January brings a sharp decline in sales across hospitality, and optimising sales revenue is a hot topic once again.
Our recent analysis found that certain industry sectors have suffered as much as a 60% drop in sales this month compared to December trading. If businesses are to thrive at this barren time of year, upping customers’ spend per head is an important strategy. Here are our top tips for upselling for managers and their teams.
Cross-selling and the ‘Rule of 25’
True upselling, convincing a buyer to purchase a completely different, more expensive item, is rare in hospitality. A customer asking for a sandwich is unlikely to take kindly to being asked to buy a steak instead. Cross-selling, the addition of extra items to complement a main order, is a far more effective approach. The sandwich customer is far more likely to be receptive to the suggestion of adding a portion of chips or a coffee to their meal. A useful guide to staff, the ‘Rule of 25’ is a sales principle that suggests that items offered for upsale should add around 25% total value to the order.
Focus on High-Yield Items
The most effective upselling offers items that yield high profits for minimum labour time. Extra chips or sweet potato fries and additional soft drinks are prime examples of this. While coffee is a high-yield item, depending on your style of coffee machine, it can be time-consuming and labour intensive to serve. Team members should be careful to only upsell coffee at appropriate times. Taking three extra minutes to make the perfect flat white with a queue three deep at the bar is not going to do any favours for your bottom line or customer experience.
Premium lagers are a prime candidate for upselling
Although footfall fell at many hospitality sites in 2017, particularly wet-led pubs, average spend per head increased by three percent. This suggests a market where customers are increasingly keen to spend a little extra on high-quality products – ideal for upselling. A fruitful technique is suggesting premium brands when a customer doesn’t specify. A vague request for a ‘lager’ or ‘glass of red wine’ should be seen as an invitation to offer higher priced options in the category. Faced with a clear and positive suggestion, the customer is likely to agree.
Eyeline is the Buy Line
Studies into point of sale advertising reveal a significant increase in demand for items given a more prominent position on the bar, or displayed clearly on posters or television screens. It sounds overly simple, but if you want customers to buy more expensive items, simply letting them know they are available has been shown to boost demand by a third. For smaller operators who don’t receive centrally prepared marketing materials, creating effective adverts has never been easier. Templates and free design software are easily accessible online.
Communicate and Incentivise
With upselling, as with most aspects of running a business, the better managers communicate with their staff, the better the results will be. Team members should be furnished with clear information on which items they are expected to upsell and when. It can be a great idea to incentivise your team by offering a reward to the employee with the most successful upsells in a given period, though desire to win should never come to the detriment of customer service!
Maximising immediate sales and profits is typically good for business, but shrewd operators know that driving long-term profitability through repeat custom is a superior goal. Well executed, upselling can form part of a tasteful, personal service style that will deliver special experiences, keeping customers visiting your site time and again. Poorly or inappropriately delivered, it can come across as pushy and harm your chances of winning repeat custom. It’s important to know your audience when upselling, and lifetime custom should be prioritised over a quick sale.
Effective upselling is much easier to deliver when staffing levels are optimised. By tying labour demand to sales forecasts and analysing recent and historic trading patterns, S4Labour facilitates this. Call 01295 267400 to find out more, or book a demonstration today.
2018 is now two weeks old. January, typically the hospitality industry’s quietest month, is half gone, and the impact to sales for many venues has been dramatic.
|| Trend from Dec (Nov)
Taking data from our S4Labour software, we analysed trading patterns across hundreds of sites and saw a sharp decline in revenue this month.
Sites across all industry sectors have experienced a significant fall in sales between December’s average trading (excluding the week containing Christmas Day) and January to date.
Venues specialising in late night trade have seen the greatest drop, with total revenues falling by 60.8%. Perhaps surprisingly given the ongoing pressure the sector faces, wet-led pubs suffered the smallest decrease in sales, faring marginally better than restaurants and food-oriented pub operations, though still experiencing a 32.4% decline.
December’s festive season guarantees increased footfall and revenue for the vast majority of hospitality sites. This means the decline of sales into a barren January is particularly pronounced, but analysis of January trade against November’s average also reveals a stark fall.
Again, late night operators were the worst hit, seeing a 28.2% reduction against November’s levels. Wet-led pubs and hotels also experienced a decline of over 20%, while restaurants and food-led pubs saw declines of 14.7% and 9.9% respectively.
Empty tables are now a familiar sight for many
This data highlights how difficult trading in the early months of the year can be for all hospitality operators, and without truly effective management, many businesses fail.
A critical way to mitigate reduced sales is through effective labour scheduling. Labour is typically the largest expense to any operator, so a reduction here can be key to ensuring overall business health against a backdrop of reduced sales.
Through analysing hourly sales data and upcoming sales forecasts, S4Labour allows managers to identify times when they are likely to be overstaffed, and can therefore reduce their labour spend without compromising service levels.
