Revenue management plays a crucial role, especially, when it comes to managing the restaurant business effectively and successfully. Considering a room to be a perishable product, the concept highlights "Selling the right room, to the right client, at the right moment, for the right price, through the right distribution channel, with the best cost efficiency." In other words, revenue management is about attracting the right guests at the right time.
However, there are various factors that must be taken into consideration to effectively apply Revenue Management at restaurants. Some of them are as follows:
Maximizing table turnovers during a session is the best way to improve the revenues of your restaurant. Also, the pricing strategy must match with the customers' spending capacity. Internally, the management should train their team members to promote the suggestive and upselling methods. Customer retention is the key to success for any F&B business. Hence, every management should target and retain at least 90% of its customers in order to sustain their business.
Customer Segmentation and Satisfaction
Proper customer segmentation becomes vital for pricing, marketing, promotions and business planning. If there is a mismatch of customer segmentation and business planning, it might mislead business predictions subsequently, thus, leading to a loss in revenues. Delivering customer satisfaction is pivotal in any type of business nowadays. A satisfied customer becomes an ambassador for your business and a dissatisfied customer spreads the negative word around.
Data collection is the key to the evolution of your revenue management efforts. It plays an important part as getting the quality data can drive the business in the right direction especially in terms of targeting the right people for the product that you are selling. But the data should be recorded in such a way that it is easier to interpret and leads to more relevant insights such as new trends, experiments, innovations, etc., which will drive your entire revenue management approach.
Automation is the future of doing business, especially at the time where finding a skilled workforce is a challenge. In restaurants, trends are moving towards automation in terms of time-consuming tasks such as billing, ordering, feedback mechanism, accounting, inventory management, etc. To a certain extent, automation even aids in customer/guest interaction more efficiently, thereby, giving more attention to the guest needs.
Changing Consumer Trends
Customer needs and requirements are constant and inevitable, so keeping abreast with upgrades in the industry becomes the game changer in the restaurant business. Customers these days are well-travelled and exposed to the latest international trends such as the importance of turning Vegan and choosing organic and home-grown ingredients over others. And, the best way to keep a tab of customers and their changing behaviour is through various mediums such as social media, blogs, etc. Such vital information can assist in keeping up with changing consumer trends and help in important decision-making processes.