Predictive and big data analytics are extremely hot these days, since the belief that the data is the new oil is taking over business managers from all sectors and industries. Data analytics for restaurants is also available even though the revenue of a particular restaurant location is not that big. But there are opportunities which make the difference between good and best.
At A4E we are relentless in saying that data analytics is full of hidden gems waiting to be turned into jewels. Historical sales data of any business, including restaurants is full of patterns, correlations, hence insights on key elements of customer behavior which in the end of the day determines the overall success.
Menu & pricing optimization
A restaurant manager might think that the menu list is good as possible but the Boston matrix, tweaked for restaurant needs in the form of a Menu engineering might give you another point of view. It is pretty simple math modeling displaying visually in a table with just 4 cells of which menu entries are Stars or great performers in terms of quantity of orders and profitability, and which one are Dogs or slow performers with low profitability and demand. As usual, the interesting is in between.
Plough horses are slow movers but they bring you a good profit. Restaurant manager should consider how to emphasize their offerings in order to bump the horses closer to the Stars performance. This clusterization features one more category, titled the Puzzle. Puzzles are this product group with high demand and low profits.
Restaurant chefs and managers might do some fine tuning within the menu offerings in order to push the horses close to stars, to eliminate some dogs if possible and to ask their selves how to raise the profitability of the puzzles products.
Sales forecasting is vital for any business which is selling fresh products or such with limited shelf life. Modern data analytics is already capable of delivering accurate insights on this specific business problem. Based on historical sales data, combined with data points as location, foot traffic, weather, holidays & vacations, seasonality, etc., a data analytics solution can predict the sales of tomorrow, the day after or for the next week or even month.
This is helpful for so many reasons but we are going to highlight the improved planning, staff optimization, inventory and stock management, wastage reduction, just name it.
Try out our Restaurants Sales Forecasting software customized for restaurants` needs.
Great performers are great for a reason. Keep a close eye on them, identify how exactly they unleash their potential, nurture the not so good performers and address the issues within the staff members on the bottom of the chart.
Any restaurant has two main group of staff members – waiters or front office and chefs or back office. To evaluate their performance for sure you need proper KPI to watch for. The waiters` performance might be modeled via the overall revenue of their shift, as well as the tips they earn. If a waiter is good at generating tips but not so good in overall table revenue this might mean that he/she is loved for the service but isn’t good at up selling and cross selling. The opposite means that the waiter is professional but is missing some points in terms of customer satisfaction. It is important to rank staff members equally in terms of work hours, which of them are heavy loaded with customers and which not because this is a spot where data noise might come around.
It costs 5 to 9 times more to obtain a new customer than to keep an existing one. This is a basic business rule, just like the fact that a potential customer is twice likely to use product or service by a brand recommended from someone in its social networks connections. That’s why customer engagement programs are crucial for any business and the restaurants are no exemption.
How can data analytics be useful in terms of customer engagement? By unbiased evaluation of customer engagement initiatives like discount codes & vouchers usage, social media activations (created most commonly with user generated content, known as UGC), customer satisfaction surveys, etc.
You can find some interesting insights on boosting a restaurant` profitability in some of our previous blog posts.
Data analytics in restaurants is capable of accurate sales forecasting, to spot existing correlations and paves the way to new insights on the business. Anyone who works with data should not miss the opportunity to visualize the existing data.
Dashboards usage is the step closer to insights. The human brain is processing a large amount of numerical information way easier by using charts and graphs. By using data visualization it is easier to identify areas that need attention or improvement as well as to clarify which factors influence customer behavior. Dashboards are a great way to catch a trend with a naked eye and make relationships and patterns between operational and business activities way easier.
Data visualization is supported by generic MS Office product as Excel but there are great tools like Tableau, Google Charts and Visual.ly to name a few.