Can lowering menu prices help restaurants increase profits during the crisis?
Online & Mobile Ordering
Accept it or not, even after this pandemic is over, some lasting impacts are going to be left behind: One of them is going to be the hesitancy of people to dine-in. According to the recent survey, almost 78% of the surveyed group agreed that going out for a sit-down meal is not on their minds at the moment. Not until the vaccination is available for the masses. During unprecedented times like these, restaurants have no other option but to pivot to an online ordering and delivery model to ensure continuity.
However, merely facilitating your customers with an online ordering system is not enough. Let’s face it, the purchasing power of consumers has hit an all-time low. With job layoffs, restrictions on export and import, and other economic activities, many are anticipating their household income to continue to fall in the coming months. There is very little chance of them looking at high-priced menu items when ordering food delivery.
The only way to encourage to place food orders for delivery or takeaway is by Lowering Your Prices!
Can you afford to lower your prices?
Why not! Apart from the rentals and a few overhead charges like salaries and equipment, inventory, and delivery commissions, you really aren’t left with the hassle of maintaining the restaurant ambiance, parking area, etc. Most restaurants have also laid off waiters and servers in anticipation that their dine-in facility will be closed for a very long time.
Practically, 80% of the restaurants worldwide are running like a Cloud Kitchen at the moment, and so are you!. Since you’re removing table servicing out of the equation, cutting costs on front-of-house activities, and concentrating on just delivering quality food, you’ll save a huge amount of money on operations. So even if you lower your menu prices, you’ll still be enjoying better profit margins.
But remember that at some point in time, once the crisis is over, the business will go back to normal. So while slashing the prices, restaurant owners must clearly communicate to the customers that the reinforced discount is only a unique occurrence. Promoting them as a special offer will ensure that your customers understand the economics behind the action.
So how much discount should you give off the menu?
According to experts, anything between 15% and 20% works like magic for the food industry. Anything less than 15% is not motivating enough for new generation buyers, and anything above 20% can be alerting for customers.
How lowering menu prices will benefit your business?
With competitive rates, you can:
Attract new customers who usually opt for lower-priced restaurants. People these days are not ready to pay for fancy food. Comfort food at reasonable prices is doing better than in-vogue entrees and salads. Offering home substitute meals would be more profitable in the current economic environment.
Convert occasional visitors into frequent buyers. People who usually dine at your restaurants would be encouraged to order frequently from your restaurant to enjoy the same culinary experience at discounted rates. 15% off their favorite menu item is definitely going to tempt them to order delivery or takeout.
Land bulk orders for family gatherings and special events. With an effective marketing strategy, you should be able to capture large orders, especially on weekends and special occasions.
People prefer to dine at restaurants because of their specific atmosphere, helpful service, sparkling cutlery, cleanliness, and the majestic experience they offer. While each restaurant takes different measures to ensure their customers get a good experience, online ordering takes that away completely. When there is only food people are getting, there's only food people expect to pay for. By lowering your prices, you can build trust among your customers that you charge for what you give. Flaunting this a little as a part of your new approach will not be a bad idea, after all!
Just in case you don’t have an online system, we have also rounded up some of the reasons why you should have one:
Get more orders from workplaces. The people who are back in their offices want their orders placed and delivered quickly, not having the time and patience for a phone call. Resultantly, many professionals prefer online ordering over telephonic placements. Especially now, more than ever, the people who went out previously to enjoy their breaks are turning to deliveries, and it would be foolish not to make the most out of it.
Get direct money. According to a report, 70 percent of the people want their money to benefit the restaurants directly, which lies in your best interests as well. Having your own online ordering system means you get the revenues with no third-party cuts.
Facilitate the home-isolated. For the people forced into isolation due to the pandemic, home-delivery is the only option. Even for those who are permitted to go out, social-distancing measures are necessary, and a quick pick-up is all they want Taking the current situation into consideration, a small endeavor towards technology by setting up an online ordering system for your restaurant will help you bring in more customers.
No loss of orders. With the business already dwindling, you do not want any order to be lost just because you were too late to answer the phone or wasn’t able to answer it at all. With an online system, you don’t need to be vigilant about the phone-ring. Every person who comes to make a purchase goes away with a purchase