These 5 most crucial restaurant performance metrics will help you track your results and boost your restaurant revenue. Find out how in this post.
Most crucial restaurant performance metrics and how to measure and improve them
1 – NPS Score
NPS stands for the Net Promoter Score. Net Promoter Score is a metric that shows how likely it is a customer will recommend your restaurant to the others. NPS is a relatively new metric, but it gained a lot of popularity and is nowadays one of the most crucial metrics in business. According to Nielsen, over 83% of people trust recommendations from their family and friends. One the other hand, when people had a bad experience, they are likely to share it with 3x more people.
How to measure the NPS score?
You can measure the NPS by asking your customers how likely they are to recommend your restaurant to the others on a scale from 1 to 5 (or from 1 to 10). Then you need to translate the data into a score or percentage. The higher the percentage (or score), the better.
To measure the NPS, you need to collect customer feedback. You can do it by either providing your clients with a tablet/device to rate their experience after dining, changing to a feedback-focused restaurant payment device like TableYeti or sending them an email in case they have booked a table online, and you have permission to send them emails.
How to improve your restaurant NPS score?
There is no easy answer to this question, however, you can start improving your restaurant NPS score by trying to identify the reasons why it’s not so high in the first place. If you’re using a system to collect feedback, try to add a custom field, where people can write their suggestions or recommendations. Another way to identify the reason for a low restaurant NPS score is by adding questions related to certain aspects of the restaurant. You can ask your customers to rate the service, value, ambience and food quality, so that you can identify which of them is likely to drive your overall NPS score down.
2 – Table turn time
Long table turn time can affect your business dramatically. Why? A table turn time is a time that passes from the moment your guest arrives to the moment they leave. The logic is simple: the faster your table turn time, the more customers you can serve and the more revenue you generate. Unless you’re a fine dining restaurant that only has one sitting and only serve customers by reservations, you would want your venue to have shorter table turn time.
How to measure table turn time?
The easiest way to measure table turn time is via your restaurant POS – most of the restaurant POS allow you to measure this metric. However, if for some reason, you need to calculate table turnover time manually, you need to count the number of tables served within a period of time and divide it by the number of tables that were occupied. Alternatively, you could make notes, how long did each table stay and calculate the average (per day or per week).
How to improve table turn time?
There are a few things that influence table turn times, from how long it takes to bring a menu to the customer, how long it takes to cook the dish to how long it takes to settle the bill. If you want to improve your table turn times, try to optimise all stages of the process. Leaving menus of the tables will speed up the ordering time and hiring extra kitchen staff at peak times will speed up the cooking time. Moreover, having a very efficient bill splitting system will drastically speed up the payment process for the groups of 3 and more. TableYeti’s new restaurant payment device lets you guests split their bill with ease and makes payment process way easier and faster.
3 – Customer retention rate
Customer retention rate means the percentage of customers that return to your restaurant. Another similar metric you can track is the average visits per customer in a month/year. The customers who return often are your most loyal customers, who are likely to recommend your place to their family, friends and even colleagues and share their love on Social Media.
How to measure customer retention rate?
Simply divide the total number of visits by the number of customers you had if you have this data available to you. If you have a loyalty program or a QR code customers need to scan, you can also use this data for your calculation.
How to improve restaurant retention rate?
Sometimes you can’t influence customers’ attitude – an affection towards a place is often unpredictable; however, what you can affect is providing an incentive good enough for a customer to return. Think of a great loyalty program that would reward your frequent customers by giving them a discount or a free starter/drink.
You can join an external loyalty program (e.g. Embargo is an excellent option) or start your own. To start your own loyalty scheme, you need to collect customer emails (don’t forget about GDPR). One of the ways to grow your restaurant email list is by having a table booking service on your website. Another great idea is by switching to e-receipts, where customers can also opt-in for Marketing communication from your restaurant. If you’re interested in changing to e-receipts, we at TableYeti can help you: our restaurant card machine can do this and more!
4 – Revenue per seat hour
Another relatively new but undoubtedly handy metric is the revenue per seat hour. It takes into account the number of hours the restaurant is open, the number of available seats and the revenue the restaurant generates.
How to measure revenue per seat hour?
First, you need to calculate how many seat hours you have available. If a restaurant has 30 seats is open from 12 pm to 3 pm and from 6 pm to 10 pm, it has 210 seat hours. Then, you need to divide your daily revenue on the number of seat hours, and you’ll get revenue per seat hour – or basically, how much revenue does each seat generate per hour.
How to improve revenue per seat hour?
The higher is the revenue per seat hour, the better. You can improve the revenue per seat hour either by introducing dynamic pricing (e.g. reduce prices or add offers during the off-peak times, when you have very few customers to attract more clients and increase menu prices during the busiest times). Many restaurants have separate menus for lunch and dinner (dinner menus are always more expensive). Another way to improve the revenue per seat hour is by improving the table turn times and make people dine faster by limiting the time they can spend at a restaurant to 1.5 – 2 hours or by following our advice from the step 2 in this post.
5 – Seating layout efficiency
And the last, but not least of the most important restaurant performance metrics or restaurant KPIs is the seating layout efficiency. It might be very obvious, but it’s often overlooked that the restaurant layout can hugely affect the performance of the restaurant.
How to measure seating efficiency at a restaurant?
To measure seating efficiency, divide the number of occupied seats by the number of total seats you have at your restaurant at a selected time. If your number is too low, it means that you have more tables of 4 and 6 people than you probably need.
How to improve the seating layout efficiency?
To improve the seating layout efficiency, you can introduce sharing tables or purchase more tables for two, which if the necessity arises, you can put together and create tables for larger groups. Creating seats at the bar also helps to improve seating efficiency and accommodate customers, who came to dine on their own as well as groups of three.
We hope that these crucial restaurant performance metrics will help you better track the efficiency of your restaurant. You can also contact us if you want to discuss the possibility of installing TableYeti at your restaurant (TableYeti is the restaurant card machine from the future, just 10x better).
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