Restaurants can succeed by balancing profitability and occupancy.
DISCLAIMER – This content is intended for informational purposes only. It is not intended to be legal, accounting, tax or HR advice. It is your responsibility to ensure compliance with all laws and regulations. For advice specific to your situation, you should consult your attorney or another relevant advisor.
New challenges are continuing to impact the restaurant industry after a turbulent two-year period for operators.
Operators must contend with a dense tech ecosystem that includes apps, tools and services competing for their attention.
In an already Seated allows restaurants to manage their daily occupancy.
Restaurant operators now need to consider the new key metric of occupancy
Once you realize that you have complete control over increasing the restaurant’s occupancy, and maximising your current occupancy, this simple metric will become more important.
Your main asset is your tables. It is important to turn as many tables and serve as many guests as possible because of the high cost of opening your restaurant every day.
It can make a huge difference to increase occupancy by filling just one more empty seat each night.
Restaurant Marketing Plan
This interactive calendar and customizable marketing playbook template will help you create a marketing plan that will drive repeat business.
Seated operators can fill empty seats every day.
How can you get more from each seat and less butts?
How to maximize your restaurant’s occupancy
For decades, the restaurant industry relied on the same marketing strategies. Many of these strategies are neither practical nor efficient for most operators.
- Paid Ads: Hard to track and requires substantial financial investment
- Email marketing It is time-intensive and requires a large number of subscribers
- Happy Hours: focuses on slow times, but doesn’t target new customers.
How can you get more people to your doors if you don’t have dedicated marketing staff with large budget?
Restaurant owners can use modern strategies to increase their seats in slower times.
1. Use an Occupancy Management tool like Seated
Seated is an Occupancy Management tool that allows operators to target empty tables and fill them with no operational changes, staff training or new technology.
These tools allow restaurant owners to quickly identify slow times and market empty tables to diners in the area.
To see the potential profits you are missing by not filling up your tables with food, use a tool such as the Restaurant Occupancy calculator. Then fill those empty tables with food and grow your profits using a tool such as Seated.
2. Remarketing: Capture guest data
It’s much easier to get someone back to dine with your restaurant than to gain a new customer. Therefore, it is crucial that you capture basic information such as email address and name for each guest who comes through your doors.
One of the most important developments in restaurant marketing is to know your customers and be able to market dynamically to them after they have left.
- QR codes can be used for contactless ordering and menus. Guests can order from your menu and place orders. They can also opt in to receive marketing emails.
- To collect emails from customers who did not opt in, use QR codes to pay at the end of your meal to collect more email addresses
- You should ensure that your online ordering and reservations systems allow you to opt in for email notifications
- To manage all guest email addresses in one place, you can use a simple CRM such as Toast.
3. Invest in a loyalty platform to market creatively
After you have started gathering guest data, use a simple marketing tool such as Toast Loyalty for automated email marketing campaigns that engage and reward customers.
- To encourage people to book on slower days, schedule automated emails each week.
- Targeted emails with incentives for online customers to dine-in at your restaurant will encourage them to do so.
- Offer special deals (e.g., discounts, free menu items). Existing customers who return to dine with you on slower days will be eligible for special offers
4. Incentives to increase occupancy in slower times
Inflation is making it harder for consumers to eat out, so it is important to offer them an incentive to go out on those days.
- For guests who are visiting on slow days, focus on time-specific deals like free drinks and special menus. These should be promoted heavily via social media and email.
- Offer limited-time menus that can only be available on slower days (Toast Menus allows you to easily create time-specific menus. This could include anything from a vegetarian-focused menu to a high-margin prix fixede menu
- Hosting special events that are entertaining enough to get people outside their homes on weekdays (live music, etc.
Revenue can be increased by using simple tools such as Toast and Seated to fill empty seats.
Here’s how you can maximize the value of each seat once you have filled all your tables.
How to optimize your restaurant’s occupancy
Two ways restaurant operators can maximize the value of each guest are available to them:
1. Each occupant earns more revenue
2. Reduce the cost of serving each occupant
You can increase your revenue by raising the menu price, increasing the average item per ticket and serving more customers.
Lowering your food and labor costs is the first step to reducing your costs. These are your prime costs, which are highly variable and easily controllable costs.
