Chances are, you are already collecting data. Do you know how to use it? If you have a digital POS, you should be benefitting from the data you’re certainly already collecting. Data analytics play an important role in making informed business decisions for your bar and can help bring labor, management, and business intelligence together to scale your business. The national chains are doing it to operate as lean as possible, so can you.
Like all the other small, medium and large businesses, restaurants and bars collect data but rarely use it in order to make important decisions. Data analysis can help to enhance customer experience, minimize costs and boost sales.
Data analysis helps you to stand out
You might have an app for your business that can help the customers to get the home delivery or book a reservation. Do you know if it is necessarily profitable for your business? If the answer is a ‘YES’ you would probably invest more in marketing the app. But if the answer is a ‘No’ it will be a waste of time and money. For this reason, it is important to analyze data to ensure the success of marketing your bar or restaurant.
To provide personal, fast and easy customer experience is essential. Companies have the opportunity to create a great customer experience by tailoring their experience using advanced data analytics will result in long-term loyalty. According to some research, more than 50% people switch the brands due to the bad customer experience, but avoiding a bad experience is no substitute for creating a positive, personalized one in the first place. Keeping this in view, it is essential that you gather, understand and analyze the statistical values to make a decision that is favorable for the long-run survival of the business.
If it can be measured, it can be analyzed.
With easy to use data analytics tools like Bevager, Foodager, and Partender you can find the per unit cost of the items and then set a favorable sale price before you launch a marketing strategy. You can do an in-depth analysis of all the associated costs of your restaurant using the sales report from the POS system via it’s API, or how computers shake hands.
Calculating per unit cost of the items now takes seconds, where just a few years ago, it would take days. Gone are the days when restaurateurs and bar owners are buried under piles of spreadsheets to calculate the cost of each item manually. You can calculate the cost of each item down by the liquid volume, or more accurately, to the gram. Once you are able to calculate the value down to the penny, you can customize the items in your menu to ensure higher profits for your business.
Be sure to test, test and test over again to define a proper marketing strategy for your business. Know that making decisions based on analytics is not an overnight task. An ongoing data analysis will help you have the perfect strategy for your business.
Pay closer attention to the data
The core purpose of data analysis is to provide amazing value to the clients. According to the statistics, 94% of people in the US never use AI in order to identify a bar in their surroundings. 95% of the people prefer to have some real person serve them food. More than 89% people avoid using phone thumbprint to book a reservation. Human interaction conquers even the best technology in the world, therefore value the human connections and let your business grow exponentially.
Before crafting the marketing strategy for your bar or restaurant use data analytics to identify pain points in the areas mentioned below. Once you are able to find the pain points address them before launching the marketing strategy. This will mitigate any waste in spending on marketing.
1. Take better control over inventory using data
It is pure logic that depletion of the stock does not always picture the high demand of a particular food item. Theft, waste, and spillage are few of the other factors that can result in depletion of the inventory. If you want to invest in marketing a certain product, firstly see if it has a genuine demand. Using the data in a smarter way will help you understand which item is performing better at your bar and restaurant. From the starters to the high-end cocktails, you will find out exactly what are the profit margins and gross revenue of each product.
This will help you know what do the guests really demand and so that you will be able to invest in what actually needs the help.
2. Minimizing labor/staffing costs
Professional bar owners and restaurateurs know that it always takes more than just a great menu to boosts their profits. Unfortunately, most bars and restaurants focus on increasing the number of guests and overlook the staff turnover. Losing a single staff member involves both direct and indirect costs, and it is not just about changing the scenery.
Data shows one of the highest percentages of costs involved in the restaurant business is labor cost. If you use the data points for your bar or restaurants, you will be able to forecast the staffing and labor costs and optimize the budget. You can also cut short the unnecessary costs and mitigate staff turnover. You need to realize that both over-staffing and under-staffing can diminish your profit margins. Using data analysis you can get optimal revenue while minimizing staffing costs involved in advertising and hiring for a position that is not actually required.
3. Choosing the right product that can boost sales
In order to boost sales using easy steps, restaurants need to collect the right data that can be translated into higher profits. To do that they need to identify their unique pain points. Bar and restaurants should have a clear idea about what problems are they going to solve. The next step is to take action from the point of reference among already identified pain points.
Let’s say if the intention is to improve the sale of a specific cocktail that is not performing satisfactory, firstly they should identify how the top performing cocktails differ from the ones not performing so well. Once they are able to identify the difference, they should take action to introduce similar characteristics to the overall system. Analyzing the top performing, lowest cost items and then spending marketing costs will boost the profits exponentially…can you say happy hour?
4. Use data analytics to improve customer experience before marketing your product
People misunderstand that the value is price-driven. Bar owners and restaurateurs should understand the fact that providing great customer experience is more than just price. Data analysis can help you understand customer sentiments, and experiences so that you can create value-driven marketing campaigns. This can also help in creating a predictive analysis to create an amazing, positive, long-term customer experience.
You can boost the drive-through experience using predictive analysis and make favorable marketing decisions in the long run. Data analysis can also help in generating customized personal orders and delivering desired products through app transaction.
If you are able to analyze data to translate customer sentiments, you can scale your bar business easily. Today, people can easily write critical feedback or recommend a bar or restaurant, rest word of mouth works really quick. Make sure you analyze the customer sentiments very carefully and use the results to make big decisions in business operation.
5. Favorable pricing strategy
There is no single marketing strategy which fits all the bars and restaurants. The success of your bar or restaurant is defined by overhead costs, your team, your customers and market conditions is certainly a factor.
Data analysis can help restaurants make great decisions in several areas. A better pricing strategy is one of them. If restaurants are able to evaluate the data points they will generate significant revenues even if the total number of customers decreases. Digging deeper into the data and precisely analyzing the insights can help to stand out on pricing journey. They can help define the most ideal price for each and every product.
Whether it is your big or medium to small scale bar or restaurant, you can still use the data points to create an amazing pricing strategy. Traditionally, only big restaurants and bars have been using data analysis to make decisions. This is due to fact that higher costs were associated with data analysis. But today you can spend a few dollars to get a very effect data analytics tool. It is far easier to get the tool, analyze the data and make great decisions for your business.
Either you are naive bar owner or an experienced restaurateur, know that each data point is important for the success of your marketing strategy. Jason littrell consulting can help you make sense of your data before you could decide to invest money into your marketing strategy. Get in touch with us today via our contact page to get an instant consultation for free.