How to Use ‘Strike Rates’ to Improve Sales Performance

Maths is not a strong point for many of your staff – even the manager or head chef. So when you talk about percentages, markups and discounts, they’re probably hoping you don’t quiz them too deeply. A survey of adults some years ago found that 47/100 (almost half) could not calculate a percentage. Chances are, some of them work for you!

Explaining results as a ‘strike rate’ makes the point more strongly: 
Not so clear: ‘only 26% of customers are ordering dessert’
Clearer: ‘only 1 in 4 customers are ordering dessert’

Not so clear: ‘62% of customers have one drink at the bar then leave’
Clearer: ‘3 out of 5 customers have one drink etc etc…’

Here are examples of under-performing businesses I’ve seen:
* At a seafood restaurant, only 1 person in 12 ordered dessert.
* At a pizzeria, only 1 customer in 8 ordered a side salad.
* Only 1 customer in 4 orders herb or garlic bread with their meal.
* At a club, 300 people visited on one day and only 90 ate at the bistro.
* Only 1 wine drinker in 4 also ordered mineral water at a restaurant.
* Out of 120 function inquiries last month, only 20 became bookings.

And sometimes the results are good:
* 2 out of every 5 customers will order a second coffee if asked.
* Complaints have gone down from 1 customer in 100 to 1 in 350.
* 2 out of 5 take-away customers add a drink to the order if  suggested.

The information is in your POS and dockets, but it’s often in a mess of printouts and percentages. When you untangle it and present the numbers as a strike rate, the results are crystal clear, and the basis for comparison and action. And everyone ‘gets it’.

Photo taken at Grounds of Alexandria.

How to Promote your Green Credentials for a Marketing Bonus

Whatever you’re doing on the environmental front, it’s worth talking about and publicising. Consumers are very interested, and so are corporate and government clients – in some cases, they’ve been told to make this a priority in their choice of venues.

Put a short Environmental Action Statement on your website, and  keep adding to it as you make improvements. Here’s what to include:

Energy Efficiency: how you work to reduce energy use with lighting, heating, ventilation, air conditioning, appliances, office equipment, and transport.

Green Power: is your electricity supply contract from renewable resources that use wind, solar, geothermal or hydro-electric?

Carbon Offset Program: explain the program you use and the savings made. Comparing the numbers before and after can be very impressive.

Water Conservation: methods used for kitchen appliances, equipment and landscaping, and in a way that does not compromise hygiene and cleanliness.

Recycling: glass, plastic, metal, cardboard, paper, corks, waste oil, ink and toner cartridges are all a part of daily operations. Describe how you recycle them.

Source Reduction: Do suppliers take back the packaging supplied with deliveries or eliminate it altogether? Are polystyrene foam boxes and package still accepted with deliveries?

Sustainable Food: used where possible to support the long-term viability of agriculture, fishing and grazing. Sourcing food locally to reduce the use of fossil fuel in transport.

Tree-free Products: used wherever possible, ensuring that wooden furniture and any wooden items do not come from old-growth forests.

Non-toxic Cleaning Products: are used that are biodegradable, free of hazardous ingredients, and safe for people and the environment.

Employee Education: at the heart of an environmental commitment – how are staff educated and how is their commitment sustained? It would not be possible without their contribution.

Start with what you do now, and update as you add activities – it won’t take long for the page to be impressive! Need inspiration? Listen to this recent Podcast on Sustainability for Cafes & the Coffee Industry.

Payment and Ordering Systems seen at the Fine Food Show…

Credit card processor Tyro were at the recent Fine Food Show in Sydney, well known for their POS integration and keen pricing. For the very small operators, note that you can buy now buy a Square system from Officeworks for $25!

A quick win for every operator is to get onto the merchant services department of your bank and ask for a  rate review – most people don’t even know what they’re paying. Your challenge is to get it below 1%, averaged across all Visa and Mastercard transactions. It can be done.

Order management for the delivery economy had some interesting services on display, especially for people who want to avoid the 30-35% fees charged by Deliveroo, UberEats and the like. Systems like Orderup are now well established  – you can set up an online ordering system on your website with your own branding.  Foodstorm is a similar system  that allows for a white-label ordering setup – it’s more for caterers and has a great reputation. Drive Yellow is a new service that will handle your delivery logistics – another option for reducing hefty commissions. They are the delivery service for MenuLog.

Several generic kiosk systems were on display – McDonalds is educating us about these and many more options will become available. For now, they’re a bit clunky and tied to their own POS system, which limits usefulness. The suggestive selling architecture of these systems is what will make the winning difference.

