Profits Hiding in Plain Sight
Operating a restaurant in a pandemic is a lot like trying to drive on a flat tire before it burns through to the rim. Half of the time, you’re rethinking internal systems and how to assemble them in new ways. The other half, you’re just trying to keep the business running and avoid any major potholes. There are many different ways to thrive in a new normal, but if you’re not looking for the profits hiding in plain sight, it might be time for a tune-up.
While the ideals and principles of hospitality is what defines our industry, restaurants at the core are a sales-led business. As an operator, you are most likely focused on revenue and how that measures up to the cost of doing business. While you are considering how to best optimize your guest experience and simultaneously manage your human capital with the goal of turning a profit, it is our goal to point out how technology, while not always obvious, can help.
Here are 4 ways technology can increase sales:
1. Own Your Own Customers: Customer Retention and Loyalty
Q: “What do you want for dinner?”
A: “I don’t know, check seamless”
How many times have you been part of the above conversation? We get it, and we’ve all been there. Delivery marketplaces are an excellent platform to browse a variety of menus and cuisines. But the key to increasing and growing sales from DSP’s is to own your customers and market to them directly.
Third-party food delivery platforms market brilliantly to both consumers and restaurants. Customers are given financial incentives (often times at the cost to the restaurant) and they encourage restaurants to post links to their apps on restaurant websites and social platforms. While this benefits customers, it also discourages them from ordering through your platform directly. The best way to guide customers to your platform is to remove all other options for ordering — and when they do order from a 3rd party, you can direct them to come to you direct next time. How so? Provide a QR code with each delivery that allows the customer to scan for a percentage off their next delivery which leads back to YOUR website. Or how about incentivizing a guest to order again by gaining points through a loyalty program that YOU manage. Chew on these numbers…
· 75% of consumers say they favor companies that offer rewards.
· Increasing customer retention by just 5% boosts profits by 25% to 95%.
· The probability of selling to an existing customer is 60–70%.
Successful online delivery programs will work successfully with 3rd parties to generate leads, and then custom white-label ordering and loyalty to keep your guests coming back.
Branded’s Tech Picks:
White-Label / Native Delivery: GoParrot
2. Gifting Revenue.
Gift cards provide a great revenue stream — they bring in cash immediately and are minimal COGS. I know what you’re thinking, Gift Cards have been around forever, but they don’t do much for my business. You’d be correct in that assessment, which is why Branded wants you to re-think this $150 BILLION DOLLAR a year industry and modernize your gifting platform. Over 50% of SMB restaurants don’t have an online gift card platform (which means about half the market isn’t even trying). And here’s what we know about gift cards: (i) consumers love free stuff; (ii) merchants need customer acquisition solutions; and (iii) birthday loyalty and network programs work.
Branded’s Tech Pick can have a gift card button added to your website and social media pages in 24 hours and you’ll start selling gift cards immediately. Your front of house operations is already set to validate, redeem and tender. And here’s what you’ll get, just 1 extra gift card sale per day will drive your business 1,500 extra covers per year which equals a 2% to 3% increase in gross annual revenues.
This is not your grandparents gift card strategy. This is a modernized and digitized platform that is much more about a lower cost customer acquisition and engagement strategy than anything else and it comes with complete and crystal-clear attribution.
Branded’s Tech Pick: GiftLocal.com
3. Streamline your Human Capital: Using tech to manage your employees and patch any holes with automation:
Technology changes the way HR departments contact employees, maintain employee files and analyze employee performance. Used well, technology makes HR practices more efficient. Good HR practices maximize the benefits and minimize the problems. In an environment where personal interaction is minimized, the digital tools available to recruit, hire and most importantly, maintain employees is proving to be just as successful as in-person recruiting (and in the case of retention, the tech platforms are proving to be more successful). And once an employee has been hired, tech is the name of the game to keep employees engaged and accountable for their jobs and duties. Gone are the days where cell phones were banned on the floor. Now, employees can track cleanliness and health code requirements as well as collect payment and orders all through a mobile device. The BYOD revolution is upon us and its no longer just for the customers.
Digital in store services such as kiosks and self-pour beverage walls can be used alongside employees to save on labor and increase sales. Restaurants and Bars lose 23% of their beverage inventory to waste and freebies. Self-pour waste is less than 3%. A self-serve beverage call can also decrease labor by 20% or more and increase overall beverage net profits by 45% or more. That is something we can all toast to.
Branded’s Tech Picks:
For Self-Pour: PourMyBeer
4. Optimizing the Customer Experience: Giving the power back to your guests
If your business isn’t focused on customer experience at every touch point, you’ll be severely limiting your growth. Companies need to be receptive and customer-centric if they want to thrive in this climate. This starts with an authentic focus on providing a superior customer experience which can now be assisted with technology.
Let’s start at the beginning of a meal. Give your guests the ordering power. While any restaurant can offer a QR code that will take a customer to an online menu, the restaurant putting the buying power in the hands of the guest is seeing the higher profits. How many times have you wanted that extra glass of wine, but by the time the server came over, your dish was finished and so was the desire for that extra drink? For operators, the codes can help solve the labor crunch brought on by the pandemic by requiring less waitstaff. They also offer an opportunity to engage more deeply with guests by including built-in customer satisfaction surveys. This brings us to the end of a meal.
“Wait, before you go…” “We’d love your feedback”! …. “Tell us how we did!” … How many times have you left a restaurant only to find a note to provide feedback when it’s too late. Incorporating a digital guest experience survey before a customer leaves is an opportunity to collect actional guest feedback so you can fix anything in seconds and get instant insights to improve. Guests want to be heard, so give them an internal platform before the search for it elsewhere.
Branded’s Tech Picks:
For In-Store Mobile Ordering: Bbot
For more information on Branded, how to implement tech into your business or for more information on any of our tech picks, please reach out directly.