Restaurant Operations Benchmarks for Business

Your Source for Restaurant Marketing & Retail Marketing Best Practices

Posted by Allen Graves on Jan 22, 2020 8:34:00 AM
Allen Graves

When it comes to running a successful and profitable restaurant business, restaurant operations certainly cannot be overlooked. Making operations decisions on a hunch, or with a personal opinion, can turn out to be devastating for your business.

In order to make intelligent decisions, and to make sure those decisions are indeed having a positive impact, you need access to accurate, real-time data.

Until now, access to this kind of data was very expensive to obtain. Likewise, it was only a snapshot in time. If you ever wanted updated data, you’d have to spend more to get it.

restaurant operations benchmarks

WiFi Analytics Can Help Improve Operations

Fortunately, WiFi technology has given restaurant owners and operators the ability to gather and measure actual customer behavior data in real-time. Here’s how it works.

Any smart device – cell phone, laptop, tablet – that has its WiFi turned on, constantly sends out a WiFi signal. By listening for those signals, a WiFi analytics platform like Bloom Intelligence can see real-time customer behavior data from your actual customers who visit your physical location. Moreover, the cost of receiving this data is pennies-on-the-dollar compared to purchasing traditional market research data.

Improve Restaurant Operations Guide

Even if customers never log into your WiFi, you will be able to see extremely valuable key performance indicators (KPIs) that you simply have never been able to see before. These KPIs can help you make the intelligent, data-driven operations decisions that are crucial to a successful, profitable restaurant business.

Here are two examples (and variations) of the KPIs you’ll be able to see, dwell time and visitor return rate.

Customer Dwell Time

Since WiFi signals are constantly being sent by smart devices, it is very easy for your WiFi analytics platform to understand exactly how long a customer is at your physical location.

How long do customers spend in your place of business? Do you know? And does it matter?

The amount of time customers spend in a store is called "dwell time" and it's an important KPI for any brick-and-mortar business. Dwell time is related to several important metrics like customer satisfaction, shopping/dining experience, and even sales.

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Measuring dwell time can give important insight into your physical location’s performance. This metric can also reveal potential areas for improvement and growth. But the most significant measurement restaurant owners should be aware of is the impact of dwell time on sales volume.

According to a study by PathIntelligence, increasing dwell time by just 1 percent leads to an average 1.3 percent increase in sales. Although 1 percent may not sound like much, let's take a look at how those numbers look in concrete terms.

For this example, let's say the average customer spends 60 minutes at your restaurant and spends an average of $30 per table. If you encourage customers to stay only 6 minutes longer, they'll spend an average of $3.90 more at your business.

Six minutes isn't long if you're sitting down for a meal, so as long as your customers aren't strictly bound by time limits like a lunch hour, increasing dwell time to increase sales is perfectly feasible. As customers spend more time at the table, they're more likely to order additional items like coffees, drinks, and desserts.

dwell time restaurant benchmarkOf course, the study acknowledges that sales and dwell time change based on external factors like holidays or the weather, which are out of your control.

Longer dwell time at your store reflects higher customer satisfaction. There are dozens of factors that may contribute to satisfaction at a restaurant, but it's easiest to identify areas that might drive customers away faster. Factors that decrease dwell time include:

  • Poor or slow service
  • Dissatisfaction with menu items
  • Difficulty finding what a customer wants
  • Unreasonable prices
  • Unclean store or bathroom conditions
  • Music played too loudly or not suited to customer's tastes
  • Overwhelming advertisements or decor

Nothing about your restaurant should feel abrasive or uncomfortable to customers, from decor that's too bright or music played too loud. Customers should be able to navigate your menus easily and ask questions to a readily available server. Although all the factors listed can encourage or discourage a customer from staying, poor service is the most common reason consumers leave stores more quickly.

Ideally, you should strive to encourage customers to browse, rather than make a quick stop. The longer customers spend in a location, the greater the chance of impulse purchases.

But beware of measuring dwell time blindly. Longer time spent in your restaurant due to slow service will have a negative effect on sales and customer satisfaction.

Visitor Return Rate

Returning customers are some of the most valued commodities a store or restaurant can have. If you own a shop or restaurant, you know the importance of having regular customers and the need to convert every new customer coming through the door into a potential return visitor.

Loyalty is central to the sales, retail, and service industries and there is also an element of cost-effectiveness when it comes to dealing with returning customers versus new customers. According to some estimates, it can cost five times more to deal with new customers then it does to work to retain the ones you have. That's why it's important to implement tools to study the metrics regarding your return visitor rate (RVR).

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It's important to recognize that your store or restaurant RVR traffic analytics will be unique to that establishment, as there is no perfect concept of a generalized, perfect RVR but, you want to shoot for something over 25 percent.

By the time your RVR is around 30 percent you are perfecting customer interactions, improving your inventory, changing your menu, improving employee training, or maybe your marketing is working better than expected. At this time, you might even notice an increase in revenue. This is a great time to invest that capital into further improving your business.

If you have a firm grasp on your store or restaurant marketing and operations strategies, you can compare it with your first-time visitor traffic analytics for a given period and look for factors that raise or lower the percentage. With Wi-Fi analytics from Bloom Intelligence, you can measure the effectiveness and detriment of changes in your business such as shifts in staff and menu to determine the nature of the causal factor behind a rising or decreasing RVR.

These are only two of the many KPIs available through WiFi analytics technology. To discover more, visit our website page about Restaurant Operations Benchmarks. There you’ll discover ways to use this never-before-seen data to make intelligent, data-driven operations decisions that you’ll be able to monitor in real time for effectiveness.

To learn more about the ways the Bloom Intelligence WiFi marketing & analytics growth tools can help you improve your restaurant operations to drive more sales, improve overall customer experience, measure customer sentiment and grow your business, schedule a free demo today.
 

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Tags: Bloom Intelligence, WiFi Marketing, WiFi Analytics

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