It also allows its users to recognise periods of understaffing, which will be associated with costly missed sales opportunities and a compromised customer experience. Correcting these will drive valuable repeat custom and promote long-term success.
Many S4Labour clients save in excess of £10,000 per site every year, which can be instrumental in ensuring sites continue to thrive through bleak early-year sales.
Click here to find out how much your business could save with S4Labour? Or get in touch today to request a full demonstration.
As we continue to expand, we are recruiting for a Junior Developer.
The successful candidate will join the in-house team development team at our Banbury headquarters in creating and maintaining cutting edge labour management software for the hospitality industry. Please see full details below.
To apply, send a CV and covering letter to firstname.lastname@example.org.
We will be recruiting for a variety of further roles in 2018 including our ever-popular graduate programme. Details will be published in due course via our website and external sources.
[pdf-embedder url=”https://www.cattonhospitality.com/wp-content/uploads/2018/01/Job-description-Junior-Developer-December-2017.pdf” title=”Job description Junior Developer December 2017″]
February promises to be an exciting month, as S4Labour are exhibiting at two of hospitality’s biggest trade shows in London.
First up is Pub18, the UK’s only dedicated pub industry show, which opens its doors at Kensington’s Olympia on Tuesday 6th and Wednesday 7th. Two weeks later we will be taking our place amongst a host of first-rate exhibitors for Casual Dining at the Business Design Centre, Islington, on Wednesday 21st and Thursday 22nd of the month.
Trade shows are always a fantastic opportunity to demonstrate S4Labour to new operators and catch up with existing users, as well as rubbing shoulders with inspiring and influential people from all sectors of the industry.
Attendance at both events is free with advance registration. Sign up for Pub18 here, and Casual Dining here. We’re looking forward to seeing familiar faces and forging new relationships.
2018 is upon us, but for hospitality operators, the new year is all too often not a happy one.
After December’s glut of sales, January can feel like a famine. With the public watching their waistlines and looking after the pennies once more, footfall at most sites will be down causing revenue to suffer. More than ever, writing efficient rotas must be a priority for managers. Effective scheduling minimises overstaffing, reducing labour spend, but also protects against understaffing, ensuring sales opportunities are not missed and service levels are retained. Here’s our best advice:
Are your staff deployed effectively?
It all Starts with Forecasting
Accurate sales forecasting is pivotal to efficient scheduling. If you do not have a firm idea of how busy your business is likely to be, it will be very difficult to deploy the right level of staffing. It’s a great idea to equip yourself with as much information as you can before making a forecast; considering weather conditions, recent trading patterns, previous years’ data, and events in the local area will contribute to accurate predictions.
Identify Slack & Stress, and Redeploy Accordingly
We think of overstaffing as slack – times of wasted capacity and labour spend – and understaffing as stress – times when staff are rushed to the point of missing sales and delivering sub-standard service. Understanding and identifying these conditions, and redeploying labour accordingly, is an ideal way to improve the efficiency of rotas without having to cut your employees’ hours. Taking one person off Wednesday afternoon and moving their hours to Saturday night may have little impact on Wednesday but allow your weekend team to work far more efficiently, having a big positive effect on sales and customer experience.
Kitchen and Front of House teams should be considered independently
Consider Business Areas Individually
Efficient scheduling is not just a matter of how much you are spending on labour. Where the wage budget is spent is also of great significance. It’s important to consider the different areas of your business individually. You may be achieving your targeted labour percentage, but a deeper look can reveal major issues. An overstretched kitchen and underworked front of house team could at first glance balance to give the impression of an efficient site, but neither department is working efficiently. The best rotas are written by area, ensuring efficiency across the board and delivering the best results.
Shorten, Split, and Stagger to Save
We often speak to operators who we feel apply an overly blunt approach to their scheduling. They might know they need five people front of house on a Saturday night, and that their site is open from five o’clock till midnight, and therefore rota five employees to start at five and finish shortly after midnight. We feel this approach is too inflexible. The peak of trade may come between seven and ten, so is there really a need to have all five employees starting at five and finishing after midnight? Shortening shifts, staggering start times, and utilising split shifts are all important tools in keeping labour spend tightly controlled.
It’s not too early to plan for big days ahead
Schedule Ancillary Tasks on the Rota
It’s likely that your hourly-paid team members will be eager to retain their busy schedules from the festive period into January, but with reduced sales it is often very difficult for managers to do this and still hit their labour targets. It can often feel like a balancing act between keeping staff and area managers happy. An effective compromise can be scheduling employees for shifts where the focus is on tasks that don’t directly generate sales. Deep cleaning is probably welcome after a busy December, and it’s not too early to start planning for Valentine’s and Mothers’ Days, as well as Easter, which comes early this year. If you have any particularly social media savvy employees, it can be a great idea to schedule some time for them to create posts to advertise any January offers, potentially driving sales.
S4Labour provides the insight managers need to make accurate sales forecasts and write optimised rotas, resulting in reduced costs, increased sales, and improved service levels, supporting the year-round success of their business.