The survival of any restaurant depends on its profitability. Simply put, a positive cash flow is critical for restaurants, as it enables them to pay for rent, employee wages and inventory.
Sadly though, many restaurants across the country struggle to do so. In 2018 alone, nationally recognized chains, such as Papa Gino’s, Noon Mediterranean and Applebee’s filed for bankruptcy or credit protection. Now, amid the coronavirus pandemic, even more restaurants are struggling to keep their doors open. According to research released from the National Restaurant Association, as of this March, three percent of restaurants have permanently closed, and by April, another 11 percent were anticipated to permanently close.
Clearly, businesses in the industry are facing significant setbacks to their bottom line, and thus, knowing how to effectively increase the average check in a restaurant is of upmost importance.
What does Average Check mean?
Average check is a commonly used metric in the restaurant industry that helps restaurateurs determine the value of their customers. To calculate it, simply divide the total number of sales in a given period by the total number of customers in the same period.
How to Increase the Average Check in your Restaurant?
The easiest way to increase the average check in your restaurant is to simply increase menu prices. By increasing the amount customers must pay for a meal, each customer will spend more at your restaurant.
However, the easy way is not always the best way. Increasing prices might anger customers and lead to dissatisfaction. Before pursuing this approach, you must determine your target market’s elasticity, or how much they are willing and able to spend on a meal. Once you determine this amount, adjust your prices accordingly, but make sure to do so modestly — a $10 dish should not become a $20 dish.
2.Focus on Upselling and Cross Selling
Upselling is a sales technique in which employees advise customers to buy a more expensive, upgraded version of a product. Cross selling, on the other hand, is a sales technique in which employees encourage customers to buy a complimentary or additional product with their purchase. Although the methods are different, they boost customer spending, and in effect, increase average check.
Restaurants should teach waiters and waitresses how to effectively upsell and cross sell goods. For instance, if a customer orders a cheeseburger, the server should automatically reply with, “Would you like a side of fries with that?”
The most important thing to remember when using this approach is to be polite. Do not be pushy. This will make it obvious that you are trying to entice your customer to spend more, which can lead to a negative customer-employee interaction.
3.Offer Bundled Orders
Bundled orders are when a restaurant offers several of their products to be purchased together, often at a lower price than buying each item separately. A prime example of bundled orders is McDonald’s combo meals. Customers can buy a sandwich, fries and a drink for a price far cheaper than buying each item alone.
Bundled orders do not only satisfy customers; they also benefit restaurants. By offering multiple complimentary products together, average checks increase in a fast and efficient way.