Menu changes occur all the time in the restaurant business. You might add an item or two, change the price of existing items, run a promotion, or limited time offer. All of these actions generate, hopefully, the consequences you intended. But, most of the time those actions cause other changes you did not expect. These are the unintended consequences. In this post, we give you three important things to consider when evaluating the effectiveness of a promotion.
As soon as you launch the promotion you want to measure how your customers are reacting to the new menu immediately. In the worst case scenario, you might have to shut down the promotion if you see a strong negative reaction. That does not happen often, thankfully, but sometimes you will find that you have to make adjustments to the promotion in response to your customer feedback. The sooner you know whether adjustments are needed, and what those adjustments are, the better.
So, how should you evaluate the success of a promotion or other menu change?
Look at the results from the perspective of the customer. In counter service restaurants, your customer is constantly talking to you through the guest check. They tell you if they like your promotion by buying it. But the guest check is more complex than just the quantity sold of an individual menu item like you can see on a product mix report. Changes in the basket of goods are another way your customers are talking to you.
The report below shows an example of the market basket of good sold on the same checks as the Bacon Burger Combo during the promotion, the period before the promotion, and the percentage change in dollars. The point here is that in addition to the increased sales of the promoted item (Bacon Burger Combo), there are significant changes in a lot of the items sold in combination. In total, the sales of all the checks with the Bacon Burger Combo was $97, 452, and the sales increased roughly $3,950 during the promotion. But, what you would never see on Product Mix report is that only $977 of the increase was spent on the promoted item. The other $3,000 was spent on other items. This promotion is far more successful than you could ever tell by looking at a Product Mix report.
Examine every guest check from every restaurant - every day. That is how you hear what your customer is telling you. You might think that is an impossible task, and it is if you're not using exception-based reporting to separate the important data from the unimportant.
Look around 360 degrees of the business, and not just sales. It is understandable that people focus on the dollar and cent impact of a promotion, but sometimes there is a time lag between the promotion and the reaction of your customers. For example, if your promotion was a Limited Time Offer of new menu items, and those items take a bit longer to build in the kitchen, your speed of service is slowing down. It might not even be noticeable at first, all of us can have an off day. But, if your customers are repeatedly experiencing slower service, you have given them a reason to go look at your competitors. Combining your drive-thru timers and kitchen display systems with your point of sale data gives you the ability to see how time is affected when specific items are on the check. Look beyond the point of sale to get a complete picture of how the promotion affected your performance.
The devil is always in the details so make sure you are not looking at just summary data. When faced with the need to process all of this data, it is natural to try and simplify the effort by using summary data. The average time, for example, or the average check, are both examples of summary data. You would be better to look at the speed of service of only those checks that contain the menu item in question, and not an average of all checks. Summary data hides a multitude of issues that affect your customer satisfaction.
The reason for analyzing your promotions is to cut out those promotions that are either damaging your customer's experience or ruining your profitability or performance. If you cannot measure the unintended consequences of your menu changes, you are likely to repeat the ones that can hurt you. To see the complete picture, you have to go beyond the Product Mix report and even the POS system.
What tips do you have about analyzing restaurant promotions?
Mirus is a multi-unit restaurant reporting software used by operations, finance, marketing, and IT.
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