When was the last time you visited your restaurant’s customer success metrics? Are you measuring the right set of success metrics for restaurants? And how does analyzing these metrics help you with your management?
You should know the answers to those questions. As a restaurateur, it is a must that you’re aware of the key performance indicators and metrics that affect your operations and management. If not utilized properly, it could leave a lot of loopholes in your system.
There are always two sides to the same coin. In restaurant management, it should not just be about food quality and customer experience, knowing the numbers behind your operations is what makes it go.
You’ll be at the top of your game if you’re able to monitor and manage your metrics well. And while there are plenty of restaurant key performance indicators, it’s a must that you work on the ones about customers.
After all, you own a customer-centric business. How would you know that your customers are still satisfied with your service? Reading feedback and reviews alone won’t suffice. You have to determine the metrics that will help you show accurate data about this matter.
But if you’re new to this subject, worry not as we’re here to help you. This article will discuss different customer success metrics that are essential to the success of your business. It aims to guide restaurant owners, like you, towards better planning.
Key Performance Metrics for Restaurants
Although we’ve mentioned that there are two sides to restaurant management, we didn’t mean that they are separate parts. These sides are connected and codependent with each other. A simple mistake to the other side could have drastic effects on the other.
This is where your business’ performance metrics come in. These success metrics will serve as your guide to gain a deeper insight into your entire management. You’ll be able to see what areas are doing fine, and what areas need improvement.
For you to have a better understanding of your metrics, here’s a brief overview of this topic.
What is a key performance metric?
Depending on what type of success metric you’ll be using, but these metrics hold valuable insights about your management. It can give you an objective assessment of the various aspects of your business.
A company’s success is determined by its performance metrics. To measure an organization’s success, these metrics must be selected and emphasized. Only by identifying and tracking key success factors can they be useful.
To make sure that the right questions are being asked, and that the right answers are being obtained, business metrics must also be managed diligently.
Performance metrics for restaurants were established to give you, owners, a thorough understanding of your finances such as return on investment, profit, market share, stock price, and earnings growth.
But we’ll be focusing more on the non-financial measurements such as customer satisfaction, employee satisfaction, and process excellence. But if you have a more specific area that you want to check out, then you can create your own.
Essential Factors of a Performance Metric
Every business performance metric must have the following:
- Purpose statement
- Outline of the metrics that need to be measured
- An array of units or variables being measured
- Defined measurement process
- Analysis plan
Why is it important to measure performance metrics?
Here are the main benefits of monitoring and analyzing your performance indicators for your business.
It evaluates the well-being of your business
The basic performance metrics cover the four foundations of any business: customer, staff, business process, and revenue. You’ll be able to know the status of your restaurant with the help of these success indicators.
It shows your progress
Tracking these metrics, you’ll be given data depending on the given period that you want. From there, you’ll be able to see how well your business has performed to a specific given period.
Also, you can easily determine what are the changes or adjustments that you’ve implemented to have the said results. There’s no one-size-fits-all solution for your business, but this data can serve as your guide and basis for improvement.
It allows you to take action promptly
If you’re consistently at the top of your metrics, you can easily see if some concerns or issues need immediate fixing. All the information that is necessary for you to solve the case will be given in a single click.
It establishes business patterns
You can begin to see trends in your numbers if you measure the same metrics quarter after quarter. You can use these patterns in your business in several ways. You may be able to anticipate when your slowest quarter will be and utilize that time to upgrade your system or conduct training for the entire organization.
Maybe you’ll discover that you’ve got some team members who regularly underperform or over perform on their performance metrics, and you can use this data to determine the appropriate consequences.
Customer Success Metrics for Restaurants
Customer success metrics are an indicator of the quality of your customer experiences. As a business that places a strong emphasis on customer growth, you can place your emphasis on customer-centered initiatives. Despite this, you must still measure whether your product has impacted the daily activities of the customer.
In customer success, the goal is to consistently generate revenue by creating a lifetime value for customers. Your business approach must fit the specific needs of your customer to sustain and educate them constantly. You can evaluate how successful your efforts are based on customer success metrics.
Customer Churn Rate
This is the metric that measures the percentage of your customers that discontinues their transaction or interaction with your website over some time. It could be in the form of a canceled subscription, account deactivation, non-renewal of contract, or a customer trying another supplier of the same service and products.
It’s a must that you know this customer success metric to help you identify your next course of action for customer retention.
# of customers terminating per time interval
# of customers at the beginning of the interval
Monthly Recurring Revenue
Based on your existing customer base, it gives you an idea of how much you’re making. The results can be useful for tracking customer satisfaction, especially for businesses that sell products regularly. Active customers should be differentiated from inactive customers when calculating this.
Monthly Recurring Revenue = Σ MRR
You always want to keep an eye on customer satisfaction (CSAT). These indicators might not directly relate to a customer’s success, but they are important for measuring how great your product is and its value.
Customers’ levels of satisfaction can be assessed using CSATs at key interaction times, for example, during the purchase process, during onboarding, in a support ticket process, and electronic or telephone correspondence with customer service representatives. You can also measure this through your takeaway ordering system.
CSAT% = # of positive responses / # of total responses X 100
Customer Lifetime Value
One of the metrics used by businesses to determine the value of a single customer is the customer lifetime value. By comparing the revenue value of a customer to the customer’s predicted lifetime in a business, it can predict how fast a customer will leave the company.
By using this metric, businesses can identify significant customer segments that provide the most value. Furthermore, CLV provides the majority of revenue from repeat purchases, which, if managed accordingly, can be a reliable way to grow revenue.
CLV = ARPA / Churn Rate
*ARPA = Average Revenue Per Account