As digitization reshapes the functional and operational outlook of the restaurant industry, major independents and franchisees alike are clinging to data in the hope that it'll help them succeed in this modern business landscape.
There's just one problem: few stakeholders know how to extract meaningful insights from it.
For example, a modern POS system will present restaurant owners with metrics like the number of times an extra ingredient was requested. But if all you do after looking at this data is increase or decrease the stock you have for that ingredient, you could be missing out on a big chunk of the restaurant's profitability.
That's where all the data analytics can be a blessing in disguise.
Related content: 3 Benefits of POS Integration for Restaurants
With the competition for restaurant guests getting fiercer, analyzing the metrics and reports associated with your operations becomes integral to your role as the owner or manager.
With new technologies like POS integration, and more tech companies in the space making APIs available, restaurant data is becoming useful for restauranteurs. What if you could use the frequency of special requests to engineering your menu, or if you could know why a certain day of the week attracts fewer customers?
With the right use of restaurant data analytics, you can.
Data and analytics are valuable for increasing revenue and improving operations.
Collect and analyze data from various sources, such as POS systems and customer feedback.
Utilize data to tailor marketing, optimize pricing and menu offerings, and make informed operational changes.
Implement tools and train staff on data literacy.
Maintain data security and privacy.
Regularly review and update data and analytics strategies for continuous improvement.
For more details, refer to the blog below.
Let's take a closer look at what data analytics are, how they affect the various aspects of a restaurant, and how you can use them to increase your revenue, plus make better business decisions.
See how we help restaurants make better front-of-house decisions based on data
What is restaurant data analytics?
Put simply, restaurant data analytics is the process of analyzing every data point related to your business and converting them into meaningful insights, which can help improve everything from menus and staff training to restaurant policies and marketing campaigns.
Unlike restaurant reporting, which involves looking at a compiled list of core metrics to compare sales and profits between specific periods, restaurant analytics allows you to do a deep dive into the numbers to better understand why your business is performing in a certain way.
So, if you want to know why a certain member of the staff is performing better than others, or why you get more orders for seafood entrees on Tuesdays, let your restaurant analytics take the lead.
How restaurants can gather guest data
As mentioned earlier, restaurants are constantly creating bucket loads of data, which, if used correctly, can prove to be a gold mine for a restaurant's success. The question that then comes is - what tools can restaurants use to gather this big data and organize it properly so that it can be analyzed and used for business decisions?
The growth of digitalization has led to an influx of systems that support restaurants with this very task. Of course, you can still stick to the pen & paper technique to keep a record of your guest data, but that will only get you so far. Advanced online tools like reservation systems help restaurants easily & efficiently gather detailed guest data including personal details, preferences, allergies, and more, along with various restaurant performance analytics and customer breakdowns that provide a comprehensive and holistic image of the restaurants' overall performance and enable data-backed decision making.
POS systems are also another great source of data for restaurants. Keep track of average ticket size per customer, most popular dishes, and more through the data available through the POS to make better menu and pricing decisions. A few reservation systems also allow a cross-integration with your POS, giving you access to advanced data all in one place.
In addition to POS integration, some advanced reservation systems like Eat App also include a built-in automation system that triggers automated tasks to run on auto-pilot based on a personalized set of criteria, like auto-tagging customers based on the number of visits, amount of spending, etc. Restaurant automation opens a treasure trove of data collection opportunities for restaurants that would not be possible earlier and helps them gain access to a richer, more accurate guest database and impactful information about restaurant performance that would be lost otherwise.
Now, let's take a look at how you can use the all the analytics and data to have a better understanding of your guest's dining experience, help make staffing decisions, review valuable information to help reduce wasted food, inventory management and more.
How to increase restaurant revenue using data analytics
1. Use restaurant analytics to help manage labor costs
Labor is a big expense in operating a restaurant, so it's crucial to be on top of your labor cost vs your total sales. The right analytics solution will help identify slower shifts, which helps with keeping costs low as fewer employees are required during that period.
Insights will also help you schedule quicker and more strategically based on what days you're busiest when your sales are highest, and how much should be your average labor spend.
Moreover, restaurant analytics can be used to optimize labor costs during specific seasons. For example, the owner or manager can analyze historical data for the festive period and use it to optimize the workforce by scheduling the right mix of temporary, part-time, and part-time labor on a range of schedules.
Doing so will help you control your labor costs and ensure your restaurant is running at its peak capacity throughout the year.
2. Use analytics to make effective menu decisions
You can also use restaurant data analytics to determine what items you should keep on the menu, which dishes need to be re-introduced, and what meals should be considered for promotions and discounts. For example, if a specific item gets a lot of orders, but there are no re-orders for it, you can investigate further.
