Average Spend
How often do you track average spend per person?
If you serve 1000 diners per week, and you can increase the average spend by just $2, then you would grow revenue by over $100k per year.
If spend per person decreases by $2, you'll lose $100k a year in revenue. Ouch.
Given its importance, we recommend you track average spend monthly and set KPIs.
So how can you increase it?
TLDR: Ask your customers if they want more stuff
Long version: Involves maths, see below:
A restaurant wants to increase average spend by $2pp.
They create an upsell item which is valued at $20pp.
(2 / 20) x 100 = 10%
This only needs to work 10% of the time to achieve KPI.
or
They create an upsell item which is valued at $25pp.
(2 / 25) x 100 = 8%
This only needs to work 8% of the time to achieve KPI.
Takeaway #1
The greater the value of the upsell, the less frequently it needs to work.
What happens with multiple upsell opportunities?
The same restaurant creates 2 upsell opportunities. Both are $20pp. The goal is still to increase average spend by $2pp.
(2 / (20 + 20)) x 100 = 5%
Each upsell now only needs to work 5% of the time on average to achieve the same result.
Takeaway #2
The more upsells you have, the less often they need to work.
Take this to the natural extreme, with 10 upsell opportunities, with an average of $20 per upsell.
(2 / (10 x 20)) x 100 = 1%
In this scenario, each upsell would only need to work 1% of the time, on average, to achieve an overall $2pp increase.
