The Innate Variability of Restaurants

Most industries have some degree of variability, especially as the world was rocked by the pandemic. No industry compares to the variability of the restaurant industry though. There are a TON of things that can change in an instant in a restaurant, for better or for worse. To combat this, management needs to find ways to measure guaranteed success, and find things that will indicate where to improve. These are called KPIs, or Key Performance Indicators. Unless a business can see where they are failing and succeeding, the doors will close and management will never know why.

One of the more hard to spot KPIs, but also one of the more important ones are Process KPIs. Seeing the efficiency of a process or way of operation in a restaurant or bar lets owners/operators know if the way things are being done is harming or hurting the business. Things like cleaning guidelines, the way inventory is counted, dining room procedures, and ordering are all things that can be observed and measured to see if it is worth continuing. If inventory counts are taking too much time and remain inaccurate, it may be time to re-evaluate the way employees take care of that. If customers complain often about the way the dining room is treated, guidelines may need to be changed. These are all indicative of the performance of the restaurant, and can be changed to increase success.

Customer Outcome KPIs have a more direct impact on not only customer experience and satisfaction, but also profits. If customer care and retention isn’t in tip-top shape, a business will quickly lose clientele and money. Things like customer retention, consistent customer experience, and customer efficiency are all Key Performance Indicators for customer outcome. Customers need to be given a reason to come back. If they’re only coming once and never again, that’s forgoing future revenue, and likely a sign that something wasn’t quite right during that customer’s trip to the restaurant and/or bar. If this is happening consistently, then customers are not having a good experience. A consistent positive customer experience is vital to any thriving restaurant. Things need to be clean, food and drinks need to be well made, servers need to be friendly and attentive, and things should be brought out to them quickly. Customers also need to be coming in and out of the doors at a good and efficient pace. They shouldn’t be there for too short of a time to the point where they aren’t ordering much, but they can’t be hogging up a table not ordering anything while other potential customers are waiting. There is a middle ground, and finding it is a good indicator for good performance. If Customer Outcome KPIs are not in order, profits won’t be either.

The final piece to the KPI puzzle is the most obvious of all, Financial KPIs. Perhaps the most important, as the Financial KPIs can provide information and answers that give a baseline of reasoning and explanation for the other KPIs. If an owner knows when and how money is flowing, they can then find out why and who is working at the time. Things like Net Profit, COGS, and Revenue per Ticket are all extremely important for understanding the Key Performance Indicators of a business. Being able to account for the business’s financial health is absolutely vital to performance and success, and these KPIs are the best way to find those answers.

“If an owner knows how and when money is flowing, they can find out why and who is working at the time”

Variability for any industry is high, especially in these financially turbulent times. But in the restaurant and bar industry, owners and operators need to keep that to an absolute minimum. Hunting down and pinpointing KPIs is essential to that, and allows new training experiences for the staff who may need help in some areas. Whether it be Financial, Customer-centered, or Process KPIs, any owner must find these and keep them in their back pocket if they have any dreams of a successful operation.

people sitting in a bar

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