5 Tactics for Restaurant Profitability
To say that 2020 devastated restaurant profitability would be an understatement. More than 110,000 restaurants closed permanently or long term, according to the National Restaurant Association. And as an owner or employee of a restaurant, no one is more uniquely aware of the challenges faced than you.
In this blog, we’ve compiled tactics for restaurant profitability that will help you start 2022 on the right foot. Read on for 5 tips that will help you run a successful and profitable business this year.
1. Invest in the right online ordering platform.
Online ordering became a vital lifeline for restaurants at the peak of the COVID-19 pandemic. Even long after the pandemic has ended, consumers will continue to use online ordering to patronize their favorite restaurant.
But just as 2020 underscored the importance of online ordering, last year also emphasized the importance of choosing the right online ordering partner. Many restaurants may have turned to third-party marketplaces to establish an online presence, but paying commission on every order leaves little profits for restaurants. Make sure your online ordering partner follows a more sustainable pricing model, like a flat monthly fee, so you keep your profits.
2. Keep delivery on the table.
If you shifted your restaurant operations in 2020 in favor of both takeout and delivery, you’ll want to keep delivery as one of your restaurant profitability tactics in 2022. Even as the bulk of your customers return to indoor dining, many will continue to rely on delivery–for some, due to a desire for added convenience and for others, out of concern for safety.
According to Constant Contact, 72 percent of consumers said they expect to be back to doing business in-person within the next year. But it will take some time, as only 15 percent of people currently feel safe returning to physical stores; 52 percent said they would feel safe returning in less than six months.
If you don’t have your own delivery drivers, choose a commission-free delivery partner that offers you control of your brand and the flexibility to split delivery rates with your guests.
3. Offer your customers convenient payment and pickup options.
Features such as curbside pickup and contactless payment exploded in popularity in 2020 because they facilitated safer interactions between staff and customers. To be ensure restaurant profitability in 2022, it’s important to offer your customers more options for doing business with you.
According to Constant Contact, consumers listed curbside and in-store pickup and outdoor dining as the most popular things businesses tried in 2021 – and diners now expect these options to become standard practice. Contactless payment also became commonplace among restaurants that were open for dining. According to Bluedot, 53 percent of Americans downloaded more apps to reduce contact with on-site staff in 2020.
Just as Amazon has launched cashierless grocery stores, and Apple and Google Pay have enabled us to complete transactions with a tap of our phones, consumers will be drawn to easier ways to pay their bill even when dining in your restaurant.
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4. Protect your brand with a mobile app.
Next among our tactics for restaurant profitability is investing in your own branded mobile app. Your customers are already accustomed to using third-party marketplace apps to order food. But many are becoming increasingly aware of the costly commissions these apps charge restaurants. Your diners want to support local businesses. As the pandemic continues, 72 percent of consumers said they will make more of an effort to support small businesses, a recent survey showed.
By enabling online ordering from your very own branded mobile app, you help your diners order your food in a way that is comfortable for them. Your custom mobile app gives you an additional revenue stream that’s free of commissions. Plus, when they use your app, they’re only interacting with one brand–yours. They’re sure to give you a boost in customer loyalty. Among ChowNow restaurant partners, diners who have downloaded a restaurant’s mobile app order twice as often as diners who haven’t.
5. Take advantage of your customer data.
If you have your own online ordering system, it’s time to harness the power of your customer data in 2021. Customer information, including names, email addresses, and order history, is essential for both customer retention and acquisition. If you don’t yet have access to your customer data, switch to an online ordering system that helps you collect it.
In fact, if you rely on third-party marketplaces for online ordering, you’re enabling these companies to collect data from your food orders. Instead of helping you promote your business, they use this data to market other restaurants to your customers. With access to your customer data, you can entice your diners to come back with a targeted email marketing campaign and other types of digital advertising.
At ChowNow, we’ve built our platform to help set up our restaurant partners with tactics for restaurant profitability. We build restaurants online ordering systems where they can take unlimited, online orders, 100 percent commission-free. Every ChowNow restaurant partner has their own restaurant success manager to help them maximize their growth.