Customer IntelligenceData IntelligenceEmerging Concepts

Using Data to Increase Your Restaurant’s Profits

You can’t go online these days without reading about the importance of data. Today, it defines successful businesses, including restaurants. The problem is that, as more and more data is created, it gets harder and harder to extract meaningful insights for us mere mortals. It can, however, be done.

So, in honor of all those important numbers, let’s explore how restaurants utilize this life support in 2022.

Data Analytics

For those of you who have been in the restaurant industry for some time, you remember when we collected data using surveys and feedback forms. Today, everything we and our customers do generates data. This includes browsing the internet, placing an online order, and making everyday purchases. They all collect data about how we eat, where we travel, and our preferences. 

Marketers spend mega dollars using this data to monitor our behavior, analyze our spending patterns, establish the right message and send it at the right time. And so can you. In addition to increasing your bottom line, you can improve that all-important metric—customer service. 

Instead of analyzing numbers, such as sales and profits, over a set period, data analytics lets you understand the “whys” behind the changing landscape. For example, if you want to know why a server is outperforming others or why you get more orders for your signature dish on Thursdays, your restaurant data can inform you. 

Deriving Data

Data comes from your reservation system, POS system, restaurant apps and websites, customer relationship management (CRM) platform, and more. The latter consolidates data across loyalty programs, delivery, and Wi-Fi, giving you a unified guest view.

Essentially, it tells you who’s ordering, what and where they order, when they order, their average check size, frequency, and their last order. That’s a lot of information. It highlights your VIP guests, the ones that come back once or more each week, and demonstrates what they order and what time of day they arrive. This gives you powerful information for direct marketing that’s actually useful to your guests. 

Recall the local grocery store ads that you get in your mail every week? This is not that. It’s hyper-directed, rather than annoying, and entices, rather than irritates, your customers.    

As customer profiles are created from this data, you get a rich overview of your guests. You can then use this data to create customized loyalty programs and send relevant offers via email or text messages. 

Reducing Labor Costs

Labor is the number one hot spot in today’s market, making the right labor analytics solution critical. Using data, you can identify slower periods, the actual number of staff required at any given time, and scheduling based on sales. You can tell which servers fare better on which days and times and optimize labor costs based on historical data for different periods. 

Engineer Your Menu

You can also use data to help your team make vital menu decisions. For example, data analytics can inform you which dishes should be masterfully aligned in the golden triangle and which ones are ready to be repurposed. Do some menu items get a lot of orders but few reorders? 

If so, it’s time to investigate. Using data analytics and customer feedback, you can determine if it’s due to pricing, taste, value, or presentation. Then, create solutions that will significantly impact your bottom line. 

Instilling Loyalty

A restaurant’s loyalty program provides rich customer data. You know their order preferences and whether they like to dine inside or on the patio. If customers frequently mention you on social media, you know this is a good place to send them a reward. 

This can attract new customers who become aware that you recognize loyalty and reward it. Recognize your VIP guests and send them exclusive offers to show your appreciation. Whether you’re forecasting trends, minimizing waste, or improving the guest experience, data can lead the way. 


How do restaurants collect and use data? 

Restaurants collect data across the supply chain, from purchase orders to inventory and sales. They assemble customer data, including demographics, frequency of visits, and behavioral data, such as their purchase history. 

They then build customer profiles that inform their marketing, engagement, menu items, and customer service. It’s used for employee scheduling based on historical data and individual sales and considers employee commute times and quality of life. It can also affect menu design and offerings, as well as expansion plans and new locations. 

Can the restaurant industry improve its data analytics?

There are numerous systems in the industry that collect and store data. The problem lies in integrating and consolidating this massive amount of data. The better data flow would result in real-time insight for restaurant operators that are currently underused. For example, social media data can identify food quality issues, training gaps, and dynamic menu pricing. 

Hospitality Tech spoke with Courtney Maxedon, VP of Interactive Marketing at Kahala Brands. She shared that collecting more data that leads to better marketing and personalization can increase repeat customers by more than 40%. That figure should certainly get you excited about data’s potential. 

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