Mirus Reporter

In the complex equation of analyzing profit margin for your restaurant(s), there are always new ideas and trends that emerge worth replicating by both finance and operation restaurant executives. So far in the first quarter of 2014, one hot trend is menu engineering. While the basic objective of menu engineering is to become more profitable, some constants (outside of the menu) will always remain – to view them, click here.

Finding new ways to maximize the overall profitability of a company, aside from customer satisfaction, is the Holy Grail of the restaurant industry. Especially with the uncertainty surrounding the Affordable Care Act (ACA) and the affects it could potentially have on the bottom line. Fact is, when more money is being made, everybody is happy and more investments can be made into the business.

For this post specifically, we’re going to delve into 3 of the top strategies to maximize profitability simply by reengineering your menu offerings on a few products. And, maybe a little upselling of those products along the way.

Have you heard the news lately? Apparently Millennials are just terrible (Let me go on the record to say that I resent whoever said that – because I am a Millennial). Millennials, commonly referred to as Generation Y, were born between 1981 and 2000 (33 – 14 years old). They are known as the entitled generation who are lazy and have a poor work ethic. Ouch. Regardless of your opinion of Gen-Y they all have a mouth and a stomach. What’s your approach for getting them into one of your restaurants? Millennials love to eat out but getting our butt into your seat can be rather challenging and the traditional forms of marketing aren’t going to cut it. Ready for some statistics?

Ok good, here’s what you need to know about Millennials:

• 93% of Millennials use a mobile phone (79,980,000)
• Among those, 63% use smart phones (50,387,400)
• 93% of Millennials actively use the Internet
• 84% of Millennials are Social Media users (72,240,000) – (As for the other 16%? Their parents won’t let them…)
• More than half of the U.S. users on Twitter are Millennials (25,000,000)
• 75% of Millennials are on Facebook (64,500,000) – (1/3 of all Facebook users)
• Four out of every ten video views come from Millennials
• 86 million … number of Millennials in the United States – 27% of the entire US population
• Millennials account for $1.3 Trillion in annual consumer spending – 21% of the total

I don't always try to prevent loss. But when I do, I do it manually.

Loss prevention within the restaurant industry is a hot topic right now. There’s something awkward and unsettling about it, too. Operators want to act like they have it under control and financial executives are hesitant to disclose that loss is actually occurring. Why? My theory is that they don’t want to appear vulnerable. I heard a story a few weeks ago where an employee had stolen over $5,000 and it flew under the radar for about three months until a District Manager finally realized something wasn’t adding up on the P&L. There isn’t an end to that story yet as it is still being settled in court. Which brings me to my point: there’s a manual and automated methodology to preventing loss. (Although I would go as far as saying that preventing is not the appropriate choice of words … restaurants are always at risk of being stolen from – so the only sure fire way to prevent loss would be to hire an auditor to be at each location everyday. Who can afford that, anyway?)

Would you like fries with that?

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?

Whether you own one restaurant or 100 there's no eluding the fact that you, at some point, have run a promotion.

Chances are you're running one right now! From a consumer perspective, restaurant promotions are ubiquitous. You see them on TV, online, in your mailbox, in your inbox, on billboards ... they're e.v.e.r.y.w.h.e.r.e! The question I have for all restaurant companies is, "Are you diligently analyzing promotions on a weekly basis?" If you are, that's great! When calculating restaurant profit margin, as it relates to promotion analysis, we would argue that it takes a village to analyze. It doesn't just reside in the Marketing Department to analyze a promotion; it should also have the attention of the Finance and Operations Departments. Why? Because there are a lot of misconceptions regarding successful promotions. Marketing will get giddy when they see sales spike after a promotion has begun and think it's doing great and that success will trickle down to Operations. Once it gets to Finance, they will notice the sales increased, as well, but some Financial Analyst will look a little closer and observe that though sales have risen, the profit margin has been squeezed chiefly due to the new promotion. Then the whole company gets sad because the promotion that was increasing sales that they loved so much either can't continue anymore or needs an adjustment.

Obviously there are multiple variables that get calculated into restaurant profit margin. (We did a blog about this topic a couple weeks ago: refer to Restaurant Profit Margin | 4 Areas You Care Most About for further reading!) For this post specifically, we will discuss how diving deeper into promotion analysis can help improve your restaurant profit margin. 

Whether you own one restaurant or 100 there’s no eluding the fact that running good operations is paramount to the success of your restaurant company. Or any business for that matter. I’ve been involved, to some capacity, with the restaurant industry since I was 14 years old. My father, who is the President/CEO of a multi-million dollar restaurant company, observes one number every morning he wakes up to check out the previous night’s performance.

Whether you own 1 restaurant or 100 there's no eluding the fact that restaurant customer satisfaction is quite possibly the most important element in grading overall restaurant performance.

As operators there are so many variables that require your attention. Every restaurant company has a different approach to grading operations but one variable rings true with every organization: customer satisfaction. If the people coming into your restaurant do not leave happy, what will be their motivator for returning? ... They won't have one unless you're at the street corner handing out free product! 

Loss of any kind is a sensitive subject. In this week’s post, I had the opportunity to pick the brain of a MIRUS client who deals exclusively with loss on a daily basis. I had the pleasure of meeting him in Las Vegas for the annual MIRUS User Conference and he offered up his time to participate in a QA.

Mike Scafidi knows about loss. He has made it his career since the early 90s. Mike has helped prevent loss for big brands, such as: Macy's, Toys R Us/Kids R Us, Marshalls and PetSmart. For the past four years, Mike has dedicated his time to loss prevention for Uno Chicago Grill. Three of those four years have been spent using the MIRUS Enterprise solution for restaurant reporting and analysis. Mike uses the software for fraud detection and loss prevention, specifically.

"Big data? Big whoop... I want my data Smart" - Said everyone, ever...*

The current trends suggest that big data analytics is the direction businesses need to go in order to become more predictable and more profitable. For some companies, that will be a true statement. There’s no doubt that companies who are data driven are more successful at analyzing their business.

For the past couple months, we have discussed on multiple occasions how tight the margins are within the restaurant industry. We’ve posted 4 areas you care most about and how promotion analysis is just one piece of the puzzle where focus should be placed throughout the entire company; not just in Marketing. Furthermore, we have also talked about customer satisfaction and how important it is to analyze ordering trends using restaurant BI solutions. You can see where I am going with this, per the title of this post. Let’s dive into how customer satisfaction can impact net revenue.