You’re probably already well-acquainted with the most popular ways to grow revenue: raising prices, finding new profit centers through menu expansion, new advertising. In this piece, however, we’ll shed light on some of the lesser-known (but equally powerful) methods for boosting your bottom line.
These five creative tips will set you apart from your competitors and get you in the habit of thinking outside the box — an essential survival skill in a world of fast-growing technology.
Analyze Your Numbers
Use big data
Numbers tell a story. To find out what your numbers have to say, invest in the technology that will help you discover what’s going right (or wrong) at your establishment.
Guy Alessandro, CPA, whose restaurant consulting firm has served over 500 restaurants in the New York area over the last 25 years, suggests you
“try a data mining program that gathers data from your POS systems on a granular level, like the NCR Pulse.”
These can track everything from an individual server’s sales by hour to when you’re selling the most of a particular dessert, from anywhere in the world. This technology can pay off doubly by providing valuable insights and saving you time, which you can then use to connect with employees and customers.
Revisit meal (revenue) periods, and hours of operation
Take a hard look at how much business you’re generating when you first open, and when you close — and the effect of both on payroll. Consider changing payroll structure. For example, reduce the number of managers on duty and substitute in a shift supervisor.
Next, consider your guests’ perspectives. Even if the establishment is a ghost town on Monday or Tuesday, that doesn’t mean you should close your doors on those days.
“If you guests expect you to be open and you’re closed, they may stop coming on Wednesday or Thursday, too,” says Alessandro.
Use technology to gain efficiency and productivity
The right technology at the right time can work wonders for your bottom line. A scheduling software program like the one offered by Planday, a tablet tabletop service like Ziosk, or a fuel convertor for used cooking oil like the one provided by Springboard Biodiesel can yield operational and financial benefits for years to come.
Review Your Pricing Strategy
Think in terms of guests
“Raising revenue doesn’t necessarily mean raising prices,” says Alessandro. “You can gain more revenue from existing guests or gain more guests.”
You may only need to identify and appeal to a new target market to start seeing the numbers you’re working toward.
Everyone talks about raising prices, but what about reducing them?
“I had an operator who was doing a certain amount of business at lunch at a certain price point, who lowered the price point by two dollars. Their gross sales increased 30 percent and their gross profit increased almost 25 percent,” says Alessandro.
Raise or reduce average cover
Determine your average cover, and whether you should adjust it or not. Considerations include price points, the skill of your service team, and how you influence what people purchase. Raise average cover through suggestive selling and menu science, or lower average cover in exchange for a higher cover count.
Retain Existing Guests
Provide ongoing service training and employee incentive programs to ensure your people are a true extension of your brand, offering unparalleled service.
“Successful independent restaurants reflect the personality and unique talents of their leaders. Along with operational excellence, this will result in a consistent, superior guest experience and keep them coming back,” says Alessandro.
Pay higher wages
It may seem counterintuitive, but rewarding your employees by paying them better can work wonders for business.
“Higher wages equal better, more productive employees, and a better, more consistent guest experience,” says Alessandro. “This all leads to higher revenue.”
Keep your regulars coming back by giving them VIP treatment. Loyalty programs aren’t just about discounts:
“they’re about connecting with your guests and understanding what they want,” says Alessandro. To use loyalty programs to expand revenue, “Give customers an incentive in November or December to return when business inevitably drops off in January or February.”
Attract New Guests
Use word of mouth to draw new business
“As noted before, operational excellence will result in a consistent, superior guest experience,”
says Alessandro. This leads to greater word-of-mouth advertising, which is still the most effective method in the business. And with online reviews being the “new word-of-mouth,” make sure you’re monitoring and responding to what’s being said about you online.
There will always be merit to traditional marketing and advertising, but the best restaurateurs also know how to leverage the more organic, authentic channels for reaching customers. One of these is connecting with experts that can bring you more, or different, types of business. Concierges, caterers, event planners, and food writers are all examples of partners that can help grow business.
Social media strategy
We all know how to “work” Facebook and Instagram. But as a restaurant operator, you don’t have the time to execute a truly effective social media strategy on your own. Hire a social media marketer to devise a plan. These experts can be very inexpensive, and extremely valuable when it comes to spreading the word about your business and managing your reputation online.
“Ask for referrals,” Alessandro says. “Since there are a lot of people doing this kind of work, you’ll want to ask your trusted colleagues who they respect and who to stay away from.”
People treat gift cards like cash, meaning they’re far less likely to throw them away than a coupon or flyer. Alessandro adds another benefit to providing gift cards to prospective customers: exposure. “Chances are, when they come to redeem their card, they’ll come in with at least one other person.”
Leverage Your Business Assets
More than catering
Plenty of operators think about growing revenue by offering catering, takeout, or delivery — which are popular methods because they work. But there are simpler (and more unique) ways to grow your brand. Try adding live entertainment or music. Open a concession outlet, or “grab and go” outlet, at other venues.
Use your brand, product, and human resources talents to help out in the community in different ways. For instance, if you have an award-winning barista behind your counter, can you allow him or her to teach a class to the community?
Growing your revenue is less about cutting costs and more about getting creative. Don’t simply emulate your competition: forge new paths and be a trendsetter by anticipating your customer’s needs and making your brand stand out.