In the restaurant world where margins are slim, costs are often calculated by covers, or customers. In the scheme of things, how much does it cost to attract and to retain a customer? In our post about retaining customers versus looking for new ones, we broke down how much more profitable it is to aim your resources to customer retention.
How are customer retention costs reflected in your bottom line? Everywhere. Each line item in your budget can be and is calculated as a "cost per customer". The key is that a returning customer with multiple visits is many times cheaper than the new customer.
When it comes to trimming a restaurant's budget there's a hierarchy. Obviously the cost of rent, utilities, and food can't really be cut. Also less likely to be cut is labor costs. Where you can trim costs is in the peripherals. Items such as software and contracted services.
An obvious one is reservation/FOH software, especially the ones that charge cover fees. This is the biggest per customer cost that can be trimmed. Some restaurants are paying over and over again for regular customers making those reservations an unnecessary expense. If a party of four regularly comes in on a monthly basis, why should the restaurant pay 12 times in a year for customers that were going to come in anyway? Depending on the reservation system being used, costs can be dramatically cut by changing systems.
Another per customer fee is found in the credit card processing. Over 75% of diners pay with debit/credit cards versus cash. Out of a $100 tab, a restaurant might only get $96 because the other $4 went to fees. It is possible to trim the credit card processing fees down by shopping around.
There's many alternatives in the Point-of-sale (POS) space as well. You want the best system for ease of use, but you also need to watch costs. POS companies work a variety of ways, including billing monthly subscription rates and equipment rental/purchasing fees.
Sometimes restaurants feel their hands are tied when it comes to selecting systems. In reality there are so many systems out there, it's more a matter of research.
That's why Guest Innovations has taken a new approach. Our goal is to be that end-to-end provider that takes care of all your FOH software solutions: POS, FOH, credit card processing, reservations, even email campaigns all at one low, affordable price. By bundling our services together at a low price, you save on your per customer calculations as well as with your overall budget.
Presented by Guest Innovations. Be sure to check out our affordable hospitality products Rezku, Waitku, Sendku, RezkuPrime, and RezkuTablet