John is an entrepreneur and POS Expert with 20+ years in Software development and Innovation with ground expertise in Hospitality management, Franchise Management, and Business Development.
HOW TO UP-SELL IN YOUR RESTAURANT AND RETAIL STORE AND INCREASE YOUR PROFIT MARGIN
It happens with everyone especially in tough times where the economic situation is not helping. The sales is slow, costs are high, you're not breaking even or maybe you're losing money. You wondered what you can do to make your business step up and become in the safe zone.
It doesn’t take a rocket scientist to work out that people spend more when they have more options when suggested appropriately and at the right time.
But how can you increase revenues and your profits? Up-selling is the answer, and it’s not as hard as you think. But it will take a bit of planning and you’ll need to act now.
Your team must be ready
And when I say ‘team’, I specifically mean your waiters, cashiers, phone operators, since they are the ones on the frontline directly upselling to your customers. Therefore, it makes complete sense they should be well trained in dealing with your customers.
It also means provide extra training in up-selling techniques. But to do that effectively, you need to focus on the following:
Your servers must fully understand each of the products and services your establishment offers. This includes knowing:
- High profit items (see our blog on Menu Engineering)
- The component of any promotions like special offers (buy 3 get 1)
- Dish ingredients
- What the dish tastes like
- daily specials (soups, dessert, cocktails...)
- The best accompaniments to have with a specific dish (see our blog on food pairing)
If you want your servers to explain your products and services to your customers in an authentic way (and you do of course), then your servers themselves will need to experience all your products and services first hand. First, it helps them to memorize them, but here’s the important part, it gives your servers the confidence to talk about what’s on offer to the diners and, therefore, have an increased chance of selling or up-selling
Spot the opportunities
Train your servers to identify all the situations that lend themselves as an opportunity to upsell. This can include:
- Starter suggestions
- Side orders
- Desserts and dessert wines
- Specialist coffees
- After dinner drinks
- daily specials
- Branded beers
- Snack items
- Pastries with their coffee
For retail stores
- Promotions and free items
- loyalty points (double points, triple points)
- rewards and offerings (if the bill reaches a certain amount)
Ask yourself what is more specific for your own operations and start adding to the above list.
Teach your servers about timing. If severs try to up-sell a dessert too soon, diners might refuse since they are too full from eating their mains. Ask too late and they have gone off the idea.
Practice practice practice
You’ve trained your staff to up-sell and they are ready to go…but are they? Knowing what and how to up-sell is one thing but actually doing it is another.
Provide role-playing sessions where your servers can practice in a safe environment and get used to the art of up-selling. Present challenging situations and ways they can get past them.
Practice makes perfect. A cliché maybe, but true nevertheless. You really can’t practice enough.
Dealing with objections
Severs need to be able handle these kinds of situations. They need to know:
- How to tell the difference between a definite ‘No’, and a simple request for more information before buying.
- When a diner/customer wants something more, but you’ve just offered the wrong thing.
- How to identify the nature of the objection through asking open questions rather than yes/no questions.
Guidance and feedback
You’ve trained your staff to up-sell, but don’t just leave them to it. Watch how they upsell, how they talk to the customers, and then provide feedback on what they did well, what they could do more of, and provide support on areas where they need more help.
So, what should you be promoting?
High profit items should be up there on your list, right? Well yes…but also no. Many F&B owners use this as their ONLY criteria. But you must also think about what is of value to the customer so the up-sale can be achieved.
Also, up-selling your most expensive item might seem like a good idea but does that item meet your customer’s needs? Plus, is that item the most profitable? Probably not.
Small Bites and Side Dishes
You don’t need me to tell you that starters and appetizers are the margin makers for your F&B business, right? But did you know that millennials are shaping food and beverage offerings?
According to this Forbes article , the trend is for guests, especially millennials, to order small bites rather than a full course meal. Mixed platters that can be shared are highly popular for this reason.
Your servers, therefore, should be up-selling appetizers and low cost yet high margin items like side orders of French fries, onion rings, and so on, not to mention that extra cheese, bacon, mushrooms…to earn more on the total check.
Obviously, your diners are going to order a drink with their meal. But ask your servers to take a more personalized approach and soften up the guest to suggestion.
So, for example, the server could suggest a particular drink that goes well with the order, especially festive drinks.
This could mean pairing your house beer with your burger offering or making wine suggestions for any pasta order. Or more importantly, your house champagne with that special meal.
You’ll know what works best for your menu and diners. But make sure your servers do too.
Yes, happy hours are normally offered at 50% of their sale price but they normally cover their cost of goods plus a profit. Increasing revenues with slight profits should be one of your targets to cover your expenses.
Happy Hours are always good for attracting attention to those scrummy side dishes and starters. And this is what your server should be focusing on since most people prefer a small order while they are drinking.
No doubt, you’ll have some extra side dishes and snacks that need upselling, right?
Marketing is another strategy to promote your business/service but it will not help you if you don't optimize its use. Since all marketing strategies rely on paying for a service, so ensuring your ad is sent at the right time, is the difference between a great campaign and a bad one. Otherwise you'll be adding more expenses to your business.
Sending targeted SMS to your clients just before lunch or dinner is the best approach you can apply where customers need it most to decide what they'll eat.
According to TextMarketer in UK, the second best time to send an SMS is between 11AM and 1 PM.
You already know that the F&B scene is fiercely competitive (even more so during a tough economic situation) and your business cannot depend solely on guest orders. Up-selling is one way in which your restaurant can maintain a healthy profit margin…but only if you do it right.
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