BOOSTING REVENUE WITHOUT RAISING PRICES
During tricky economic times there’s a central tussle between the purse strings of businesses and the purse strings of customers. Both are feeling the hard pinch of rising prices; businesses need to keep money flowing in to enable them to meet those costs and to keep paying their staff, but just as the money coming in needs to increase to meet these rising costs, customers need and want to pay less as their own money needs to stretch further, which makes raising prices feel impossible.
Raising your prices is NOT impossible. At Countertalk it’s something that we’ve discussed and covered extensively, and something that many of you have done successfully with the understanding and blessing of your customers. But if you’re uncomfortable or unwilling to go down that path, or (most likely) if you’ve already implemented incremental rises and need additional strategy to go hand-in-hand with price increases to really protect your business, there are other tweaks you can make which, cumulatively, can have a huge impact on your bottom line.
Jay Patel is founder of the neighbourhood favourite Legare, an Italian restaurant beloved by their community of locals and beyond. A passionate community following is a huge benefit for a business, but it also means a far higher level of scrutiny and feedback. To avoid alienating that precious audience, any changes made will need to feel that they’re strongly mutually beneficial, or customer-first, or something that goes entirely unnoticed. Jay tells us the things that have made the most difference to his bottom line – and might make a difference to yours, too.
At Legare we’re limited by what we can do in a 35 cover, 680 sq/ft restaurant, so we need to maximise what we have.
We’ve implemented a few things which have helped, these being:
This means at 6pm-7pm the restaurant is full of quick 1hr diners spending £30-£35 per head on food (wine and service not included) on low cost items (our pre theatre menu is a portion of focaccia for the table, a primi of pasta or risotto, and a dessert.) The menu is designed for speed, and value, as well as maximising early bookings which would otherwise be quieter periods. Most customers usually order a glass or two of wine or an additional a la carte option bringing their spend per head to £50 per person, which really helps. We are then able to squeeze in further bookings (and walk ins where possible) before the second busier seatings at 8/8:30pm.
Menu psychology and structure is important. We don’t want people filling up on focaccia, antipasti, or pasta. We always aim to get at least one dessert on the table to finish a meal. We’ve decreased the size of certain pasta portions so they aren’t overly filling. We’ve paired back on bready courses, and have lighter, protein and veg led antipasti to leave space for carb-heavy primi and secondi dishes. As mentioned we always aim to get a cannoli on every table if we can, as it’s an easy additional £6.
We have structured our wine list with slightly larger gaps between pricing so people commit to a lower or higher priced bottle. Eg. We previously had a list with £30, £33, £35, £39, £43 whereas now we have £30, £38, £44 etc. We’ve cut down on the number of bottles, but made our offering more premium and more exciting – which does two things. Firstly it’s not as daunting for a customer to navigate as there are fewer wines to choose from (but better quality imo). Secondly it forces them to commit to a wine which costs £6-£10 more. If they don’t, that’s fine, we see it as an opportunity to sell two of the cheaper bottles to them. Two £30 house wines are more profitable to us than one £60 looking at cost to sales ratios.
Getting commitment for full venue buyouts / hires means a far stronger GP with set menus, less wastage and less staffing. Everyone’s happy. Customers have their own space, we make more money with less outgoings, and we have financial commitment ahead of time.
In the run-up to the festive season, we have the potential to pull back some of the losses we have felt over the past year. At Countertalk we are always gathering testimonials and tips from business owners who are using positive strategies to implement change; please get in touch to tell us the impactful ways in which you’re making a difference to your bottom line – however creative, resourceful – or obvious. Our whole community benefits from the sharing of knowledge.