It’s not enough to have a loyalty program: 59 percent of millennials quit loyalty programs because the rewards were not valuable enough, according to a recent study by Software Advice. Other common complaints: Guests feel like some restaurants string them along too long before they can earn a reward, and they feel bombarded with emails and other notifications. The right use of tech can help. The Rail suggests operators first find ways to clarify the path to rewards. So instead of saying “50 points earns you a free appetizer,” show the guest how many meals she has purchased or points she has earned toward that free offer. If you have a mobile app, integrating mobile payment into it is a bonus because it helps guests speed past the steps typically required to make an online purchase. Finally, when you send notifications, aim to customize them based on the guest’s past buying behaviors to better your chances of translating promotions into sales.
Are you among the many operators trying to figure out how to make delivery profitable? At a time when off-premise sales account for 38 percent of restaurant sales, according to Technomic, delivery has become a must for restaurants, even when the margins aren’t necessarily making the service profitable for those brands. Fortunately, new models are beginning to make the numbers work out. Recent Technomic forecasts have predicted that “subscription models that eliminate per-delivery fees in favor of a flat-rate subscription will emerge to present a clearer value proposition to customers.” The Spoon reports that a number of third-party delivery providers have come up with palatable offers for restaurants and consumers alike: DoorDash’s DashPass offers a monthly subscription of $9.99 for delivery of orders priced $15 or higher from a selection of restaurants, and Postmates has a similar offer. In the UK, Deliveroo is offering a £7.99 per month subscription for orders of any amount, and Uber Eats is reported to be testing a loyalty program that could eliminate delivery fees — if the experiment works there, it is likely to make its way across the pond eventually. Even operators who aren’t opting for subscription models are finding ways to make delivery profitable. In fact, delivery may be helping Chipotle make a comeback. Skift Table reports that delivery sales climbed 13 times in the fourth quarter of 2018 as compared to the same quarter of the previous year. Chipotle’s CFO credits a couple of factors for the success: the creation of a separate, digital food assembly line for off-premise orders, which enables the restaurant to process a greater number of orders, as well as a delivery-friendly menu (burritos and taco bowls are good travelers).
Do you have an eye on trying a new concept, expanding locations or adjusting your service model this year? While there is no shortage of challenges to launching a new foodservice business, one area where operators have a lot of support for tapping into new opportunities is in shared kitchens. These kitchens are becoming increasingly common in the industry, and because they minimize the overhead expenses of launching a business or making significant changes to an existing one, they are making it easier to test new ideas. A Medium report indicates that these shared kitchens, typically offered via a membership fee or charged by the hour, are taking a variety of forms. Delivery-only or ghost kitchens (Kitchen United is one example) can provide not only food preparation space but also business intelligence that operators can use to build a delivery program. Culinary flex spaces might better serve operators looking to test new food concepts or launch a new idea with help from the latest tools and equipment. Incubator kitchens (Kitchentown in San Mateo, Calif. is one example) are another form of shared kitchen space giving foodservice entrepreneurs a boost right now. They’re good places for entrepreneurs to build community and find resources to fuel the expansion of an idea: It’s possible to connect with food industry consultants, access technology and manufacturing space, and potentially tap sources of growth capital. At another incubator, the Hatchery in Chicago, entrepreneurs can access a talent pipeline and find new employees to help launch an idea. Finally, food truck commissaries (Kansas City’s Food Truck Central is one) are helping operators test out food truck concepts by providing power and water, along with waste disposal services.
Wage dispute claims are rampant in the foodservice industry. In 2017 alone, the Department of Labor heard more than 7,000 wage and hour claims and recovered more than $483 million in back wages for employees — nine times more than any other industry. The threshold is low for workers looking to file suit. A QSR Magazine report says foodservice operations are vulnerable if they don’t have clear policies around such topics as compensation for time needed to change into uniform, rounding employee hours, calculating overtime, or taking additional breaks. To help, the report advises you have detailed written information describing your wage and hour-related policies, as well as about meals and break periods — and that you review timecards carefully to ensure staff take their breaks. Consult an employment attorney to make sure your policies are clear and then reinforce them with staff.
As labor costs rise, your ability to monitor and manage your team’s schedule has the power to protect your restaurant’s bottom line. A Restaurantowner.com report advises operators to start by auditing the first and last 15 to 30 minutes of a shift. A leisurely pace of work during those times could indicate that you need to make staffing adjustments. Then look to your anticipated sales and guest counts and build your schedule around that instead of leaning on a repetitive schedule that doesn’t flex when business speeds up and slows down. Cost out each schedule by multiplying each person’s hourly rate by hours worked and compare that figure to your sales each day to understand where you can be more efficient with staffing. If you find you have lulls but still need staff on hand in case a large group comes in, plan to have prep work available throughout the day (versus at the start of a shift) to make best use of the people you have on hand during the day. If your shift manager carries a shift card listing employees and hours, it will be easier to see who can be assigned some prep work or cleanup, or who can be sent home. Finally, find the right balance of part-and full-time employees. Restaurantowner.com advises operators maintain one-third to one-half of staff as part-timers. It can help you avoid paying excessive overtime costs and keep staffing affordable.