A little over four months ago we published a blog about restaurant profit margin and the 4 areas you (should) care most about. Within that list, upselling was one of the four factors we believe you should care most about as it relates to restaurant profit margin. Upselling sounds like a pretty simple strategy. Every employee that interacts with a customer needs to ask them if they want more … easy, right? Unfortunately it’s not that easy. There’s a science to suggestive selling and it goes deeper than just asking a customer if they would like an appetizer to start their meal off.
Here are 5 upselling strategies that will not only help increase profit margin but will motivate your employees and help keep your customers satisfied. After all, isn’t that what it’s all about? Repeat, loyal customers?
No brainer. If there’s a high-dollar item on your menu you want your customers to buy it. When I worked for a popular pizza chain a couple years ago, we had one store that would have (on average) over 200 guest checks a day but would only end up with around $2,400 in gross sales. Why? Well, in this case it was because this town loved the buffet (which was only $4.99 per person) but compare that to another location that would have around 150 guest checks but would do $2,600 in gross sales, per day. This store had a popular buffet as well – the key difference: their manager emphasized upselling high-dollar menu items to increase guest check average.
Have some items on the menu that are low cost goods? Sell them! Best case scenario – when strategy one and two come together. Start by looking at your inventory data and establish what goods are cheap. If they are simultaneously high-priced prepared menu items you should notice a decrease in Cost of Sales. And, surprise: guess what that leads to? Better profit margins!
All food has an expiration date. If you have product that is nearing the end, present it to your customers like it’s the best thing they will ever taste. (Not really … but definitely sell it hard and make sure the cook doesn’t mess it up) This will not only help boost sales but it will also avoid the dreaded product waste. You might as well be throwing away dollar bills when you throw out product – and as all operators know, it adversely affects the bottom line to a pretty severe degree.
Who doesn’t love a good ole, friendly competition? If you entice your employees with a reward to the winner, I can almost guarantee you will get full participation. Try and get creative with it, too. Refer to the three previous strategies; one week pick an item that is a high-dollar menu item. Next week, pick a menu item that is a high margin product … you get the idea.
Put yourself in the customer's’ shoes for a second. You’re sitting at a table in your restaurant and you look to your right and you see a table tent with pictures of products. Let’s assume you are a regular. You have the same meal you order every time. But wait. Look at the beautiful product shot of that fried pork tenderloin with mashed potatoes, gravy and a biscuit. Wow. Looks tasty. You’re sold and you have no idea that it will cost you $5.00 more for that meal (compared to what you ordinarily order). This strategy works well if you are a dine-in restaurant concept. If you are an order at the counter concept, try putting the same type of materials upfront where customers can see.
These strategies are not anecdotal by any means. I have successfully used each of them in restaurant operations. While most of them did help increase restaurant profit margin, there are many other variables you have to be aware of, as well. Operations success is not achieved overnight. It takes patience and high degree of skill and strategy to make a restaurant profitable.
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