Also impressive was Ordermentum  – tying suppliers and businesses together for easy ordering and fulfillment.

It’s a dynamic and competitive field with new players and constant innovation…

Plant a lemon, lime or even a coffee tree at your cafe?

Realistically, you won’t be able to grow all the herbs and greens you need in a cafe or restaurant garden – that would need some serious production. But you can still share your enthusiasm for fresh produce with more than just a bowl of tomatoes on the counter: plant a lemon tree, or a lime… even a coffee tree or an avocado!

What makes citrus and coffee trees attractive is that they’re quick growing, can be kept compact, and if you buy an established one, you’ll have them fruiting almost straight away – a great conversation starter. In Australia, Daley’s Fruit Tree Nursery is a great site for sourcing trees and learning how to cultivate them. Now where’s that spare patch of soil?

How to Get Employee Training to Stick!

Bob Phibbs, the Retail Doctor has shared another excellent training article that will strike a chord: How To Get Employee Training To Stick Like Gum To The Sidewalk On A Hot Summer Day.

He’s not just talking about the skills and awareness staff need to learn, but also the bad habits we need to correct and remove: how customers are addressed, how products are recommended, and essential etiquette. Taught in a way that will change behaviour quickly and minimise resistance – the 5 key training targets are well worth applying with your own staff.  It’s also a reminder that there’s a lot we can learn about restaurant sales from our retailer friends – how they work with fussy and fickle customers, deal with ever-changing trends, keep entry-level staff on their sales game, and handle relentless competition.

It was great to interview Bob for the Profitable Hospitality podcast – he knows hospitality well and shared some great insights with us. Listen and enjoy…

Help Staff with Smoking, Drinking, Gambling and Stress Problems…

We’re preparing for RUOK? Day on 14 September, and sharing some podcasts on handling addictions and stress. Pass them on to a friend who’d appreciate some help, or make time to listen by clicking on the link below. You can find all the Profitable Hospitality on the Podcast app on your iPhone, or the Soundcloud app on your Android.

Remember books? Still useful for menu and wine training, gifts etc

Illustrated books can still be useful as chunky visual aids for training, and are very inexpensive if you look for them second hand.

Abebooks is the best source for finding exactly what you want – they will probably come from a bookseller in rural England or Missouri, but the postage is minimal. Here are a few finds that could liven up your food and wine training sessions:

World Atlas of Wine (several editions) – useful for the maps and pictures, and descriptions of varietals. From $5.57, including postage!

1900 Ingredients: Encyclopedia of World Foods – for when you don’t have real life examples of daikon or celeriac or mastic or honeycomb. Most of these are richly illustrated. Only $7.38 including postage.

Larousse Gastronomique – the classic French cooking text, 95% of which is never out of date. Also a good gift for an apprentice (plus a voucher for your local bookshop). From $6.69 including postage.

The Culinaria series of books on the food of Italy, Spain, France, China etc – from $7.38 including postage.

Use books for training, gifts, decoration for the bar or front of the restaurant – excellent value…

Dublin Cafe Owner Rocks Australia – reminds us to put profits first!

250 enthusiastic cafe owners, managers and baristas packed the Sydney warehouse of Toby’s Estate Coffee last night to hear Dublin’s rockstar cafe owner and roaster Colin Harmon – the author of What I Know About Running Coffee Shops. It was another one of the Toby’s Estate Knowledge Talks – they draw quite a crowd.  Previous events with Colin were held in Perth, Brisbane and Melbourne.

His book has now sold 10,000 copies – in hard back! It’s different to the usual, dry ‘how to run a cafe’ manuals – a personal explanation of how he’s grown the business from a coffee cart, by understanding and using his numbers, building a strong team of employees, growing retail sales, and putting ‘speciality coffee’ into perspective. It’s an easy, powerful read. You can also hear me interview Colin about the book on a recent Profitable Hospitality Podcast.

Some takeaways from last night’s presentation:

  • The crowd was mostly 20’s and 30’s, with white-bread anglos definitely in a minority. Coffee is the new face of diversity, and it looks good!
  • Coffee bean retailing is a hugely valuable and under-utilised opportunity in most cafes. His main Dublin cafe does 20% and more of total sales per week from the coffee packs carefully displayed for maximum sales impact. He was tactful but firm: most Aussie businesses do this badly, and leave a huge amount of money in the customer’s pocket. And no, your customers aren’t ‘different’ and immune to retail – it’s your display and merchandising that’s probably at fault. What percentage of total sales are your packaged beans now?
  • He gave the speciality coffee tribe a gentle smack, for being a bit like a petulant teenager who insists that the accountants, marketers and business consultants ‘don’t understand’ why their product is so unique, and normal business disciplines don’t apply. It’s a business, and you need to make money!
  • He wants 2018 to be the year of viability. If 2017 was the year of sustainability, let’s make 2018 the year of good profits, and not being one of the 6 our 10 cafes that close in the first year. Making profitability sexy again!
  • He uses a thorough vetting system to ensure the people he hires will make a positive contribution to business culture. His 3FE cafes use a long questionnaire to vet all applicants – it covers everything from availability on weekends, to willingness to clean toilets and openness to diversity. He shares all 60 questions in his book, and is clear that he doesn’t hire baristas, but people who want to work at 3FE.

