Using Data to Boost Profitability

 
A report on the state of the industry.
A report on the state of the industry. Thinkstock

The state of the full-service industry and data you can use to improve the bottom line.

With recent reports showing restaurant sales and traffic trending down over the past few months, it’s important to understand how your business measures against full-service industry benchmarks. Toast took a close look at 700 full-service restaurants to analyze what sells the most and why, ultimately answering the question of whether upselling or improving table turn time is more important for full-service restaurants.

Key Findings

Full service restaurant offerings can essentially be split into three categories: food, alcoholic drinks, and non-alcoholic drinks. Appetizers and desserts can also be considered a separate category to see if these items bring in more sales or result in longer table turn times.

We found some interesting statistics:

  • Out of menu items sold, 62 percent is food, 15 percent is non-alcoholic drinks, and 23 percent is alcohol.
  • Guests who purchase appetizers, alcohol, and dessert on a single check will spend on average $2.34 extra per minute. That’s the difference between a guest staying 30 minutes and spending $100 without appetizers, alcohol, and dessert, and a guest staying the same amount of time and spending $170 with those items.
  • Guests who order alcohol spend 101 percent more and stay 48 percent longer.

This is not too surprising, but here are a few findings that really did stand out:

  • Guests who order dessert spend 82 percent more and stay 19 percent longer.
  • Guests who order appetizers spend 76 percent more and stay 20 percent longer.

Those are pretty significant numbers. Beyond those who order alcohol, customers who choose to order an appetizer or dessert represent your best and highest spending customers and are key to your restaurant’s success. Cultivate those relationships to ensure that they are also among your most frequent and most loyal.

Below are a few more strategies full-service restaurants can take to improve efficiency and increase average check size while keeping the guest experience in focus:

Menu Strategies

Separating menus for beer, wine, cocktails, and dessert gives servers additional touch points with guests. Each of these menus should incorporate top-notch design with guest psychology in mind. A quick tip is to feature more profitable items and best-sellers high on the menu and items that aren’t very popular or profitable towards the bottom. However, menu perfection doesn’t stop there; you can also use menu engineering, an empirical way to evaluate current and future restaurant menu pricing along with real restaurant data to influence decisions about design and food offerings.

The industry best practice is to update menus four times a year; try this with your food, dessert, and alcohol menus.

Table tents are also helpful in enticing and influencing guests. These can be used to showcase your most delicious alcoholic drinks, appetizers, and desserts with the goal of getting guests to stay longer in your restaurant and spend more.

Staff Training Strategies

One of the variables in this data that is particularly important for full-service restaurants is the restaurant staff. Some team members are natural at upselling, and for others, it is a skill that can be learned. To start, make sure you hire people who embody your restaurant’s core values, and can represent them on the floor.

Then, train your staff every day on your restaurant’s best offerings, how they should interact with guests who have questions, key words they should use to describe your menu offerings, and natural phrases for upselling. Use pre-shift meetings wisely, perhaps setting a goal for the servers and chefs to strive for or a friendly competition.

Restaurant Reporting Strategies

With data, you can tell a story about the success (or failure) of your full-service restaurant. Without it, you’re just throwing spaghetti against the wall and hoping it sticks.  Restaurant reports help you evaluate what’s working and what’s not in your restaurant, so that you can make informed decisions and take strategic action going forward.

Analyze overall restaurant sales, compare food and liquor menu sales, and dive into each menu item’s analytics in your point of sale system every day, week, or month to compare it against the benchmark and to see which of the above strategies are working and which are not. Once you have identified areas for improvement, you’re well on your way to making impactful changes.

Want to compare your full service restaurant against the benchmark? Click here for a complete copy of the Full Service Restaurant Industry Report

Chris Comparato

Chris Comparato is CEO of Toast. He has an extensive background in leading high growth SaaS, software, and consulting companies with a focus on customer success and building strong teams. Prior to Toast, he led all customer success functions at Acquia (named Inc. 500 No. 1 fastest growing company) and Endeca (acquired by Oracle in 2011). He previously held roles at consulting firms Keane and Cambridge Technology Partners, where his track record of delivering innovative business technology to diverse industries started. He holds a BS in Mechanical Engineering from Union College.


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