Restaurant increases revenues by 20 percent during pandemic.
Nick Moon, owner of Melbourne Seafood Station, opened his 4th location about 6 months before the pandemic.. Today, he has increased revenues by over 20 percent doing 5 simple things.
Nick Moon, owner of Melbourne Seafood Station, opened his 4th location about 6 months before the pandemic.
Today, he has increased revenues by over 20% by doing 5 simple things:
Menu adjustments with a focus on value
Transition customers from 3rd party to self-delivery/pick up
Implementing a strong loyalty program
Taking pre-orders to increase capacity during peak times
Creating a consistent social media program
He tells you exactly how he did it in this video interview.
Plus, he started using Numa, an AI based platform that answers your phone and converts calls to orders. Numa was featured on an EASY+RETAIL+TECH podcast you can listen to here.
Angel: We have got a great story to tell you today. You hear a lot of bad news during COVID, but today we feature a really good story about a business that is exceeding revenues from its pre-COVID days. Today we welcome the owner of that business, Nick Moon. Nick is the owner of Melbourne Seafood Station. He has four restaurants, but we're going to talk about one, the most recent one that he opened, which is in the Orlando, Florida area, correct, Nick.
Nick: Yes. In Hunter's Creek neighborhood of Orlando, Florida.
Angel: And this restaurant only opened in September of 2019. And by March, 2020, boom, the axe came down with Covid, correct?
Nick: It did, it really kind of kicked us in the gut.
Angel: Tell everybody a little bit about what you serve at Melbourne seafood station. And I want to add, the other three restaurants have been wildly successful.
Nick: Absolutely. We are a fast casual seafood restaurant. We focus on seafood boils. So it's primarily shellfish, shrimp, lobster, crab, scallops, oysters, mussels, clams, that kind of thing. We also do fish and chicken as well.
Angel: And it is fast casual, but it's a little pricey, correct?
Nick: Compared to a hamburger, it's going to be a little bit more expensive, but if you're comparing us to Red Lobster or another seafood restaurant, it's a really good value.
Angel: Fantastic. So you opened up in September and then the Covid lockdown came and you were not prepared. Everybody was unprepared, but you were so new and you hadn't done this in any of your restaurants. You didn't even have delivery or online menus or any of that kind of thing set up yet, right?
Nick: No, we definitely didn't have any delivery setup or any online menus. It was just people walking in and people calling in.
Angel: And so how long before you set up delivery and how did you do it?
Nick: Immediately we started repurposing employees as delivery drivers and we signed up with GrubHub to handle deliveries for us.
Angel: This is when you and I started working together and you did one thing very early on that has made a tremendous difference in your business. What was that?
Nick: We did a $29 family meal that included two pounds of shrimp. And they could get either rice or pasta, plus corn on the cob or broccoli. And that fed four people, and it was an extremely successful promotion.
Angel: And I want to make sure that everybody understands that was still a profitable deal.
Nick: Yeah. So it was about a 50% food cost for us.
Angel: Fantastic. And you're used to high food costs in what you do anyway, so you pivoted immediately to provide that value. Then the next thing that we did, which I loved was the idea of delivery. I'm glad that GrubHub was delivering, but I don't want to use them if I don't have to. So tell everybody what you did then.
Nick: We added promotional cards to each delivery package to promote our own delivery.
Angel: So you put a card in with each order that went out through GrubHub.
Nick: Right. All orders that went out or were pickup included a promotion card, letting customers know that we deliver as well.
Angel: And did you offer a discount for that first one?
Nick: We offered $5 off their first store delivery order.
Angel: So inside of the GrubHub delivery order, you put a coupon for $5 off if they ordered directly through you. And I don't know if you know the percentage, but what kind of response did you see?
Nick: It was strong. Once the dining rooms were reopened again, then we saw the delivery kind of fall off. But during delivery we definitely saw an increase in store delivery - maybe about 50% more than we were doing before we offered the discount.
Angel: And then over the course of time, you kept adjusting and updating those family meals.
Nick: We did. Initially there was only one option, which was shrimp and the two side options. And then, we offered it with salmon, cod or chicken. So we had four different options for the family meal for the $29 price.
Angel: And did you see what percentage of sales did that family meal end up making of your total revenue?
