How do you grow your restaurant business without growing your real estate footprint? Read on to find out.
Boost Your Restaurant Revenue without Opening a New Location
If your restaurant business is growing fast, you might think that your next step for revenue growth is to expand to a new location. This isn’t always the best course of action, though, as it’s a major time and cost investment that could be especially risky right now, due to the lingering effects of the pandemic in Metro Manila.
Instead, many Manila-based restaurateurs may feel it’s safer to make do with what you already have and increase your existing restaurant’s revenue, given the current economic climate.
And they’re not wrong.
Maximizing your income at your current location can save you a lot of money, not to mention improve your bottom line overall—putting you in a better position to invest in expansion down the road.
Plus, the strategies you develop at one location can help you improve profits at any future locations you set up!
So here are 5 ways to boost your restaurant’s revenues, without needing to buy or rent more expensive real estate.
1. Focus on customer retention
One of the best ways to increase restaurant revenue is to secure repeat business.
In fact, an oft-cited study by Bain & Company indicates that you can increase your restaurant’s profits by 25-95% if you increase customer retention just by 5%. That’s how valuable loyal customers can be.
So, how do you keep them coming back for more?
One tried-and-tested customer retention trick is to design a loyalty program for your customers. This could be a membership program that rewards frequent diners with discounts and gift cards, or a stamp card that your guests fill up each time they visit, with the promise of a free meal once they’ve collected all the necessary steps.
You’ll recognize this trick being used at some of the world’s most successful F&B brands, like Starbucks. They use loyalty programs because they work really well. The company says that its Starbucks Reward Loyalty Program is responsible for 40% of the revenue they generate.
So you can significantly increase your sales by offering incentives for repeat visitors, and it doesn’t even have to be with a membership card.
For example, you can have your staff ask first-time diners to register on your website, and offer a discount or free small menu item whenever they return for their second visit.
Pro Tip: By asking them to sign up online, you can collect their email address and other information, like their date of birth. Then, you can place them on a VIP mailing list that updates them on upcoming exclusive events or promos, and even sends them a voucher to use on their birthday (like Vikings does).
2. Offer delivery services
It’s easier than ever to offer restaurant delivery, thanks to all the on-demand delivery apps in the market, and it’s never been a better way of generating more revenue. In 2021, more than 70% of all restaurant revenues in Manila have been generated from takeout and delivery.
By listing your restaurant on FoodPanda, GrabFood, and other delivery services, you can reach customers who are much farther away than your usual target market. This also allows you to capture customers who may be wary of dining in during the pandemic.
As long as your kitchen has the capacity for the additional orders, delivery services can increase your revenue and reach without having to renovate or expand to a new location.
If you hire your own drivers and advertise directly on Facebook or Instagram, you can also offer your own in-house delivery service. This requires more work than the plug-and-play method of partnering with Grab or FoodPanda, but you won’t have to pay third-party commissions on your delivery orders.
The best part? People might actually spend more when ordering for delivery, too.
One study found that 25% of customers spend more on off-premises orders than they do when dining in at a restaurant. Considering you don’t have to pay staff and overhead costs for delivery orders, this means higher margins all around!
3. Host events and workshops
If you track sales data for your restaurant, you can easily identify days or times when table occupancy is relatively low.
You can bolster sales at these times by hosting regular events, such as open mics or happy hours—attracting diners when there would normally be a bit of a lull for your staff.
Experiences are also great attractors for customers.
For example, you can hold workshops and classes featuring your restaurant’s cuisine or offer special wine tasting events. Not only do these events generate revenue on their own, but they also increase awareness of your restaurant.
Pro Tip: If you get popular chefs or food influencers to partner with you for your events, you can take advantage of their social media reach to generate even more buzz around your business. Offer to give them a percentage of the ticket sales, and many will be happy to get on board.
4. Invest in menu engineering
Menus shouldn’t just be created once and left the same forever. The most effective menus are dynamic and change in response to trends and the popularity and/or profitability of each dish.
With menu engineering, you can design menus that highlight your best offerings and create a great first impression for your customers. They can also be used to upsell meal upgrades or side dishes to customers.
You can automate a large part of the menu engineering process by implementing a restaurant management and analytics platform like Mosaic, which uses information about your sales, costs, and ordering process to optimize your menu for you.
For example, you can use data to quickly identify which menu items are the best and worst sellers, as well as which have the highest and lowest profit margins. This lets you highlight the winning menu items that generate higher profits, while finding ways to improve the less profitable items on your menu.
This both increases your margins and profits, but also helps you reduce costs and food waste—all while making sure your best items shine when customers look at your menu, encouraging them to buy more of them.
5. Improve table turnover rate
When your tables are full, a simple rule governs your ability to generate revenue: table turnover rates are king.
The faster you seat your customers, take their orders, serve them, and bill them out, the faster you can get more diners in.
Now, this doesn’t mean that you should limit how long diners are allowed to stay at their tables—this is never good for the customer experience! However, you can still improve table turnover rate by reducing your customers’ waiting time at any step of the dine-in process.
For example, you can add tableside ordering with a cloud-based POS system like Mosaic, making it easier and faster for customers to order, and for your kitchen to receive and process their orders.
This also lets you save on labor costs by having fewer servers on the floor, further increasing restaurant margins. During the pandemic, this is also a great way of helping to keep your staff and customers, by limiting their exposure to other people while in your restaurant.
Improving restaurant management—no extra square meters necessary
You don’t need to expand the size of your restaurant or open new locations to generate more revenue for your restaurant. All you need to do is explore new ways to increase profits and reduce costs, and using data is key for doing this successfully.
Fortunately, turning your restaurant data into revenue-building insights is easier now than ever before.
By using integrated restaurant management tools like Mosaic Solutions in your restaurant, you’ll be able to gather and interpret data with the click of a button. We combine a POS system, inventory management system, and purchasing system with our advanced restaurant analytics platform to give you a bird’s-eye view into every aspect of your business.
Our team can even help you determine the best solutions for increasing revenues, and help you track whether or not you’re meeting growth targets.
If you want to know more about how you can increase your revenue with Mosaic, we’d love to hear from you.
Contact us now for a quotation.