Strategies for F&B businesses to increase sales
Sales is the lifeblood of any business, even more so for cash flow and labor intensive ones in the F&B space. Broadly speaking, there are three ways to drive revenue growth for restaurants without increasing menu prices:
1. Increasing the total number of patrons served
2. Increasing the number of repeat visits per patron
3. Increasing how much each patron spends each time
For today, we’ll look at in-store sales growth rather than online food sales. For each of the ways mentioned above, we can look to improve each of them through:
- Marketing and promotions – drive patrons to outlets
- Staff upselling and productivity – when the patron is In-store
- Loyalty programs, reviews and referrals – after a patron has had their meal
A. Marketing and promotions
Marketing and promotion programs serve to attract more customers to your store, and buy more while in-store. Running advertisements on popular social media platforms that showcase promotional deals, reviews or new menu items can help get your brand noticed by potential customers who may not have heard about your brand before.
Through platforms like Facebook, Instagram, Tiktok or YouTube, businesses can showcase new menu items, seasonal discounts, and promotions to a wide audience. Engaging content, such as appetizing food photos or limited-time offers, can attract attention and encourage patrons to visit the outlet.
In addition to digital strategies, physical banners and signages are impactful tools for directing nearby patrons to your outlet. Placed strategically outside the store or in busy areas like malls, these banners serve as visual cues, enticing passersby to step in and explore what the outlet has to offer, especially for outlets in malls or in harder to reach locations.
Advertising and promotions can also increase the average spend per patron by encouraging them to spend more per visit. One of the most popular promotion strategies used by F&B outlets is time-based promotions, to increase footfall and customer spend with bundled discounts. Examples of this include lunch or tea set promotions, typically offering a fixed menu at a set price during lunch hours or between 2-5pm respectively.
B. In-store – outlet staff productivity and upselling product/service
The front of house is where the customer-facing magic happens in an F&B establishment. Here, the focus is on enhancing the dining experience and maximizing revenue through upselling and cross-selling techniques.
Cashiers and waitstaff play a pivotal role in this process, where they can be trained to suggest mini upgrades at the point of ordering. For example, a cashier at a shop selling toast may ask the patron if they would like wholemeal bread options instead of white bread, at a slightly higher price. By engaging with patrons, especially newcomers, and recommending crowd-favorite items that contribute more to revenue, they can boost sales. Encouraging patrons to opt for set meals instead of à la carte options is another strategy employed at the front of the house.
What is critical to make the in-house experience work is to ensure that outlet staff are at full roster during peak dining hours and also encouraged to actively drive upsells and cross-sells.
For this, business owners may offer attractive, target-based remuneration like incentives to their employees. For example, they can set sales-based targets to earn incentives, measured by sales productivity metrics like Sales per Labor Hour (SPLH). (More on this can be seen here.)
C. Post meal – loyalty programs, reviews and referrals
Obtaining favorable online reviews from patrons immediately following a great meal experience can help increase visibility and credibility of your restaurant to other prospective customers. Often, it is social proof from seeing other netizens sharing about their in-store experience that nudges reviewers who may be wondering whether or not to patronize your store to eventually make the first visit.
StaffAny itself has a digitized feature that can be used to encourage outlet staff to pursue good reviews from customers (learn how to use this feature here). This not only boosts the establishment’s online presence but also serves as a form of word-of-mouth marketing.
Loyalty programs are key tools to foster lasting connections with patrons and maintain revenue streams. One popular way to implement this is the classic stamp card system, where customers receive stamps for each purchase, eventually earning a reward or discount.
Finally, referral programs, often integrated into loyalty apps, provide incentives like promo codes when existing customers refer friends. Such strategies not only enhance customer loyalty but also contribute to a positive brand image and increased patronage.
Which of the 3 approaches should you focus on?
Each approach has its own advantages and disadvantages, which is why identifying unimplemented or underperforming areas is so important. For example, when considering marketing and promotional efforts, these initiatives demand marketing capabilities, including knowledge of specialized software and talent. While these can be valuable, their suitability varies for different F&B establishments at different stages of their journey.
Regardless of the situation, enhancing the in-store experience is essential, as it is the only common area across all F&B businesses and directly influences the patrons’ experience. Even with robust pre or post-visit programs, the in-store encounter is the pivotal factor that can either increase repeat visits and word of mouth or lead to a negative review.
To optimize in-store effectiveness, there are two things that can be done, namely leveraging incentive programs to drive desired staff behavior to provide better performance when working as front of house, and employing technology to monitor performance to make work more efficient.
How incentives for F&B outlet staff can drive in-store sales
Sales incentives have long been used to motivate F&B employees and drive up sales. These incentives are rewards you give your employees for reaching specific targets or goals.
Sales incentives can be used to reward your outlet staff for selling a target number of products, perhaps for a new menu item, or for a total sales amount for the whole outlet. This is especially important during peak hours where operations gets hectic and staff get stressed, but the opportunities for boosting sales are at the highest.
Offering financial or material incentives to inspire your outlet team to reach for their goals and then surpass them is critical. It may be nice for staff to be acknowledged and receive praise for doing well at work, but non-material incentives can only go so far.
What makes a successful incentive program
Crafting a sales incentive program tailored to motivate your unique sales force is crucial. Consider these best practices for success:
1. Set Clear and Achievable Goals
Avoid the temptation to set overly ambitious goals that may discourage or disengage your outlet staff. Instead, maximize the effectiveness of your program by establishing clear, realistic goals that the team can attain. Before launching the program, explain how it works, how performance will be tracked, and the rewards for achieving targets. Allow staff to provide input on the fairness of the parameters you’ve set.
