In the past few years, tipping has experienced a strange evolution. During pandemic lockdowns, consumers embraced it as a means of expressing appreciation to restaurants going the extra mile to remain open. But as restaurants’ adoption of the automated systems to facilitate tips dovetailed with a return to relative normalcy, tipping fatigue has set in, with consumers taking to TikTok to express frustration with being prompted to leave a large tip for the purchase of a muffin. To be sure, tips are still an important part of compensation for restaurant employees, and operators may need to take some steps to help guests navigate the new environment and feel good about leaving a tip when they choose to do so. A recent report from the National Restaurant Association advises restaurants to clearly communicate their tipping policy to guests – on the tipping screen, on receipts, or on menus, for example. Are you pooling tips? Which staff benefit? How are tips helpful to your team? When prompting guests to tip using a tipping screen, consider how much service you have provided and decide whether to use a dollar amount or percentage. If you’re a bakery or coffee shop, you might suggest a few small dollar amounts under $10, whereas a fine-dining restaurant might suggest a few different percentages of the food/beverage cost (not including tax). Or, offer a combination of options at different times of day based on what you’re selling – your POS should allow you to customize your display. Include a “no tip” option and don’t make the first option on your screen the largest one – no guest likes to feel like they have to hunt for a less-than-top-tier tip while the server stands by. Finally, weed out tipping options that are clearly out of place, like a 50 percent tip on a quick-service burger. If you’re fortunate enough to have guests looking to leave such generous tips, just give them the option to leave a custom tip of their choice. Intouch Insight’s newly released 23rd Annual Drive-Thru Study tracked the performance of key brands in the quick-service space – and some of the lessons are worth considering in other restaurant categories as well. For instance, suggestive selling was again found to be a useful means for restaurants to direct guests’ attention to special offers and boost check totals. While it tends to add time to transactions, it doesn’t do so evenly: In the drive-thru setting, it added an average of 10 seconds to service time, but when the suggestive sell occurred after the order was placed (versus during the initial greeting) the orders took 28 seconds less to complete. Restaurant brands that are less focused on shaving seconds off the order completion process can still reap benefits from consistent suggestive selling – but surprisingly few brands follow through with it. (In the study, only 56 percent of the measured interactions across all brands included suggestive selling – even though it’s a more natural practice in the quick-service category.) That said, the brands that have implemented AI to automate suggestive selling upsold 88 percent of orders. In your online and app-based orders, are you automating suggestive selling – and incorporating AI-based applications to make consistent, targeted suggestions? Even if you’re not operating in the drive-thru space, if you’re not yet making additional suggestions based on a person’s ordering history, at a time when they are hungry and already craving your food, you are likely leaving money on the table on more orders than you might expect. It’s competitive out there: According to research from the National Restaurant Association, 47 percent of operators expect competition to be more intense than last year. To be sure, the number of tools that operators have at their disposal to collect data and draw conclusions from it are raising the bar for competition. But despite the reams of metrics operators can study about their business, gaining an edge (and building authentic connections with guests) still really comes down to traditional marketing and public relations – knowing who you want to be, understanding your audience and why people come to you, and then crafting options and offers that fit neatly into their lives. This is especially critical if your business looks very similar to others in your neighborhood. A recent report from Modern Restaurant Management demonstrates the power of understanding your uniqueness in a crowded field. It shared case studies of two coffee shops operating in similar environments – they were in comparable city locations, had many competitors nearby, and had similar menus and interiors. On the surface, one might think of these businesses as interchangeable. But one business positioned itself as a destination for people working in nearby corporations, while the other positioned itself as an expert about coffee. This key difference was the seed that helped the businesses craft distinct events, social media posts, menus, atmospheres, you name it. So what makes your business unique? Understanding this and communicating it clearly to the public is the first step in building the loyalty that your restaurant needs to succeed. Your loyalty program members are valuable – but do you know exactly how valuable? A recent Paytronix study may provide some insight. It collected in-store and online transactions for full-service restaurants, quick-service restaurants and convenience stores that occurred between January 1, 2020 and June 30, 2023. The results confirmed that active loyalty program members are climbing steadily, with FSRs seeing a 16 percent increase in members and QSRs seeing a 24 percent increase over the course of the study. But how these people are spending is more telling: The research found that in 2022, FSR