At the heart of any successful restaurant operation is a set of regularly tracked metrics, or KPIs. Created in close collaboration with the Institute of Hospitality, Planday’s Restaurant KPI Health Check is a useful tool to have.
Restaurant managers are often pulled in many directions, with their attention divided between a range of different departments including staff management, revenue operations, marketing and customer relations. How do you choose which KPIs to focus on?
While everything may feel like a priority and finding the right areas to focus on can feel overwhelming, it’s important to identify the right goals to track periodically. With KPIs, you can quickly identify any problems in the way you’re running your restaurant and act accordingly, or spend time on nurturing the areas in which you’re doing well.
Social media and marketing KPIs
In an age where review site ratings and social media can make or break a business, it’s crucial to monitor them effectively and to have a strategy that brings all of your marketing together. For example, if your website is not well optimized and customers have a hard time finding what they’re looking for, such as opening times, address or the menu, it won’t take much for them to leave the site and look for other options.
KPIs in this area include:
- Social media goals such as number of engagements with a post
- Website KPIs such as bounce rate, page dwell time or organic SEO ranking
- Average review scores on sites such as Tripadvisor, Zomato and Yelp
People and profitability KPIs
Any restaurant is only as good as it’s people, including both the management and staff. Since labour costs tend to be among the highest costs in any establishment, it’s important to have an idea about how productive your staff are and how much sales they bring in. Similarly, it’s very important to ensure that employees are engaged and happy at work, as high employee turnover impacts productivity and the bottom line.
Here are some of the KPIs in this area:
- Labour Cost Percentage shows how much is spent on labour as a percentage of revenue
- Sales Per Employee Per Hour looks at how much revenue each employee generates
- Employee Turnover goes into how often staff leave within a set period of time
Kitchen and management KPIs
The key to good kitchen management is finding a balance between providing great value to the customers, while keeping the cost down. This includes reducing waste, optimising the menu and reducing waste to keep down food costs.
Here are some of the KPIs to keep an eye on:
- Gross profit margin is a key profitability metric to know whether you’re staying profitable
- Menu item profitability helps with setting a strong pricing strategy
- Waste can be a high deterrent for growth as it can quickly add up
Customer service KPIs
Customer satisfaction should be at the top of any restaurant manager’s list, whether they run a Michelin star eatery or a small restaurant. Customers vote with their wallet, and to keep them coming back, smiling and efficient staff is essential to encourage return visits.
Key metrics to consider are:
- Average table occupancy tells you how many customers on average have visited your restaurant during a particular period of time
- Spend per head highlights the average spend per customer
- Customer loyalty reaps rewards in the long term
Does your restaurant pass the test?
Want to find out how well your restaurant is doing? Take Planday’s Restaurant KPI Health Check test. Created in close collaboration with the Institute of Hospitality, the checklist covers all of the essential KPI areas and helps you understand your strengths and areas for improvement.