a four-star review is a downgrade. **5.** (c) — hours. A guest who drives to a closed restaurant does not reschedule. **6.** (c) — $r \ge D \div C = \$10 \div \$18.40 = 54.3\%$. **7.** (b) — relevance, distance, and prominence. Only relevance is meaningfully under an operator's control, and it is mostly data entry. **8.** (b) — a demand-side event. It fills the room and changes nothing about food cost, labor, rent, or prime cost. **9.** (c) — a liability. It is not sales until it is redeemed, and it will make a December bank balance look better than a December P&L. **10.** (b) — \$23,250 ÷ 9,035 first visits = \$2.57. **11.** (b) — the email list. The profile is rented from a platform, press is earned, and paid search stops the moment the budget does. **12.** (b) — routing likely-unhappy guests away from public platforms while soliciting happy ones. Platform policies generally prohibit it, and it also corrupts your own data. **13.** (a) — \$18.40, which is \$46 × 0.40. **14.** (d) — 25%. Marketing buys the first of each guest's four visits: 9,035 of 36,140 covers. **15.** (b) — the Telephone Consumer Protection Act and FCC rules, plus several state statutes with private rights of action. Damages are assessed per message. **16.** (d) — prior express written consent is the SMS standard under the TCPA, not a CAN-SPAM requirement for email. **17.** $x = \dfrac{A - 1}{5 - A}$. At 4.5: $3.5 \div 0.5 = 7$ five-star reviews. **18.** It divides the whole budget by all 36,140 covers, three-quarters of which are return visits that marketing did not buy — they were produced by the food, the room, and the service. Replace it with cost per cover *acquired*: budget ÷ first visits = \$23,250 ÷ 9,035 = \$2.57, and then adjust it downward for attribution you cannot defend. **19.** The guests who came during the spike and came back. Measure it with the host-stand question during the spike weeks, then check the visit count of those guests at ninety days. The spike itself is not the output; the retention of the spike's guests is. **20.** $r \ge D \div C$, where $D$ is the discount and $C$ is contribution per cover. An access reward — the first booking on the new menu, a seat at the counter, a hard-to-get Saturday — sets $D = \$0$, so the bar is zero and any incremental visit at all is pure contribution. **21.** Any three of: **hours** (a guest drives to a closed restaurant and eats elsewhere permanently); **the address pin** (dropped on the loading dock, sending a party down an alley at 7:15 on a Friday); **the phone number** (forwarded to a line nobody answers); **the menu link** (a 4 MB PDF that will not open on a phone); **attributes** (missing "reservations" or "wheelchair accessible entrance" fails a filtered search by a high-intent guest); **a leftover previous-tenant listing** on the same address. **22.** Because the figure travels without a source — it appears in trade articles citing consultancies citing studies of other industries — and a book that dismantled the 90% failure myth cannot then quote an unverified elasticity. In its place: the offset identity $x = (A-1)/(5-A)$, which is a definition rather than an estimate and therefore true. It tells you what a bad review costs to *undo*, which is actionable, rather than what it costs in revenue, which nobody has demonstrated for your restaurant. **23.** Foundation \$6,470 (27.8%), frequency \$5,280 (22.7%), neighborhood \$5,200 (22.4%), acquisition \$4,300 (18.5%), contingency \$2,000 (8.6%). **Foundation is the largest** — photography, website, and print, which are the raw material every other channel runs on. **24.** About five hours a week of the front-of-house partner's time — 260 hours a year, roughly \$6,500 at a \$25/hour replacement cost, or 28% of the entire marketing budget. It appears nowhere in the \$23,250 because an owner-operator absorbs it into a salary already sitting in the labor line, which is exactly why it gets stopped in month seven when service gets busy.