Wrapping your head around the basics of data analytics isn't as hard as you think. Learn how to develop a data-driven mindset today.
How to Analyze Restaurant Data Like a Pro
Any restaurant, grocery store, hotel, and casino that uses digital technology has data wealth. But like oil, data has zero value if you don’t refine it into something useful.
In the food and beverage (F&B) industry, there are at least 10 use cases for data analytics. Spotting inefficiencies, strengthening the food value chain, forecasting sales, and learning about consumer sentiment are just some of them.
However, advanced data analytics can be intimidating to the uninitiated. Many smaller F&B operations ignore it, believing that this practice is something only beneficial to larger enterprises.
This belief couldn’t be more wrong. Regardless of the size of your business, data analytics is worth doing. And it’s not as hard as you think.
To adopt a data-driven mindset properly, use the expert tips below.
One of the first things many F&B business managers want to know when leveraging data wealth is their popular product categories.
After all, knowing and understanding your best sellers is key to formulating strategies that generate a steady stream of revenues and grow your net profit.
That’s why it’s advisable to invest in a sophisticated inventory solution. It can help you see the movement of your orders more clearly and ensure that your best-selling items are always available.
However, avoid committing the mistake of assuming that your inventory can tell you everything you need to know. Just because you need to replenish certain supplies frequently doesn’t necessarily mean that there’s high demand for them. Maybe they were sold, maybe they spoiled before used or maybe the portion sizes in your recipes aren’t correct or followed properly.
The best source of information to identify your top and bottom sellers is point-of-sale (POS) software. The sales reports reveal which and how many items are being sold.
But take it a step further, a good analytical mind and a data analytics platform will compare data from inventory and POS platforms. This way, you determine each item’s actual popularity and susceptibility to theft, spillage, and waste.
In the context of the F&B business, this principle states that 20% of your offerings account for 80% of your revenue.
It would be nice if all of your dishes deliver equal monetary value. But the reality is that some items sell more than others do.
The Pareto Principle isn’t universal, though. Your post-analytics insights might show that, instead of 20%, 30% or 45% of your menu items yield 70% of your revenue.
The point is that you need to realize that there will always be unequal distribution of sales. So you need to concentrate more on your bread and butter, for the risk it carries is more impactful.
We’re not saying that you should ignore the smallest contributors to your coffers. You should monitor the quality of your services across the board. But the taste and presentation of your top sellers should remain consistently good to generate repeat business.
Furthermore, you should focus on expanding the profit margins on your best sellers. Raising their selling price is the easier route to take, but asking for more money for the same commodity might turn some customers off.
A better (but harder) approach is to employ sound menu engineering tricks to maximize your net profit behind the scenes.
Once is a fluke, twice is a coincidence, thrice is a pattern.
Trends don’t last forever, but they don’t happen by chance either. When you analyze your data, it’s imperative that you look for patterns to base your strategies on. Since every decision comes with opportunity cost, it would be wise to plan your next actions with trends in mind to avoid any losses.
For example, knowing your sales trends can help you prepare employee schedules properly. On one hand, blanket staff coverage can get expensive. Alternatively being short staffed will minimize your table turnover rate on busy days because you won’t be able to serve customers as quickly as possible.
If you have multiple locations, sales trends can keep you from hiring too many people. You can plan work shifts more strategically when you know your branches’ hourly, daily, and holiday traffic volumes.
Moreover, awareness of customer behavioral patterns enables you to exceed expectations.
For instance, you can personalize your service to customers based on historical guest data. Recommending the table where your loyal patrons typically sit or purposely offering their usual orders are simple gestures to wow them.
Happy customers tend to spend more, so studying trends can boost your sales per customer.
Examining the performance data of your servers can result in greater productivity.
By observation, you can notice which of your employees are better with customers. With data analytics, you can confirm who the prolific sellers are.
You have to know which among your servers are the best at upselling items. It’s the only way to fine-tune your training initiatives and help others replicate the success of your best servers.
Data can capture each server’s strengths and weaknesses. Analytics can help make these positive and negative characteristics easier to find.
Many F&B business managers depend on pure intuition to demystify the art of upselling. The problem here is that your notions of what good sales techniques can be entirely subjective.
Data-driven training is based on evidence. Since it’s proven to work in actual situations, your servers can develop the right habits, get rid of the bad ones, and hone their powers of persuasion more quickly.
In restaurant data analytics, you won’t find success overnight. You have to collect sufficient historical data to work with, and then allot some time to test your ideas. You’ll need to find the balance between giving a test a chance to succeed but not waiting so long that you lose waste time and money.
The amount of time needed to see reliable results can vary on what you aim to achieve. Identifying your best sellers generally requires just 14 days, whereas increasing your profit margins is at least a 2-month activity.
Give your tests time to work! Prematurely assessing your data to gauge success can derail you. You might throw out an idea, before it has had the time to set in and make a difference. That’s why you need to switch between sprint and marathon mentalities to modulate your expectations.
Admittedly, trained data analysts are highly sought-after around the world because not everyone can do what they do.
But thanks to Mosaic Solutions’ integrated restaurant management platform, you can improve your business intelligence. With or without a data analyst on staff, you can glean actionable insights from your raw numbers on your own.
The tips we discussed here are just basic recommendations. With creativity and experience, you can capitalize on our solutions to steer your F&B operation in the right direction using data analytics.