Let’s dive deeper into the strategies and systems that can be used to increase revenue and lower costs in restaurants.
Revenue boosting guest-driven experiences
Smartphones are everywhere. Restaurant workers aren’t…
This is why it would be a good idea for restaurant owners to:
1. Some staffing challenges can be overcome
2. Increase sales by giving guests more control over their dining experience and giving them more control.
It sounds too good to be true, until you get into Toast’s NEW STEPS of SERVICE. The New Steps of Service are simple in concept. Old steps of service don’t cut it.
It’s not necessary to make a server-centric experience too burdensome. A server must be physically present at every table, and each order or tab that is placed or tabs paid.
It’s archaic. It is difficult to staff. It may also be difficult to maximize revenue from each occupant.
The New Steps of Services allows guests to control their dining experience via:
- QR codes to mobile ordering and payment
- Kiosks available for self-service customizations and ordering (modifier upsells)
- The power of a terminal in your pocket! Handhelds allow you to send orders, complete payments and take them wherever you are.
The New Steps of Service from a hospitality perspective can increase guest interaction.
Instead of trying to remember the orders, they are chatting about the specials and menu. Because they are on the ground, they can touch each table as many times as necessary without having to hustle back and forth to a computer terminal.
The guest can choose to pace their order, order more drinks, or close the door immediately. They have access to the entire menu, as well as the add-ons and modifiers that allow them to personalize their order and raise the bill.
Our new video course teaches you how to take a deeper dive into Toast’s New Steps of Service. Our New steps of Service ROI Calculator will help you quantify the potential impact on your labor costs as well as operational efficiency.
Increase margins by implementing consistent, data-driven cost control
Profits can be boosted by increasing overall revenue. But that’s only half the story. Nina Quincy is the director of operations at Underbelly Hospitality.
“Revenue buys forgiveness. A $6 million restaurant is a lot of forgiveness. But if you’re now $1.8 million, all your flaws will be glaring em>
Cost control is another lever that you have to increase your profits. We are primarily concerned with restaurant prime costs or food and labor cost. Here are some ways to control food costs.
Make sure you are precise and intentional about what’s on your plate
How do you determine the price of your menu items? What menu items drive the most profit?
Restaurant operators can zoom in on the cost and profit margins of individual menu items using Plate Cost Calculations . The plate costs are often the result of multiple recipe costing exercise, which provides a breakdown of each item on the plate. This makes it easier for restaurant operators to reach profit targets by balancing ingredients and portion.
Make the tough decisions to optimize your menu
Restaurant operators may face some difficult decisions as they continue to navigate the ongoing food inflation.
Underbelly Hotel was a huge success with their wings. They offer traditional buffalo wings as well as PB&J, tiger and nuoc cham chicken wings. Famous!
The wings became unsustainable due to rising food prices. Nina Quincy and UBH saw chicken prices fluctuate between 30-40 percent. The UBH team decided to remove the wings from the menu, rather than sacrificing wing size or quality.
We initially increased the price to $20 per dozen. The prices rose again and for a dozen we were charging upwards of $20.
Although it is possible to drill down into individual ingredient prices, this can be a time-consuming process that must be done manually and costly to outsource to bookkeepers. Restaurant invoice automation will cut down on manual data entry and reduce processing costs.
Invoice automation is an automated tool that digitizes important invoice line-item information . Restaurants can easily scan, snap, upload ingredient pricing data to enable actionable analysis via COGS, price fluctuations and ongoing restaurant costs breakdowns.
There are other similar actions and technologies that you can use to control labor costs:
Schedule more efficiently
It doesn’t necessarily mean that you will receive better service if there are more employees.
Complacency can be caused by too many team members and too little work. This is dangerous for everyone: staff, their tips and employee engagement all go. Customers also lose great experiences and the labor costs are rising.
Use granular reporting in your payroll software
A simple-to-use payroll software and team management program gives you visibility and transparency into fluctuations in weekly labor costs, tip pooling breakdowns and payroll taxes.
Your managers and you don’t have the time or patience to manually calculate payrolls. You also don’t know how to add it all up to figure your labor costs. This is an essential step to reducing your labor costs.