An awesome man, thanks to awesome Toby’s Estate for bringing him out, and an awesome book to buy and learn from….

How Your New Restaurant Training Supervisor Can Make it Happen!

Once you have more than a few staff, training needs multiply – different skills needed for different people, and various stages of development. Appointing someone as a training supervisor takes it out of the manager’s hands and ensures it will be handled, not forgotten. Training is one of those ‘important but not urgent’ projects that is easy to put off…. yet again.

Make this a part-time job for an enthusiastic employees – for you it’s just one more thing on a long list, and for them it can be an honour and a source of pride. So what will they do?

  • Organise the training calendar – one of the simplest and most effective ways to get training actually happening. You know how it’s been in the past – other priorities take precedence. Use a simple diary, or Google Calendar, and plot out the next 6 months.
  • Gather training material – copies of your menu and wine list, take photos of menu items, Profitable Hospitality articles, other relevant articles, YouTube videos – there are many options.
  • Run ’10 minute’ training sessions – focused on chunks of practical information and skills. Short menu tastings, handling a difficult customer (with a role play), review a video together, learn a selling technique, review of last week’s sales numbers, safety procedures, product knowledge quizzes etc. Keep them focused on short, single-topic sessions to start with.
  • Maximise the use of online training – services like Typsy have excellent short courses and videos for online training in a wide variety of areas. Find and review the best modules for your venue, and organise for staff to sign-up and do them. They have an excellent free membership offer available before 30 September 2020.
  • Organise induction for new staff. The training supervisor can make sure the necessary policies are explained, menu training happens and questions answered. Ticking them off a checklist so nothing is missed.
  • Organise suppliers who can offer training e.g. cleaning chemicals, the coffee roaster, fish and meat suppliers, vegetable suppliers – it’s surprising how many  offer this, but it’s often not taken up. Sales people definitely get brownie points from their bosses when this happens.
  • Organise regular performance reviews – they’re easily postponed, and then another 12 months has passed. The supervisor is the person who will make sure these appointments are in the manager’s or head chef’s diary, with plenty of reminders for all parties.

Praise their work – give regular feedback, and see what they need to develop the program. Little by little the business culture is getting stronger, and fewer people are leaving…

Once you have someone in the swing of training and enjoying the process, you can encourage them to develop their training skills, perhaps pursue some qualifications and take on more detailed tasks like a training needs analysis for the business and for individual employees. Find your enthusiast and get them started on the diary!

Another day, another story of restaurant fraud…

Trusted, helpful staff given too much responsibility by weary owners, and a lack of systems for proper checking. How many times do operators make ‘trust’ their default mode with employees, instead of ‘check and verify’. When you work with cash, food and alcohol and have haphazard security, the thieves will soon find you. It was a bit sad to go through ‘the facts of life’, again, with a couple of new cafe owners…

Your Point of Sales system can be a key element in taking back control. Watching for error corrections and inaccurate use of PLU keys will soon alert you to problems – here are a few to watch:

Open Key – the one that’s used when you can’t find the one to use. A new menu item that hasn’t been added to the system, or there’s a rush and you can’t find Prawn Salad. Disable this key or make strict rules about who can use it – it’s wide open to abuse, and spoils the accuracy of sales data for stocktaking.

Voids, cancels and errors – all slightly different, and can be used to negate an order that has already been made. The end-of-shift report will show how many of these are done – they should be rare and explained.

Over-ringsOMG I ordered 10 salads instead of just one – I’ll tell the kitchen and fix it later! Maybe it wasn’t corrected, and the end of shift sales totals won’t balance with the till. In the struggle to reconcile, it’s easy for deliberate errors to be missed.

Training key – it’s there for training staff on the POS, so their practice transactions aren’t part of the shift totals. But it can be abused – I’ve been given a bill with a tell-tale letter T beside each transaction, and there was definitely no-one being trained.

More on restaurant security in my podcast interview with the Crime Doctor on How to Reduce Employee Theft in Restaurants.
Trust..and verify.