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Across industries, companies that successfully leverage data see an average profit increase of 10%. Hospitality businesses can take advantage of a growing array of tools that make the collection and analysis of data easier than ever.

You probably already have a good grasp of who your customers are and what makes them tick in a general sense, but data can take you one step further. Data sets can be used to reveal patterns, trends, and associations, especially relating to human behaviour and interactions. This can tell you what your customers want, where the weaknesses and operational inefficiencies within your organisation are. It gives you evidence based actions to make improvements – no more hunches.

How to collect and use data

The first step to successfully using data is to collect and build relevant data sets. The more information you have the more accurate the conclusions and analysis will be. 

As a restaurant there are a few common sources for collecting customer and operations data:

POS and data

Your POS system

Your POS system probably houses a lot of key insight into your business. With an accurate and complete record of all financial transitions and orders per guest or staff member, you can determine everything from best selling dishes to top-grossing staff.

Your online ordering system

Like your POS system, your online ordering system can house financial data as well as link to inventory management. You could even install a system like Hotjar onto your website to gather more information about how users journey through your site, where the drop-offs are, and determine strategies for optimising customer journeys. If you’re running loyalty programs through digital ordering, you’ll get an even clearer picture.

Through social media

Your marketing manager is likely managing at least some of your customer communications through social media channels. Social media can offer insights into who your customers are, what their interests and hobbies are and help build out a more complete customer persona.

Through conversation 

Old fashioned, but indispensable. One of the best strategies for gaining in-depth understanding of customers is to speak with them. This could be over the phone, through emails, in an online or instant messaging chat or it could be face to face. The key here is to make sure you are recording these conversations somewhere, and keeping track of trends. Gathering customer feedback this way is resource heavy but is something that every restaurant should think about building over time.

Use online surveys

You can use online surveys to directly ask customers for specific feedback. Be careful when creating your survey to avoid leading questions which could influence results.

Review sites

Leveraging data is all about improving service by understanding what your customers really want. What better way to do that than to gather direct feedback?

Ways data can be used to improve restaurant profits

Ultimately, leveraging data is all about increasing efficiency, improving customer experience, and optimising sales for improved profitability. But how exactly might this work?

1. Build customer profiles. You can use data to better understand who your customers are, what their dislikes and likes are, and understand their preferences.

2. Optimise your menu. Identify what does and doesn’t sell, determine your most profitable items and perfect your menu. Aside from this, you can build strategies to promote your underperforming items and high-profit margin items to increase percentage revenue.

Additionally, you can compare variations on sales on a day to day and even service by service basis. This will allow you to build out lunch and dinner specific menus as well as highlight the best times to offer deals for increasing sales.

Front of house staff

3. Monitor and incentivise staff performance. You can use data to tell objectively which staff members are performing to the required professional standards, who is serving the most people and who might need more training. You can use this data to then look for solutions and improve staff performance

4. Improve shift management. If you know down to the minute when your most sales occur then you know when you have to have the most staff on. If you know that you’re getting negative reviews on particular shifts then you can change the team around to one that works better together. By having an optimal data-driven shift management processes you can cut unnecessary overheads and create rosters that suit staff and improve customer experience.

5. Better stock management. The last thing you want to do is run out of the ingredients for your best selling menu item. Similarly, neither do you want to over-order food which will lead to wastage and loss. There is a fine balance to be had. Data can expose the cooking and ordering patterns and empower human managers to get their stock ordering spot on.

6. Forecasting. You can use data to forecast sales which will help you with all the details related to organisation and planning, so you never have to worry about unpleasant surprises.

Additionally, data can give you an overview of general eating and food trends in your niche so that you can pair new menu and restaurant management ideas with consumer demand to maintain or improve those sales forecasts.

Problems and final thoughts on using data

Successful data analysis can help you reduce operating costs in the long run. You can optimise staff costs, reduce food waste, tailor menus to customer demands and trends, and make a number of other corrections to prevent unnecessary costs.

Of course, there are tradeoffs. As with any new business practice there is the cost of getting started, and the considerable learning curve for the business. After all, your results will only be as good as the quality and quantity of data you collect, and what you do with it.