Nick: Across all four restaurants, it was about 30% of our revenue.
Angel: Wow. That's a lot, people really did gravitate towards that, didn't they?
Nick: They did. So we actually added it to the menu now. Now it's something that's on our offerings permanently and it still accounts for 10 to 15% of our sales.
Angel: When you opened for dine-in, your delivery business stayed strong, correct?
Nick: The takeout stayed strong, the delivery kind of fell off a little bit.
Angel: So as we sit here today in August, what's your percentage delivery versus dine in?
Nick: Dine-In is going to be about 40% and delivery is about 10%.
Angel: Excuse me. That’s dine-in and delivery versus takeout?
Nick: About 50% right now.
Angel: Wow. That's huge. Another thing that you did during all of this craziness is you implemented a loyalty program.
Nick: We did. And I think when I ask our employees, “what's the number one thing you think that's working right now,” that's what they say; the loyalty program. They say the customers are just loving it.
Angel: Tell us a little bit about what your benefits are and what people have to do.
Nick: Just for signing up, they get a $10 reward in the mail. It takes about two weeks for them to get that, but it’s a hook. “Hey, sign up for this. You're going to get $10 off your next meal.” They also get a point for every dollar that they spend. Every 200 points they receive a $10 reward. They also get a birthday coupon for $10 and a free entree on their anniversary.
Angel: And you offer double points on Tuesday.
Nick: Yes. We wanted to see if we could increase business during the week. We decided to just do it on Tuesday, which was one of the slower days and it really works.
Angel: Do you have any numbers for us on that promotion, in terms of increase?
Nick: Yes. It's been about 20 to 30% increase since we started doing that.
Angel: That is really big. Now most of your business is weekend business, correct?
Nick: Yeah. Friday, Saturday and Sunday accounts for two thirds of our business.
Angel: So you created a preorder system and rewarded customers for ordering. Tell us about that.
Nick: When we knew we were going to be really busy on mother's day and father's day and a couple other times we implemented a $5 coupon toward their next purchase if they pre-ordered by the day before. And that really helped out. We had almost so many preorders that we weren't taking new orders.
Angel: That's amazing. And your mother's day was absolutely stellar, correct?
Nick: Across all of our locations. It was phenomenal.
Angel: Isn't that amazing in the middle of all of this, the best ever. And your mother's day offering was the family meal with some additional things, correct?
Nick: We offered a, it was a whole lobster with scallops shrimp and it was, I think it was $30 or something like that for mom, it was a really good value.
Angel: I want to make sure everybody knows that during this time seafood prices were going down. So you weren't losing money on any of these things that you were making money.
Nick: That's one of the things that I’ve found has been the biggest savior is finding a good value item, like a lobster or something that people are really going to draw their attention in and then coming up with a great special, and then promoting the heck out of it on social media.
Angel: Let's talk about promotion. Because I know that wasn't your favorite thing to do when we first met, you've been more aggressive on social media. Tell us about some of the things that you've done that have worked for you.
Nick: The biggest thing is taking like a really appetizing picture and then promoting it through Facebook ads and boosting posts. We didn't do that consistently before, so we've been adding more money, at least a hundred dollars per post. And we've seen the revenue really take off from that. I believe it's because people are on their phones a lot with Covid, they are trying to get updates and they're just, they have more time to do that. So that's really the best way to reach them.
Angel: That's fantastic. So you are a new restaurant that's not doing as well as it could be. Covid hits, you implement five or six key things like menu items, loyalty program, marketing, value oriented deals. And why don't you tell everybody the upshot where your revenues are right now?
Nick: So right now our revenues for the last three months have been up 20% from where they were prior to Covid.
Angel: If anybody says you can't be making money during this time, what do you tell them, Nick?
Nick: You have to try. You have to try as many things as you can and find something that works and then stick to it and then find the next thing that works. But you can't just sit back and do nothing.
Angel: So I want everybody to understand Nick implemented quickly. He took new ideas and he executed quickly and well. It didn't really take you that much time, right? It didn't cost you any money.
Nick: No, no it didn't.
Angel: So it can be done. One of the things I want to talk to you about is a company called Numa, which I did a podcast on. And I happened to mention to you early on, and you actually went in and order their service. So why don't you tell us a little about how that works and what results you've seen?
