Lack of suggestive selling costs thousands of dollars of profit annually
BRENTWOOD, CA, July 28, 2005—Despite the fact that restaurants do a good job of making the customer feel welcome and comfortable, most restaurants leave between $5 and $15 of revenue on each table through lack of suggestive selling, according to a recent survey completed by Mercantile Systems, a leading restaurant consulting firm based in Brentwood, California. This translates into thousands of dollars of lost profit, the survey concludes.
The recently completed national survey, conducted by approximately 700 shoppers closely matched to the consumer profiles of the restaurants they visited, found that the biggest area for improvement is beverages before or during the meal. Just 35 percent of servers suggested wine, cocktails or soft drinks, and only 10 percent recommended a specialty drink. Servers offered a refill of alcoholic beverages only slightly more than half the time. At the end of the meal, beverages fared marginally better, with 42 percent of servers suggesting coffee or an after dinner drink.
"Despite the fact that cocktails and other beverages are often the biggest profit center in the restaurant and can easily double the bill—and the tip—when ordered, restaurants just aren't capitalizing on this opportunity for profit," said Dan Cosgrove, chief executive officer of Mercantile.
Among other deficits were desserts and appetizers, with fewer than half the servers suggesting an appetizer, and a third failing to recommend dessert.
"The irony is that while there is room for improvement, restaurants are generally doing an excellent job of handling reservations, making customers feel welcome, and handling the customer's needs in a professional and timely manner," Cosgrove said. "What they're not doing well is making the most of the customers they have."
According to Cosgrove, the data demonstrate conclusively that most restaurants have plenty of room to improve profits relatively easily.
"Using an example of a restaurant with five servers per shift and an average of 25 guests for each server, if they can simply increase revenue by a dollar per guest, the restaurant will see revenues increase by over $90,000 per year," he said. "That's more than $13,000 in profits if the restaurant has a 15 percent profit margin!"
Cosgrove points out those servers stand to benefit, too. "In the example above, the server can make over $2,700 in extra tips," he said.
Staff and service were the high points of the survey's findings, according to Cosgrove. More than nine out of ten reservation calls were answered promptly and professionally, And once there, diners rated 85 percent of the servers as "warm and sincere," and said that 87 percent made good eye contact and smiled. Beverages were delivered promptly more than nine out of ten times, and two thirds of the servers checked back at the table within two minutes of delivering the entrée. Most of the time, diners found the facilities met their standards of cleanliness, as well.
"Restaurants have done much of the hard work already," Cosgrove pointed out. "They have all the ingredients necessary to be successful. The customers are willing to spend more, and in this case, it even would improve their overall experiences. The server just isn't putting the options in front of them."
Mercantile Systems, (www.mercsystem.com) based in Brentwood, California, operates a nationwide restaurant consulting business, offering services ranging from mystery shopping to bar and operational audits. The firm collects actionable data that helps restaurant management guide immediate changes for improving profits and all around satisfaction in their operation.
For this survey, the shoppers were 18-55 year old adults who were accompanied by friends or family members. The shoppers lived within a five-mile radius of the restaurants they reviewed, and filled out a 58-question survey about the environment, experience and food. Most surveys were conducted at lunch or dinner, and most of the restaurants were sit-down, full-serve formats that included a bar. Answers were collected and collated in a Web-based system.
For more information about the survey results, contact dcosgrove@mercsystem.com, or call 925-325-9247.