and QSR active loyalty members had check sizes that were at least 5 percent higher than those of non-loyalty members. Further, the top 10 percent of active loyalty program members were responsible for nearly half of all loyalty visits (and spending) across concepts. These guests are true VIPs. In your restaurant, are they getting some special focus? There is a lot of noise in the loyalty space right now, with restaurant brands making bold offers aiming to grab people’s attention and generate increased program participation. But the offers may not even be practical for most guests. Drilling down on the data you have about your best guests will always be most helpful in determining how to take care of them. What do these guests love about your restaurant? Is it your homemade pasta? Your inventive desserts? Your friendly staff? Can you build an event, a reward, or simply include a personal touch around these elements for your best guests? The reach of social media can make it easy to reach people far from where your business is operating – and to be sure, it has helped some brands expand to new audiences as a result. But that opportunity for scale can be a distraction if there is more you can be doing to connect with the people who live in your neighborhood. A recent Forbes report notes that more restaurants are refocusing their marketing on their local communities, while also reaping benefits from technology that can capture business from the area. There is good reason for it because local marketing efforts have a lot of potential power right now: Research has found that nearly half of all Google searches include local intent and 97 percent of users search online to find a local business. When they do, nearly 25 percent of all clicks and mobile taps end up going to the first result listed in a local business search. To take best advantage of potential sales in your community, make sure you’re appearing high up in local online searches. Your Google My Business listings, use of local keywords, and positive guest reviews can all help boost your local SEO. Think of your local community and culture when you are planning your menu, sourcing special ingredients to feature, and considering who can appear at your events and help you get the word out about them. Mine your data to better understand cultural preferences and seasonal demands as you craft promotions. On social media, use geo-targeted ads and engage with the networks to interact with guests and encourage positive reviews. When global events occur that you want to support in some way, act locally by supporting or promoting a related local cause. Consumers can be tough to please – and when you add higher menu costs, smaller portions and substitute ingredients to the mix as restaurants have had to do in recent months, it becomes extra challenging to try and win guests and retain them for the long term. But experience still counts for a lot – it’s what is making people choose restaurant meals over meals at home right now – and your restaurant can provide it in little (sometimes free) ways that pay off with guests. Consider how well you’re managing these parts of the restaurant experience: Be prompt with your greetings when people walk in the door. Offer water to guests waiting for a table and promptly collect drink orders from guests who are seated in your dining room. Encourage your staff to recommend dishes to guests – it demonstrates that they care about (and enjoy) the food they are serving and it presents your employee culture in a positive light. Take care with cleaning your dining area and restrooms. Leave people with a positive final impression by making your guests’ exit from your restaurant as smooth as possible – by allowing them to pay via QR code, or letting them split checks without fuss, for example. Finally, find ways to reconnect with them after they leave. That could be sending a loyalty program member an email on their birthday. Or, if a new guest provided their email address when making their reservation, follow up with a guest survey, an invitation to receive future offers, and maybe a free appetizer if they return to you within a few months. The pandemic created some strange conditions for running a restaurant business: Dining rooms became burdens that operators wanted to unload. Then, amid the high consumer demand for delivered food, ghost kitchens looked like the perfect solution, promising low overhead costs and efficient preparation. Now, it’s become clear that ghost kitchens aren’t the stand-alone powerhouses we once thought they could be – and they very much rely on the strength of their parent restaurant brand to succeed. As reported in Restaurant Business recently, the ghost kitchen provider CloudKitchens is struggling to recruit restaurants into its facilities because the market has shifted in the past couple of years and operators aren’t solely relying on delivery to generate business. In fact, they are realizing the benefits of having people in their dining rooms or at least onsite collecting their food. Is there a lesson anywhere here? Economic and environmental conditions have sent restaurants on a wild rollercoaster ride in the past few years. Just like the ingredients in your pantry, your business should have the ability to pivot in different directions based on shifting demand. That could mean harnessing technology to operate more leanly, scaling up areas of the business that can handle additional traffic and slowing down parts that can’t. It could also mean rethinking your real estate and your team so their functions can also pivot with shifting demand. How flexible is your model? Is there room to reinvent it based on different scenarios? |
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