Nick: Well, it's taken about two weeks to implement it. Because we do have four locations. We had to install it at four locations, train everybody and get it set up. But it gets to the phone requests that you can't get to. So in the busy periods, you're going to have a customer on the phone that you're trying to take an order for, another customer on hold and then other people trying to call in. And Numa takes on everybody, leaving the customer that's either in front of you placing the order or the one that you're on the phone with by answering the phone for those other customers. And it uses an AI technology that response to the basic converts to call into a text message where it can answer the customer's basic questions, as far as what time you're open, where to find the menu, those kinds of things you can prerecord responses to. And then if they want to order, it gives them a link to put their order in. Customers can even pay for their order on the system.
Angel: We're going to have to circle back with you in a couple of months to see the effectiveness of it. Because I think it's going to help a great deal.
Nick: It is. Just this Saturday we saw 20% of orders going through Numa.
Angel: Wow that is amazing. Great job. Great job. So we are definitely going to come back in six months from now, Nick, and we're going to hope that you have doubled business everywhere, particularly Orlando.
Any plans for the next new thing, between now and the end of the year? Because things are not going to change so quickly. So anything you've got on your mind?
Nick: We're just going to try to come up with as many creative marketing and advertising campaigns as we can address providing value for people, letting customers know that, hey, we're in this with you. We're not trying to make a fortune right now. We're just trying to get people good food at a reasonable cost.
Can social media really produce results for a small business? A case study.
Can social media really produce results for a small business? Here’s a case study that says resoundingly, “Yes!”
Can social media really produce results for a small business? Here’s a case study that says resoundingly, “Yes!”
A struggling cupcake store had paltry 398 followers on Facebook after three years in business. To boost fans and engagement we developed a three-prong Facebook strategy:
1. Regular postings of products (photos of yummy looking cupcakes, cookies, coffee, tea, and specials) and promotion of newly-created birthday party packages for kids.
2. Development and promotion of cupcake decorating classes. Posts generated interest thanks to photos of the irresistible final product attendees would be creating in class. After the class, we posted photos of attendees enjoying the experience.
3. Creation of a Test Kitchen concept. The owners of this business are a husband and wife team. The husband loves being in the kitchen and creating new baked delicacies. We used that passion as their brand differentiator to create the Test Kitchen. The concept was simply that twice each month the husband would go into the kitchen and create something new. They would post pictures of him in the kitchen, covered with flour or elbow deep in batter to provoke curiosity. The following day, Thursday, was Test Kitchen day. Anyone who visited the store would be given a free Test Kitchen card (10 Test Kitchen visits got you a $5 gift certificate. Emails were required to receive the card, shoring up their database) and a free sample of the new concoction. Visitors were then asked to rate the new product as a Flip (Flip your lid over it) or a Flop. The owners posted the results on Friday. They were totally honest about customer reaction – even if it wasn’t great. It was totally authentic and people loved it!
Results over the course of just 30 days:
1. They posted a coconut macaroon special that was seen by someone who ordered 8000 coconut cookies – a huge order for a store that size.
2. Follower base grew from 398 to 600 (within months it grew to 1250).
3. Engagement from fans grew as high as over 100 likes for certain posts.
4. They began booking birthday parties, posting photos and “mom” testimonials which generated even more bookings.
5. Decorating classes began filling to capacity, adding yet another revenue stream and creating a whole new loyal fan base.
Total cost: $0
How properly analyzing metrics helped improve business
CASE STUDIES
How properly analyzing metrics helped improve business
New client vs. repeat clients
A beauty salon client did not track their new vs. existing clients or client retention KPI. Once they began tracking and analyzing their numbers, it was clear they were getting plenty of new clients, they just weren’t retaining them. By understanding they had a client retention issue, we were able to implement a two-fold strategy that included customer service training for the stylists to insure greater satisfaction as well as a new customer welcome program that offered new clients discounts for pre-booking their next appointment.
Sales by employee
One clothing store’s sales had been steadily declining over a year’s time. The owner was frequently absent and left the store in the hands of her manager who was also the primary salesperson. In researching the sales decline, she pulled the sales-by-employee report. Her manager’s sales had gone down 47 percent year-over-year! Frighteningly, the owner didn’t know this. Clearly the manager had become complacent and lost interest. The owner was able to fix the situation by better motivating and training her manager, giving her goals and incentives to sell more and keeping a closer eye on her. The manager’s sales rose 25 percent in just 90 days.
