If your sales have stalled when you compare year-over-year revenue numbers, you need to figure out why. Here are three possible solutions.
If you have had the same promotion running on Tuesday nights for more than 6 months, this one is for you.
“Many people are in a rut and a rut is nothing but a grave – with both ends kicked out.”
– Vance Havner
On one hand, the tradition is wonderful. But it is a double-edged sword. It might be holding you back from more profitable revenue.
Suppose you’ve been running a half-price appetizer promotion for the last two years on Wednesday nights. You picked Wednesday because it was a slow night. Since then, Wednesday has become your busiest weekday, but most of your food is now sold at half-price. Changing the promotion regularly would have allowed you to improve profitability on Wednesdays.
New Menu Items
When was the last time you added 5 new items to your menu at once?
“Not all treasure‘s silver and gold, mate.”
– Jack Sparrow, Pirates Of The Caribbean: The Curse Of The Black Pearl
One look at the success of Costco and stores like TJ Maxx and Marshalls experience should convince you that the prospect of discovery is exciting for customers. For those companies, the “treasure hunt” is one of the main reasons credited for their growth.
Regularly adding (and removing) items from your menu will maintain sense of novelty. You may even discover a new signature item that your restaurant will be known for.
Leaving ANY pricing in place too long makes it really hard to make changes. If you’ve been known for a $6 cheeseburger for the last 2 years, then a price adjustment to $6.50 will feel like a big jump for regulars. Making changes to promotions regularly makes pricing changes less obvious.
“You can determine the strength of a business over time by the amount of agony they go through in raising prices.”
– Warren Buffett
If you’re faced with an obvious jump that could cause you to lose customers, here are 2 strategies to try using our Cheeseburger as an example.
- Change the size. Make the burger larger when you raise the price. It will preserve the sense of value. Be sure to train your staff on how to communicate this.
- Make the pricing based on quantity. 2 cheeseburgers for $12 may allow you to keep some of your most price sensitive customers.