There has always been 3 ways to increase sales: more visitors, more often and in a higher spend.
As a former restaurant operator (now data hound) it’s only become more evident that frequency is king over the other two. And in actuality, among the other two could actually be negatively impacting future visits.
For the most part, frequency equals loyalty when it is a byproduct of service and food quality. Greater spend on a single trip… not so much! You might actually be pushing somebody outside their comfort zone. Focusing on individual transaction revenue and profit versus yearly margin dollars per individual can easily lead to less frequency when a guest has limited discretionary funds for meals. They’ll tap out.
On the flip side, greater frequency typically steals business from your competitors since they’re replacing that trip with yours. Without constant growth in frequency, you must advertise and that extra spend typically erodes gain since the offer lures guests in using a reduction. It is the worst of all worlds. Not only are you ignoring to maintain frequency, you’re making new guest acquisition using a value-oriented offer. Data shows when a first-time guest reacts to a discount that the brand frequently struggles to fully convert them into full price… ever! But a guest that comes in at the direction of a buddy is fine with complete price because it’s been suggested that the brand is well worth it. To take it a step further, most people who are happy with their restaurant selection do not use coupons, even if available — they do not want them or want them.
Hard to argue that earnings thru increased guest frequency is the way to grow responsibly. It creates word of mouth promotion (no cost) hence new guest development. Your yearly earnings and margin dollars from that client are optimized because frequency equals loyalty, while also reducing visits to your competitor. It is like double glazing, but in a fantastic way. The moment your value becomes minimalized or treated as a commodity your problems can start. Take food and labour for example. These are the two core cost categories that determine frequency more so than any other. Yet they’re often the easiest to target because a variable cost, adjusting percentage, fixing choice or hours scheduled could be changed with the wave of a pen. Instead of being cost categories, consider these as revenue strategies. You will make better choices. Years ago, our very best franchise operators had one simple rule; timetable for the sales you want, not for the sales you are at. It does not have to be complex. Often the exact same restaurants which are slicing schedules down to the minute are the exact same ones which require service help the most.
Another way to check out frequency — you are working off a number which has a maximum achievable aim. For instance — if someone eats 3 times a day their from home meal count is 21 times each week. Your job is simple — assert more of these visits than your competition. I promise that increasing price to heal bottom line woes only magnifies the matter. You can’t sustain having the identical guest always spend more money. It just does not compute. They’ll reach their breaking point and stop the brand or best case, just come less frequently leading to the brand purposely trading raised ticket sum for less frequency. Coming soon to a theater near you, “The Hamster on the Wheel.”
How can you protect frequency? It’s on your restaurant POS software data on a per trade area basis. Which items drive affinity to brand? What basket combination drives frequency? Is there a smarter way to position menu items based on commerce place palate tastes? Sure! Why push what is popular nationally if it is not a trade area favorite. End of day… there is no more honest manner a guest could speak with you about your brand than the way they purchase your food. The answers are on your data. The way you speak to those millions of data points is your new language.