A Winning Strategy for Restaurants in Today's New Normal: Make Quick Plays—Rooted in Data

Wisely
July 9, 2020
4
min read
Finance
Pre-game highlights:
Use real-time data to build responsive financial plans
Leverage existing resources to manage working capital
Study the other team
T

oss the Legacy Playbook

Crises like COVID-19 dramatically reshape the role of restaurant executives. They’re  tasked to manage constantly changing scenarios and regulations, quickly find their footing, and then, most crucially, safeguard the economic well-being of their business, their staff, and the communities in which they operate.

To borrow a quote from a legend, Michael Jordan, “talent wins games but teamwork and intelligence win championships.” In an era of unprecedented change, brands that emerge stronger will toss their legacy playbook, pivot to new strategies, and join forces with the smartest players in the game to reinvent, rebuild—and ultimately win.

Craft a nimble strategy using a real-time data set

Last year’s (or even last quarter’s) P&L, and 1, 3, & 5 year plans were built on historical data proving long-term trends. That data doesn’t reveal the plays you can make right now—what’s working, what’s not, what needs immediate attention, and what can wait.

Aim to permanently build speed and flexibility into financial planning. To quickly iterate on possible financial scenarios and implement rolling forecasts, collect real-time data from new sources. Then, assemble a cross-functional team to ask necessary questions:

  • Guest Needs: What are the most critical guest need states and occasions right now? (e.g. Are there on-going consumer grocery shortages where there is restaurant surplus?) 
  • Purchase Trends: What are they buying? (e.g. Is the demand for weekday pick-up spiking as families continue to seek meal alternatives to cooking at home?)
  • Menu Performance: What are they not buying? Any surprises? Can the menu be streamlined to improve margins?
  • Regional Stats: Where are they dining? Are certain locations seeing more business? Why?
  • Dining Room Drill-down: How do guests behave when they visit? Small or large groups? Quick weeknight meals or special occasions?
  • Sentiment Analysis: What is their sentiment following their experience? What leading indicators can you identify in guest satisfaction surveys and reviews that may be reflected in revenue during the weeks ahead? 

Digging into these questions will help identify the best high value initiatives and economic pain points to target right now. 

Reallocate resources to put new strategies in play

Reduce immediate pain points with necessary action—e.g. delay new store development, halt executive travel, and pause projects that require consultants (like Chipotle). Then, move the game forward by taking quick, decisive action. 

With a laser focus on data-driven initiatives, brands can identify quick-to-employ strategies that optimize working capital, streamline systems, and drive revenue—examples include:

  • Manage Inventory: Redistribute to-go materials and ingredients from closed/low volume locations 
  • Enable Pre-Pay: Protect cash flow by taking pre-payment on phone orders
  • Improve Throughput: Use seating analysis to optimize your table management for capacity restrictions and demand (e.g. swap four tops for two tops to reflect current party sizes and reduce turn times)
  • Streamline Traffic Flow: Plot dining room flow to determine contactless traffic patterns, then use branded visual cues to make that flow clear to guests and staff
  • Segment Guests: Monitor the behavior of key guest segments — high value guests, first time online orders, online orders by channel, weekend visitors, etc. — target initiatives to guests likely to take action
  • Optimize Campaigns: Reallocate marketing budget into the highest performing campaigns

To build a culture of continuous improvement, track results from new strategies daily and weekly—with feedback from ops, marketing, and finance (and from the front line up to the c-suite). Ensure all efforts are well-placed and well-paced to drive results.

Take inspiration from the smartest players in the game

Building an agile offense means being willing to question every assumption, including newly adopted ones. Cultivating a transformational mindset is crucial to develop the kinds of plays that seriously boost revenues and reduce costs (not by 5-10% but by 30-40%).

Wise idea: study the other team’s playbook. Adopt winning strategies from outside experts— customers, hospitality peers, and thought-leaders from other industries: 

  • Full-Court Feedback: Be proactive about guest feedback, then roll that feedback into forecasts and planning to refine what’s working (and define what needs work)
  • Innovative Plays: Seek out other restaurant leaders who defy expectations (i.e. Lazy Dog, who opened their 39th store during the pandemic)
  • Industry Transfers: Study service model crossovers (e.g. MOD Pizza’s new CFO Josh Guenser, who is taking cues from his decade at Starbucks to deploy curbside pick-up)
  • Omnichannel Comms: Look for omnichannel success stories (e.g. Taco Bell’s emphasis on data analytics, and use of simple signage, social media, and contactless initiatives to accommodate customer needs)
  • Streamlined Systems: Leverage tools that streamline, automate, and consolidate data, feedback, and analysis


Make a fast break

The rules of the game for hospitality have forever changed—brands that come out on top will reinvent how their business runs, reimagine how they use data, and draw on the knowledge and instincts of the experts on their own team and across the industry. 


Building an agile offense depends on being willing to dig in to change—and make tough calls—to quickly build stability and set the stage for future growth.


Photo Credit: Louis Hansel

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