Are customers not re-ordering because the taste is bad? Or did they want to try another entrée altogether? Combine your data analytics with a customer feedback strategy to find out. If the bad taste is the cause, you can try reworking the item or remove it from the menu altogether. With the right insights, you'd be able to achieve the right balance of items across different categories of the menu.
3. Use analytics to the improve the guest experience
When it comes to customer experience, data analytics can reveal critical insights about restaurant guests. Information like order preferences, reservation habits, and demographics can help you to personalize the dining experience. For example, you can offer a free dessert to guests on their anniversary or birthday, or keep cuisine preferences in mind when sending out a personalized offer to guests.
In addition, the analytics give you the ability to identify trends and segment customers into groups. With historical data from your restaurant CRM to show current and past trends and develop customer profiles, listening to and building relationships with your guests will help strategize for the future.
Feedback and review analytics are other interesting data points that can help enhance the guest experience. Tracking cumulative review data on a daily basis and making changes accordingly can help in ensuring that customer service always remains up to standards.
4. Use analytics to help fill empty tables
For a restaurant, every empty table represents lost revenue. Analytics can help restaurants understand and overcome the "empty tables" issue through various critical data points.
For example, a restaurant can have a look at their no-show rates, and in case the numbers are very high, they can tackle this issue by setting up a reservation deposit. A deep dive into the data can also help restaurants recognize their off-peak times and run special offers & discounts to fill up the tables.
5. Use analytics to market your venue
Strong digital marketing is one of your most effective weapons for filling seats, and it becomes much more effective when you can track the gains and losses of campaigns or customize them based on customer preferences.
Tracking a campaign within your POS analytics will allow you to compare sales data to determine whether your efforts are bringing in more business or are simply a waste of time. This is true whether the campaign is a weekly Burrito Tuesday special or something more transient like a Mother's Day prix fixe menu. If the latter is the case, you can adjust your plan to one that will be more successful.
Also, keep in mind that marketing efforts don't end when a visitor enters the building. Take advantage of your point of sale or reservation analytics to surprise VIP visitors with a free glass of their preferred wine or a free dessert. Simple acts of kindness, such as remembering someone's name or their favorite meal, also go a long way.
You can also use the valuable guest information you've collected from your power CRM tool, a feature built-in directly within Eat App, to action a few personalized marketing campaigns. Here's a few suggestions:
Birthdays: Guests will happily disclose their birthdate when they register with your reservation system, especially if you're running a "happy birthday promotion." You can also customise your promotion if you know what they like to eat.
Promote special events: An email announcing your forthcoming Argentinian BBQ night will not be of much interest to vegetarian visitors. However, you might think about hosting a vegetarian cuisine event if a sizable portion of your usual clientele is plant-based diners.
Get customers to come back: Once you are aware of your visitors' previous meal preferences, you can target your marketing even more specifically by highlighting the dishes they frequently order. It's a great opportunity to promote additional menu items and give customers a compelling incentive to return to your restaurant.
6. Use analytics to review a server's performance
Utilize the POS statistics and huge amount of table management system data on server performance to identify strong servers, enhance staff training, and create more effective schedules.
Find your shortcomings and strong points. Does one server sell 60% of the bottles of wine? To help them increase their sales, learn their secret and mix them with servers who have low bottle counts.
Reduce your turnover rate. There are several causes of turnover. Although it cannot be stopped, it can be reduced. Find out how you may collaborate with your lowest-performing servers to increase their job happiness by checking in with them.
Place VIPs and elite servers together. You can determine which of your top waiters will be assigned to a VIP guest's table when a reservation for that guest is received.
7. Use restaurant analytics the create a loyalty program
Today's restaurant loyalty programs are equipped with the ability to offer a rich set of customer data. You can look guests up by something as simple as their last name and get all the information you need. Hence, you can skip having to confirm their order preferences and whether they'd like to dine on the patio or eat inside.
Also, you can look at the data to determine the best way to reward your loyal customers. For example, if a certain group of customers checks in and tags your restaurant on social media every time they come in for a meal, it'd make sense to send them a reward through a social platform.
One tactic could be to send them a digital invite to come and try a new entrée at your restaurant, highlighting that it's a small reward for the loyalty they've shown to your business. Consider using Facebook or Instagram for the purpose, as you may be able to attract new eyeballs when customers boast about receiving the reward within their social circle.
Advanced CRM systems can also be used to re-emphasize yourself to your high-value and keep them happy by creating customized segments and sending them exclusive offers and discounts as a reward for their loyalty.