Sales by category
A pancake house offered an extensive breakfast menu. They knew that pancakes were, by far, their most profitable item; meats generated the least profit. They had never pulled an itemized sales report and upon doing so, made an amazing discovery. Guess what they sold least? Pancakes! The most? Meats! That made it easy for us to create pancake-focused promotions and samplings. We also raised prices on sides of bacon, sausage and ham to keep in line with escalating costs. In no time at all, pancake sales were soaring – as was net profitability.
A clothing store’s sales declined by over 40 percent. The owner had never pulled a sales- by- category report and when she did, it revealed most of the decline was in sales of dresses. It was like a lightning bolt hit! She had dropped two dress lines the previous quarter and never checked to see how that impacted her sales.
Sales by time of day and day of week
A pizza restaurant was offering a daily lunch discount on weekdays. Upon analyzing the numbers, we found that Thursday and Friday lunches were triple the volume of Monday through Wednesday. There was no need to offer the discount on those days. By eliminating discounts on Thursday and Friday, sales stayed the same but the owner realized increased profitability.
A clothing store, upon tracking sales by time of day, realized the restaurant next door was throwing off great after-dinner traffic. They began opening later to avoid labor costs during virtually non-productive morning hours and staying open later to benefit from restaurant traffic. Sales, of course, went up.
By knowing exactly what and when you’re selling – or not selling – you can create strategies to improve business during non-peak times, know when to run promotions and when to schedule employees – resulting in better service, better profitability and potentially decreased labor costs.
Until next time remember,
You can do this!
Retail sales is just that, sales! Your employees aren’t paid to simply check people out or stock the shelves. Their job is to sell! Same for restaurant servers. So, it’s important to monitor their sales performance.
Three ways to measure employee performance
Retail sales is just that, sales! Your employees aren’t paid to simply check people out or stock the shelves. Their job is to sell! Same for restaurant servers. So, it’s important to monitor their sales performance.
There’s a bit of controversy about measuring sales by employee. How to you fairly track part time vs. full time and compare with those who work prime shifts vs. off peak times? The point is to benchmark each employee and monitor performance on a regular basis, even if you’re only comparing against themselves.
There are 3 ways to do this effectively. Use the method that best works for your business.
Sales by employee
Average sale by employee
Sales by employee per hour
Start by tracking total sales per employee. Look for dips and peaks in performance and by month-to-month comparisons. But to really drill deep and have an effective comparison, track the following.
Average sale by employee
To calculate, simply divide the total sales for an employee by the total number of transactions. So, for example, if John sold $4000 in merchandise for the week with a total number of transactions of 150, his average sale would be $26.26. We’ll put this into context in a bit.
Sales by hour
Just divide the total number of sales by the total numbers of hours worked. Using $4000 per week in sales and divided by 40 hours, the sales per hour are $100.
So, let’s look at how this might help in a business. Let’s say there are 3 employees, A full time manager and 2-part timers and here are their weekly sales analysis.
Weekly Manager Part timer # 1 Part timer #2
Total Sales $4,000 $2,500 $1,000
Average sale $26.66 $16.66 $12.50
Avg. sales per hour $100 $125 $66.66
Here’s what we learned from this analysis.
Part timer #1, who works 20 hours per week, had a higher average sale per hour than the manager, although at $16.66, his average sale was substantially lower than the manager’s $26.66. These figures tell us that part-timer #1 is most likely an attentive salesperson but not as good as the manager at upselling. With some training, we can help him increase his average sale.
It’s not unusual that a manager’s sales metrics is not as high as a good salesperson working prime shifts because often, managers are distracted by administrative or other management tasks.
Finally, let’s talk about Part timer # 2’s stats. She works on Saturday and Sunday, one peak and one-off peak day. Nonetheless her sales do not stack up to her colleague’s and she needs training to improve these numbers or be replaced.
No matter which benchmark you use the important thing to remember is to track and monitor so you can see if someone’s performance is improving, staying the same or declining. If there isn’t regular improvement, you’ll want to intervene with additional training or, if warranted, replacement.
Until next time remember,
You can do this!