The Perfect Recipe: How Data Increase Your Restaurant’s Profits
It’s a tough world out there for a restaurateur, budding or established. Patrons are spending a smaller percentage of their income on eating out, energy costs are skyrocketing, and competition is huge.
But the industry has always been tough. You might’ve even heard the percentages for restaurant failure: Cornell University has found that 27% of startups fail. Even scarier, after three years 50% of restaurants were no longer in business, and after five years 60% go south. Ouch.
Stop right there – it’s not all doom and gloom.
Though failure is daunting, it’s not inevitable. Let’s find out how to avoid it with a secret ingredient – data.
Restaurant owners can’t rely on gut feeling in a digital world. Businesses which power their great ideas with data will be the ones that thrive within this new landscape. But how?
Thanks to digitalisation, restaurants are shaping how they work, and how they utilise their data. From tracking customer traffic and delivery patterns to understanding menu performance, data is a powerful tool for growing your restaurant. With data, you can get valuable insights into customer preferences and habits that can help inform decisions, improving your restaurant’s operations and profitability.
With the right data insights, you can take advantage of opportunities that improve your business operations and bottom line.
How data is growing your competitors’ restaurants
Restaurant analytics are the foundations of a digital-focused business. But what is it? Well, it’s the process of analysing every data point related to the company and converting them into meaningful insights. But without data, it’s a non-starter.
Your business will constantly create buckets of data. You’ve got a gold mine at your fingertips.
Luckily, the growth of digitalisation has brought many systems that lend a hand. From advanced tools like reservation systems, which gather customer profiles, to performance analytics and customer breakdowns, data is key.
Let’s have a look at some businesses doing it right.
Marketing and Data: Birthday Offers and Personalisation
Personalisation is everything. Customers expect a business to know everything about them, before and after visiting the restaurant. This is the perfect opportunity to harness data to provide a great experience.
Remember, it costs five times more to attract a new customer than to keep an old one. So it’s important to make sure loyal customers and rewarded and valued by paying attention to landmarks in their lives and encouraging them to experience these events in your establishment. So, this is where birthday offers come in.
7 out of 10 people dine out on their birthday. Without a birthday offer, you’re missing this audience. Guests will disclose their birthdate when registering, and this promotion can be customised to their preferences.
Strong digital marketing can do wonders for your business, especially when you can track the gains and losses of your campaigns and customer preferences.
“Response rate is extraordinarily high,” says Dyson Barnett, CEO and Founder of FanConnect.
“We’re finding 15-30% responses. So you’re missing out on a huge opportunity”
Profit Margin and Data: Menu Adaptation
Your menu is key. Although sometimes it can be a guessing game. Do you go fully experimental, or stick to ol’ reliables?
With data, there’s less speculation. Instead of relying on instinct, you can read sales reports to identify popular dishes instantly.
Plus, analysing the costs and profit margins is important. With the stored data, you can see if a popular dish is worth making. Then, you can go a step further, determining what makes the dish popular, and if you can replace ingredients with less expensive alternatives.
With 35% of hospitality businesses planning to simplify menus due to staff shortages, data is vital in providing informed decisions for the best course of action.
Customer Experience and Data: Ambiance Changes
The ambience of a restaurant is hard to get spot-on. From changing the lighting for the evening, or choosing the music, it’s hard to impress demanding customers.
So, tech companies like Startle have been using atmosphere monitoring tools to record the busyness of a venue, and even the weather, to allow businesses to set automatic adjustments to music and lighting.
In fact, Startle has found turning down the lighting and slow music creates a wind-down feel for evening dining and has increased dwell time. This means people spend more time in the restaurant, more time ordering, and spending increases. Plus, a better and more relaxed experience can see happy customers returning.
Startle also provides digital signage that changes based on weather or footfall.
It’s time to dine out on data
So, there you have it. Data is the past, present, and future of restaurant success. However, it’s important to remember that data is only as good as the person who interprets it. Having accurate and up-to-date information is vital, along with the right tools to make the most out of analysing. So make sure you’re regularly collecting and analysing data to get the most out of it.
It’s a scary world out there, but with a little help from data, your great idea will be given the best support and structure it can get.