8. Use analytics to minimize food waste
Your restaurant's cloud-based pos system can help you manage the stock that enters and leaves your kitchen, which will increase employee accountability for how each order is prepared, delivered, and accounted for.
Don't let negligent personnel overfill a plate, underserve a loyal patron, or otherwise abuse the anticipated goods in a way that harms your reputation and your business's bottom line. Food is your restaurant's inventory.
9. Use analytics to adjust the size of your staff members
Wouldn't it be good to know which servers are doing the best and which aren't? Yes, we all have a combination of intuition and life experience. However, you should provide data to back up your decisions. Explore more to determine the precise cost of a poor server to your company.
Your restaurant analytics will be able to show you where losses occur and where you might be able to better utilize their manpower if you consistently keep the same amount of kitchen and waitstaff throughout the week but only certain evenings necessitate more servers.
Here's a few examples of how Eat App Analytics can help improve performance:
By assisting operators in automatically collecting extensive customer and reservation data, Eat App's analytics technology makes a significant advancement in the field of restaurant performance monitoring.
With customizable reports that can be divided by time period, shifts, cost, and a number of other parameters, you can always know exactly what's happening at your restaurant. It is the most personalized reporting tool provided by a reservation system.
Eat App's single dashboard reporting system, which is located in the platform, makes it simpler to compare data and share it with your team through exportable graphs and charts.
With your advanced analytics reports, you will be able to view:
See thorough visitor and reservation reports
Daily, weekly, monthly, or yearly breakdown reports
View reports for a certain time period
Reports that are broken down based on reservations or covers
Export CSV reports or graphs for the time period of your choice.
Monitor your daily, weekly, monthly performance
Track important aspects of your restaurant's performance, including customers, reservations and waitlists, POS data, and more, using one-of-a-kind, in-depth reports that make it simple to share data and spot patterns. Utilize reports like these to monitor your performance:
Cover flow: To receive the most detailed view of your daily cover trends, get an hourly breakdown of the number of covers at your restaurant on any particular day.
No-show patterns: Have a plan in place to reduce no-shows? Analyze the impact of no-shows.
Busy times: With this report, you may view aggregated data over a period of time to learn when your restaurant is busiest, including the busiest hour during the day, day of the week, week, month, and year.
Customer retention and next-level insights
If improving repeat business at your restaurant is important to you, so is improving the customer experience.
Eat App's analytics system enables you to segment your customers by critical data points like guest spend, last visit, number of visits, etc. by aiding in the identification of behavioral trends. You can then create personalized marketing campaigns and promotions to target customers in order to increase loyalty, forge strong relationships, and increase customer retention.
To segment your database using various data elements, use our guest reporting tool. You have complete control over everything.
Total Visits: Identify your VIP and loyal clientele by filtering your data based on the total number of visits, and increase retention with customized messaging.
Newest Reservation: By grouping guests according to how many days have passed since their most recent reservation, you can win back and keep any clients who may have been lost.
View Guest Spend: Identify and highlight patterns and clients in various spend categories, such as overall spend or cost per cover. Use this information as the foundation for your customer service standards to give your best visitors the most luxurious experience.
Requested Items: Now that POS integration is available, you can select your guests based on what they ordered and create personalized lists for each cuisine or dish type.
Customer Feedback Reporting: You now have access to aggregated guest feedback reports when you conduct post-dinner guest questionnaires using the Eat App. These reports enable you to track consistently how customers are reacting to the changes you have made by providing you with a daily, weekly, or monthly trend of review scores.
Performance tracking within your group is now simpler and more effective than ever
Performance tracking within your group is now simpler and more effective than ever.
When making strategic decisions about your restaurant chain, understanding how each one is doing both independently and relative to the others is essential. The guest performance reports provided by Eat App give you a comprehensive overview of the overall performance of your restaurants and the ability to review and compare high-level performance across all of your restaurants.
All of our important reports are now accessible throughout your entire group, letting you keep a competitive advantage whether you have two locations or 2,000.
>>> Want to know more? Request a demo today!
With rich sources of data spread across restaurants' systems, data analytics is picking up steam. For the ambitious, revenue-driven restaurateur, investments in the right restaurant technology tools are necessary to extract meaningful insights. Ultimately, restaurant data analytics would push your business in a direction where it grows and thrives.
Restaurant analytics is the practice of examining data specific to your establishment in order to gather insights that may be used to boost performance. Analytics provide information beyond KPIs and financial performance measurements like sales and profits.
5 suggestions for organizing and comprehending your restaurant data
- A thorough POS system should be the first step.
- Observe details on certain customers.
- Keep an eye on front-of-house statistics consistently.
- Analyze inventory and financial data.
- Utilize data to improve management.