It is a no-brainer that the main answer to earning more in running a restaurant business is by optimising costs – we have talked about how to generate more profit through managing food wastage and automating your processes, but what’s next? Here are some smart ways you can consider doing to earn even more.
- Offer Loyalty Programmes
Existing customers are a huge asset to all types of businesses. Depending on the industry, the average cost of acquiring a new customer is five to 25 times as expensive as retaining an existing one, according to this Harvard Business Review study. On top of that, a 5% increase in returning customers can also increase profits up to 95%.
The loyalty programme tactic is not new in the F&B industry; restaurants have been doing the traditional stamp card system where customers get one stamp on their card with each visit or a certain amount of purchase since the early 1900s. Nowadays, it’s even easier to offer such benefits since most POS systems are equipped with digital membership or loyalty discount features by keeping the record in the customer’s phone number or email address. Offering incentives for your patrons can keep them coming back more often, increase their average spending and get them to recommend your restaurants.
- Rent Out Your Venue for Private Events
Does your restaurant have ample space that allows private events or gatherings? It does not have to be grand; tidiness, modest interior design and decorations, along with some simple table rearrangements can go a long way. If your concept is a laid-back diner, it is still perfect for those looking to hold casual events.
Calculate your average revenue and profit during regular business hours to estimate the minimum charge for renting as you will be closing your establishment to the public. Don’t forget to factor in the service fee for the preparation, cleaning or equipment rentals.
- Be Strategic With Your Promotions
As a business owner, giving out promos might sound like a way to burn your budget instead of making profits. The truth is, promotions can be profitable as they create buzz, help to get your name out there to new customers and encourage people who have known your brand but have not visited to walk in.
Happy hour promotions are usually effective to get people to come and spend. The trick is to choose the right business hours and offer promotions only on certain food or drink items. Most promotions are designed to maximise the number of goods sold rather than the profit margin. However, do keep in mind that you still want to earn, so make sure you have picked the right items to discount and use the chance to upsell or offer other items to complete their dining experience.
- Pay Attention to Online Reviews and Your Online Presence
Online reviews and presence play a huge role in customers’ decision-making process, up to 90% of diners check out the restaurants online through their website, Google My Business (GMB) page or social media before deciding whether to visit.
First of all, ensure all your information, especially essential ones such as business hours, address and phone numbers, are up-to-date because your Google My Business page is the first thing people see when they search for your name on Google. Attractive pictures of your menu can persuade people to try them out, so upload them to your GMB and be active on social media to promote.
The next step is to encourage your customers to leave their reviews online. Many articles you see online would recommend incentivising customers such as offering discounts or freebies in exchange for a review on the restaurant’s Google page, but do you know that such “bribery” is against Google’s policy as it is considered fake engagement?
To do it the organic way, talk to your customers and explain that reviews are important for your business. Reading reviews is also an effective way to learn your strengths and find areas to improve on.
Offering promotions or new products and services can sound like a lot of work and you might not find the perfect formula the first time, but that’s how businesses grow, through trials and errors. Some of the tricks we mentioned involve little to no risk, particularly being active online and designing loyalty programmes, so you can start there. Take your time to research and plan carefully and just give it a try!
If you are still looking for ways to effectively manage your costs and procurement, our restaurant procurement software, Food Market Hub is the perfect solution. Talk to us to find out more about our features and pricing.