Restaurants need to make a profit, and upselling and cross-selling are two techniques that double as ways to provide exemplary customer service and increase profits, it's a win win!
What is upselling and cross-selling?
Understanding upselling and cross-selling is key to restauranteurs who want to increase their bottom line.
The main objective of any restaurant is to produce a profit, and according to the Temkin Group, a moderate increase in customer experience generates an average revenue increase of $823 thousand over three years for a company with $1 million in annual revenue. Now that's a chunk of change.
Upselling and cross-selling are two techniques that double as ways to provide exemplary customer service and also help increase restaurant profits without spending a dime.
These tools encourage an increase in purchasing behaviour, using suggestion and psychology - and each requires a slightly different technique.
What is upselling?
Upselling involves an employee selling additional items or “add-ons” to increase the price of an item. For example adding cheese or avocado to a burger.
What is cross-selling?
Cross-selling encourages the purchase of “extras” to compliment the customer’s purchase. For example recommending a cheese plate to go with your wine.
To help boost sales and improve guest experiences, let's explore these four ways you can incorporate upselling, and cross-selling, into your restaurant routine to drive sales!
1 - Teach sales (and social) skills.
Employees are the face of your business; and armed with the proper tools can be the best asset. That is why employees need to be trained across all spectrums of serving.
This includes menu knowledge, selling techniques and social skills.
Unique skills like these give them the opportunity to connect with customers and provide individualized service – without sounding pushy.
Training employees on a regular and ongoing basis is essential, and learning how to recommend a product in a way that improves a customers meal without being pushy is a real art.
Employee training should also consider social skills, cues, and body language. The server should know the customer enough to understand when to up-sell or cross sell an item, and when to just give them the usual.
Teaching these social skills, along with ongoing menu training, and helping a server understand what items have high-profit margins, will increase sales and build better relationships.
2 - Make strategic recommendations.
Customers are often looking for a deal, but if they value quality, and trust your establishment, they are likely to be open to your suggestions.
One way for servers and waitstaff to continue to maximize profits and work on upselling and cross-selling is to promote high profit complementary items in a warm and honest way.
Work with the servers to find items with a low cost and high profit margin, and have all staff promote this complementary product as a cross-selling item for the night.
This could be a unique appetizer, or desert, or something that might go well with any customers meal. Customers will feel like the server is personalizing their experience, and the restaurant will make more at the end of the night.
3 - Memorize all the options.
Keep a running list in your head of upsells and cross-sells for every item on the menu.
Know what wines by the glass also come by the bottle, every item that could benefit from avocado and the most expensive protein add on for the salad.
Having a mental "upselling and cross-selling menu"in your head will ensure you don't miss out on the opportunity to increase a bill total, and it will make your recommendations come off sounding natural and sincere.
4 - Understand purchasing behaviour of guests.
Customer behaviour can be understood using technology and tools that analyze their purchasing behaviour. In turn, this information can be used to tailor the customer experience using e-menus and tabletop ordering, which have proven to increase bill size. Younger generations are used to interacting with screens. By removing the “people barrier of judgement and possible confusion you can increase overall bill size.
The more you know your customers, the better you can tailor your offerings to what they want. If a dinner special consistently sells out add it permanently to the menu. Recommend a wine pairing with it or ask your top customers to help you create seasonal menus. Asking high value customers to help build out menu specials gives your servers ammunition to upsell the menu.
Upselling and cross-selling techniques do not have to be obvious, blatant or annoying. In fact, the more natural the process is, the more helpful it is to increase bill amounts, and help build valuable customer relationships, causing customers to return. Customers not only feel important and loved, but they experience true value when visiting your restaurant.
The bottom line is there is always a way to make or save money when you look at your business strategically, and it doesn't involve upselling or cross-selling.
If you haven't already, be sure to invest in a restaurant software system that can also help you cut costs by streamlining your workforce and payroll, while integrating with the leading POS brands to help you pull sales & labor data!
It could be your most financially beneficial move yet to increase restaurant profit.