How to use your POS reports wisely: Part 2

Are you a data junkie? If not, you’re not alone.  Some restaurant owners love to delve into their restaurant POS reports to analyze every aspect of their business, and Restaurant Manager POS lets you do that. But if you’re like a lot of restaurateurs, you want high level answers at a glance. That’s why we’ve put together some easy tips for using your restaurant POS reports to make better business decisions.

In part 1 of our series we talked about using POS reports to cut fraud and loss. Part two offers some less obvious uses for reports- how can reports help you improve service and customer satisfaction, change your menu to be more profitable, and take control of gains or losses in sales.

Using POS reports and alerts to improve customer service

Restaurant Manager POS offers reports that give you visibility into service times.  If you are concerned about table turns or speed of service, the first step is to find out how long it takes to complete a customer transaction. Quick service restaurants can use the check duration report to see how fast orders are processed from start to settlement. Table service restaurants can do the same using a report that shows how long it takes from the time a table is seated to when that table’s check is settled.

Once you know what your service times are, the next step is to identify problems that may be dragging down the average. Filter the report by server, day, time, or menu item, to zero in on the cause of service delays. Do you have a slow server or cashier who isn’t promptly serving customers? A menu item that takes too long to prepare? A staffing problem during rush periods that causes service delays? Comparing the average transaction time on the filtered reports to the unfiltered report can help you find the problem.

In addition to filtering the report to look at different possible contributing factors, table service restaurants can also look at each piece of the server/customer interaction to find where delays occur. Run reports to see how long it takes from the time a customer is seated to the time items are added to the check to find out if servers are getting to tables fast enough and if there is a possible communication problem between the hostess and the wait staff.  If those times are appropriate you can also look at the time from when items are added to the check to when the check is printed or the time from when the check is printed to when it is settled.  To ensure service time goals are met, you can use RM alerts that notify you when any of these pieces of the transaction take longer than expected. Alerts when a check has been printed but not settled can also help you prevent walk outs.

Using POS reports for menu engineering

Do you know which of your menu items are most popular? How about which are most profitable? Menu engineering reports like US Foods’ proprietary Menu Profit Builder Pro Software offer an easy to read graphical representation of the intersection between popularity and profitability. This report is based on the widely used Boston Consulting Group Matrix. It separates items into four quadrants- Stars, Puzzles, Dogs, and Plow Horses. These reports are powerful and easy to read but what should you do with the information once you have it?

Stars- Stars are popular and profitable. These are great items to recommend to new guests- they’ll like it and you’ll make money. If you’re trying to increase traffic by offering a promotion, these are good item to use. They are popular enough to draw people in and profitable enough that you can afford to take a short term hit on their margins. If you get customers to try these items once by offering a discount, you can feel pretty confident they will be back to buy it at full price.

Dogs- Dogs are items you should seriously consider dropping from your menu, they are neither profitable nor popular. There’s no sense in investing in making them more popular because you don’t make good margins on them anyway.

Puzzles- These items are profitable but not popular. This is where to invest your promotion power. Convince people to try these and increase their popularity so they become stars, not dogs. Make these your daily special, promote them on your menu boards or customer display, or offer them as free incentive to loyalty club members.

Plow horses- Are popular but not the most profitable items on your menu. These are crowd pleasers. You can’t stop offering them, so what should you do? Use these items to increase the popularity of more profitable items (like your puzzles). For example if your margarita’s are plow horses and your nachos are puzzles- run a coupon for a dollar off margarita’s (which you know people want) when you order nachos (which make you good margins). In other words, leverage your plow horses through bundled discounts to help increase the popularity of your more profitable menu items.

Menu Cover Depot offers more tips on how to use this information to optimize your menu here.

Using POS reports to understand changes in sales

It’s easy to see that sales have gone up (or down) but to really take control of changes in sales you need to know what is driving that change. Once you see sales are up from last year (or last week depending on what you like to compare) your POS reports can offer more visibility into the reason for the increase.  Compare number of transactions to determine if sales are up because of increased traffic. If transactions are up look at coupon redemption rates and service times to see if recent promotions or more efficient service were major contributors to better performance. If number of transactions are not up as much as sales, look at average checks. Maybe you’ve had the same number of customers but they are buying more. If so, the next step is to look at item sales and see what they are buying more of.  Did you recently create a prompt to encourage cashiers to suggest a dessert? – Look at sales in the dessert menu group to see if they are up in conjunction with overall sales. Another reason for increased average checks could be that you successfully raised the price of an item. If you raised the price of one of your plow horses, for example, you could have increased the profitability of the item without hurting the popularity.

There are many possibilities and reports alone can’t tell you everything. Your business insight and intuition will tell you where to look but reports can confirm your suspicions or encourage you to investigate further. Data can provide the missing piece of the puzzle. Once you know why sales are up or down you can make the right choices to either keep that change going or fix the problem. If sales are down because traffic is down then advertising to bring in more customers will help but if traffic and transactions are stable or up whiles sales are decreasing you know to focus your efforts on average spend with upsell prompts, premium menu items or combo offers.

Part 3 of our series which will focus on using data for marketing.

Author: Remigijus Pavydis