Get the Right Data to Manage your Restaurant Effectively

Let me guess: You have a full house, you think you’re making money for your restaurant. Diners are cleaning their plates, you think you have your customer base under control. Your servers are pulling in the big tips, you assume you have a successful staff.  All of this might be true – or it might not. Using these metrics to run your restaurant means you’re missing key facts to help you make smart decisions for your restaurant.

Do customers recommend your restaurant? Word of mouth recommendations tell you so much more about your customer cultivation efforts than a clean plate. Your consistently full house? It doesn’t mean you’re maximizing profit per turn.  And tip percent? You are measuring how much your staff earn, but not how much your staff are earning for you.

Successfully tracking restaurant operations metrics like guest satisfaction, profitability and server performance means putting in place a data capture and reporting system — not a hard integration but one that does require work. Sadly, few independent restaurants bother.

If your POS isn’t helpful, try services like GuestMetrics and Avero. Or see how much help OpenTable or other restaurant-specific CRM tools might be. There are no excuses for ignoring key metrics to help manage your restaurant!

Every restaurant needs a loyalty tracking system that tells you how likely your customers are to recommend you and how often they dine with you. You should also know the gross margin per item and have tactics to promote high margin items. And you definitely should track your servers’ success in driving high revenue, high margin turns in addition to tip percent.

If you know these numbers you’ll make smart decisions for your restaurant based on the right metrics. 


The POS Industry: A Three-Part Rant

The phone I grew up with was clunky and served just one purpose — talk to someone. My monthly costs were high, and long distance calls were expensive. If something broke… major trouble. Today I have an iPhone. I can do a million tasks on it easily and intuitively; apps make it infinitely customizable; and while I may pay more each month, the expense is pegged to my usage- to my satisfaction.

The POS is a nerve center of a restaurant but no matter how much improvement you drive everywhere else in your operations, the majority of POSes are at best like the old phone.  There are three big issues that need to change to bridge the divide between today’s POS and the POS of our dreams. 

1. Elegant, attractive design, once consider frivolous, is now known to improve user satisfaction and return on investment. System complexity leads to errors and long training times. And those fancy features you paid extra for? No one uses them because no one remembers how. There is a new generation of App-based POS with great user interfaces (notably Lavu, Breadcrumb, and OwnPOS), but the vast majority of restaurants still use outdated systems…and pay dearly for it. 

2. My new phone is not just pretty. It is open. Third party developers have access, building apps that provide specialized service. I use Instagram for photos and Dropbox for file sharing. Not only does this free Apple to focus on their core capabilities but I am more - not less - dependent on the phone. POSes today offer a tiny selection of third party apps (like one or two choices for online ordering) but otherwise force you to rely on their usually inferior native tools or use third party apps without POS integration. Close your eyes and imagine  a world with an easily installed MailChimp and Fishbowl email apps linked in real time to your POS. Now open your eyes. Reality stinks.

3. Perhaps worst of all, most POS companies use a sales + service financial model. You pay up front, then again for maintenance and service, and if you need something special or have a problem you pay even more. Sometimes much more. Last year, 68% of Micro’s revenue came from service. My phone, on the other hand, charges me for use: The more I use it the higher my data bill. Shopkeep, one of the better App-style POSes, has a light-weight pricing model. Not the same as pay-for-use but at least strong value.  If restaurants had a choice of POS apps I bet usage, satisfaction and ROI would go up. Would you rather pay for success or failure?

The restaurant industry is waking up to the idea that the old model serves the POS industry but not consumers or restaurants. And when a new generation of operators looks at the phone in their pocket and the POS terminal on their host stand, they are going to demand change. Easy, open, financially aligned. This is not too much to ask for. Why do most POS companies serve pink slime and call it sirloin? Demand better.