Reaching goals is usually gauged by using important performance indicators (KPIs) and metrics that relate to the specific targets. One of the effective KPIs to see how achievable the intended goal is by tracking sales per labor hour (SPLH). Sales per labor hour measures how productive your staff is. SPLH is the total revenue earned divided by the total number of labor hours worked.
Analyzing sales per labor hour helps you assess if your investment in staff is providing a good return. In the modern era with digitalization tools, business owners and managers can use software like StaffAny that allows businesses to monitor sales per man-hour and make data-driven decisions to improve workforce productivity and overall operational efficiency.
2. Embrace Healthy Competition
Beyond measuring the individual outlets performance, benchmarking performance across outlets helps to encourage healthy competition across branches, and allows HQ to set programs more effectively.
Additionally, introduce a bit of competition to ignite motivation, push individuals out of their comfort zones, and boost team morale. Publicly recognize staff performance within the incentive program during team meetings, displaying progress and achievements. Encourage team members to support and challenge each other, creating a positive environment that propels them toward their goals.
Healthy competition can also be promoted using a number of digital communication channels owned by the business. For example, if the business has staff rostering software such as StaffAny that provides messaging or broadcast features, then managers can use that channel to share sales achievements, individual accomplishments, or milestones of their employees.
This feature enables seamless communication and the dissemination of key information, creating an environment where employees can engage in friendly competition. Broadcasting such updates instills a sense of pride and encourages employees to strive for excellence.
3. Offering the Right Incentive
There are many ways to motivate your outlet team. Depending on factors such as your company’s salary structure, business objectives, budget constraints, and your team’s preferences, your program can encompass both monetary and non-monetary incentive.
Monetary incentives are payment made to outlet staff based on their performance. These incentives are great for showing a direct link between performance and reward. Moreover, they recognize how your team’s efforts impact its revenue.
Some examples of monetary incentives include:
- Cash rewards
A drawback of this is that it requires significant operational overheads to administer as managers must carefully calculate the amount of money that matches the performance of the staff and make necessary disbursements in addition to managing payroll. In Singapore, CPF contributions are also payable on bonuses and cash-based incentives, leading to additional line items to be coordinated and reconciled by multiple departments.
Not everyone is driven by money-based incentives. Non-monetary incentives are an alternative for outlet staff that have different motivation when it comes to work.
Some examples of non-monetary incentives include:
- Retreat or spa day
- Team night out
- Extra paid time off
- Free online courses or gym memberships
- Gift Cards
How to optimize F&B incentives in the digital era
Technology can be a valuable tool for improving outcomes and maximizing transparency, especially when looking to implement more incentive programs. They let business leaders analyze, track and pay bonuses, commissions and other types of non-monetary compensation.
With incentive management software, concerns about miscalculations and performance monitoring are eliminated, thanks to a traceable, data-driven approach. This gives a clear picture of performance vs payout. In addition, software automation can also reduce administrative burden.
That way, the chance of increasing sales at the ground level will be greater.
How management technology works in StaffAny
EngageAny, our recently launched incentive management technology simplifies the administration of your incentive programs in the F&B industry. Monitoring progress becomes effortless, and with gamification features, your outlet team can engage in friendly competition while striving to achieve their goals.
Sales performance can also be tracked with Staffany’s hourly sales tracking feature. This feature provides performance transparency without having to spend a lot of time consolidating data from sales reports.
For example, you want to increase sales of seasonal menus during the holiday season at your restaurant. Then you want to encourage outlet staff to be more active in promoting the seasonal menu to the patrons by giving challenges and rewards to them based on the achievement of seasonal menu targets that have been set. At the end of the month, the manager or the owner can check how many promotional items were sold by each staff member and give awards to those who have reached the sales target.
This can be done easily if you have incentive management technology like StaffAny provides in their EngageAny. With EngageAny, you can create a digital gamification challenge for sales. Staff will be rewarded with coins that are automatically calculated based on the number of sales they complete within a certain period of time. See the illustration below.
With these coins, staff can redeem various rewards from the Rewards Catalog.
Incentive management technology provided by StaffAny also addresses the issue of non-monetary incentives. Usually, the options for non-monetary incentives that are bulk purchased may be limited and irrelevant to employees’ desires. But with EngageAny, a variety of rewards are available, taking the form of redeemable coupons ranging from F&B vouchers, transportation, to shopping. Employees can select the incentives they want rather than a one-size-fits-all option.
The Wrap Up
In-store processes (front of house) is crucial for the continued success of F&B companies. Regardless of the situation, improving in-store processes is critical, as it directly affects the customer experience. Even with strong marketing and promotional efforts on social media or post-visit programs like loyalty programs, the in-store encounter is a critical factor that can increase revenue streams or miss opportunities.
Since the in-store process is important, the outlet staff needs to be consistent in providing the best service to the customers who come to the F&B establishment. In an effort to achieve operational excellence, F&B businesses can strategically implement incentive programs and technology solutions. This not only improves staff engagement and efficiency, but also contributes to enhancing the overall in-store experience.
This dynamic approach ensures a comprehensive strategy that encompasses both human elements and technological advancements, aligned with evolving customer needs and expectations in the competitive F&B landscape. And in this era of technology, F&B businesses can consider a number of software to support in-store processes such as StaffAny.