Restaurant Upselling Techniques: Data-Driven Strategies to Increase Profitability

Savvy restaurant managers understand the key to increasing profits is upselling to the customer. Additional drinks and food will increase the customer’s enjoyment and their bill, resulting in more profits to the restaurant.

In the past, the restaurant industry relied on three techniques for upselling: high margin menu offerings, enhanced server training and expertise, and improving the customer experience.  But today’s enterprise-wide data analytics software can add refinements to each of these variables, allowing the restaurant to hone in on the specific variables that increase the bottom line while optimizing expenses - without intruding on the diner’s experience.

Identify High Margin Menu Items

Just because a menu item has a high ticket doesn’t mean it has a high profit. Will adding another filet mignon to the ticket drive more profit than a 2nd bottle of wine?  Without knowing your profit margin, by item, you won’t know if upselling adds to your bottom line - or takes away from it.

Enterprise-wide data analytics is designed to incorporate the entire cost of your operation, from overhead and labor to product cost, to identify the true profitability of a menu item. Where adding an extra salad in June might be profitable because of local, seasonal ingredients, adding that same salad in January might not be as profitable, especially if the salad fixings were sourced from a scarce crop from Chile. Product costs, time of year, labor, and overhead vary throughout the seasons. If you don’t know how these variables affect your margins year-round, you’ll be flying blind while your data-driven competitors rake in profits.

Server Training and Expertise

Your employees, from dishwasher to front of the house, need to be trained not only in their specific job duties, but also in the nuances that make the experience more enjoyable for the diner, and more profitable for the restaurant. Established training programs help teach servers the differences between menu items and the psychological benefits of recommending dishes, including high-margin offerings, to the customer. Some employees will thrive in this environment, and others won’t.  How can you tell which ones are successfully trained and which ones need a refresher course?

Traditionally, managers looked at average ticket sales and similar metrics to identify who was a profitable server and who needed additional training.  Today’s data analytics go deeper than just “average”. Enterprise-wide data solutions can reveal what time of day is best for upselling recommendations, what teams perform well together, what meal combinations are highest profit, and which bottle of wine should be served with your chef’s seasonal special. It might even identify innovative server techniques that could be used at other locations.

Understanding data analytics at a granular level not only helps your profits, but optimizes your time and managerial focus by pairing the right teams, providing insights on recommendations by time of day, and other variables that drive up profits while offering focused training opportunities.

Optimizing the Customer Experience

Diners often visit a restaurant not just for the food, but for the experience. Restaurant professionals strive to create a rapport with the diner, so they are relaxed, enjoy their meal, and have few psychological barriers to paying for the value of the food and service they received. There is no doubt that the human connection between server and diner is critical, something only that training, mentoring, and experience will enhance. But can data analytics improve the diner’s experience, making them more open to an upsell opportunity?

The answer is yes, data analytics can provide insights as to what and when to offer the diner. While servers are well-versed in offering an appetizer upon arrival of a hungry customer, would it be helpful to know that the signature appetizer sells best between 5:30 pm and 7:15 pm, but patrons who arrive after 9 pm are ready for a large dessert? Would a server benefit by knowing that a party of 7 people are more likely to order 3 rounds of drinks, while a party of 3 is open to an extra entree for takeout?  Understanding these nuances can help servers anticipate what diners will want in advance, helping them upsell more profitable menu items and improving the customer experience.

Data Analytics add to the Bottom Line

Data analytics can help you increase your bottom line through upselling, but also have additional implications that involve reducing food waste, optimizing labor costs, and predicting traffic flow. Not limited to large restaurant chains, enterprise-wide data analytics can interface with smaller restaurants that offer everything from pizza to sushi.

Curious how data analytics can add to your bottom line? Agilence can help you identify specific ways to improve your upselling and overall profitability with data solutions that integrate with your existing systems.

For more information on how to best utilize restaurant analytics to improve profitability across the enterprise, download "Beyond Basic Metrics: Leveraging Restaurant Data Analytics to Maximize Profits" now.