4 Things Every QSR Should Know to Increase Profitability– Part 1

Today’s restaurant consumers have changed. Not only do they perceive that restaurant prices are at their highest since Q1 2021, but they’re more price sensitive than ever and have even changed how they view menus.

These changes in customer behavior aren’t necessarily negatives for restaurant brands. In fact, they present opportunities to meet your guests where they are right now.

Here are two of the top four insights RMS believes can have the most impact on boosting quick service restaurant (QSR) profitability in 2023. For more on how QSRs can increase their profits, read part two.

Loyalty programs and coupons

For customers, the desire to eat out remains, but so does the need to manage disposable income. Loyalty programs and coupons can help bridge that gap.

Besides holding a wealth of information about current customers, loyalty programs have high adoption rates. During the pandemic, 1 in 4 guests reported signing up for at least one restaurant loyalty program. Each subsequent data point gives franchisors an opportunity to understand customers better and serve personalized rewards and offers that keep them on your platform.

For guests, coupons deliver on the promise of value, saving money and convenience; for QSR brands, they provide an opportunity to increase check (whether by suggesting add-ons or a new menu item) or even upend loyalty. RMS found that 2 in 3 guests would switch from their usual restaurant if a similar restaurant offered a coupon.

Menus and the ordering experience

QSR guests are motivated to save money. Nearly 70% “carefully” compare prices across the menu before making a choice, and 67% pre-plan, always knowing the price of their selection before ordering.

To better understand how customers experience digital menus, RMS conducted an eye-tracking menu study. The results: Only 7% of participants read a menu, while 56% scan. The adage that pictures speak louder than words was validated, with participants fixating on item images 183% more than titles and descriptions. Grouping content by category also proved to be an effective way to impact navigation. 60% viewed menus by categories and on average spent 10 seconds per category before moving on to the next one.

The eyes told us that suggestive selling is more profitable before checkout. Research found that guests were most open to suggestions as they explored the menu, with 18% of participants putting the item into their basket. Wait to offer a suggested item at checkout, and not only will the customer be annoyed, but only 2% will purchase the item.

Finally, not only should you entice customers with what is unique to your brand and more profitable for your menu, but also ensure guests physically ‘see’ the item while exploring the menu digitally. For example, RMS discovered blind spots on the left side of a menu when items were shown in a carousel-style layout. For those menus, it’s advisable to make use of the “center of gravity”, listing the most popular items with the most profitable margins in the center of the screen, which is where guests naturally rest their eyes before exploring the next item to the right.

Increase profits in 2023

Boosting profitability in the face of ongoing inflation is possible. Data-driven loyalty programs and menus are two ways to increase profits. In our next post, we’ll delve into the other top ways to engage your customers this year with specific actions around bundles and family meals, digital payments and suggestive tipping.

RMS is committed to supporting restaurant brands with practical strategies to optimize your menu profitability, sales and financial health. Reach out to us today.

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