How To Increase Profitability With FOH Restaurant KPIs

By: KEXY Team
January 20, 2024
News And Tips

Restaurant owners and operators can’t neglect the significance of front-of-house (FOH) operations. It represents what your customers and guests experience at your restaurant. Customers’ impressions and experiences are crucial for garnering loyalty for your business.

It focuses on your restaurant’s customers’ touch points because this is where your guests or customers order and dine. Bear in mind that FOH includes essential operations, including the host stand, waiting area, dining room, outdoor seating, bar, and restrooms.

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FOH staff in a restaurant usually includes servers, hosts, hostesses, bartenders, and general managers. In fact, FOH staff includes everyone who interacts with your customers and guests.

The question is: how to increase profitability with FOH restaurant key performance indicators (KPIs). Here are some of the best practices to analyze and manage your FOH, improve customer experience, generate higher revenues, and increase profitability.

Increasing Profitability with FOH Restaurant KPIs

It is essential to manage FOH operations effectively to increase profitability. However, this is not an easy task, primarily if you perform the tasks manually. That’s why it is crucial to develop food inventory management strategies and implement a food inventory management software or fully integrated restaurant management system to optimize your FOH operations and generate higher revenues.

Develop a Solid Plan

Put yourself in your guests’ or customers’ shoes and experience the space as customers would to create your FOH experience. We recommend walking through all paths a guest would take in your restaurant.

These include entering the restaurant, ordering at the counter, going to the restroom, and experiencing other things they see along the way. Make your customers’ experiences purposeful, enjoyable, and seamless to streamline your FOH goals.

Create a Communication Chain

Many factors determine your customers’ experience. One of the key performance indicators that you need to focus on is your FOH staff performance. Bear in mind that the performance of your FOH staff often depends on the performance of your BOH employees.

For instance, when your restaurant is out of specific ingredients, and the person in charge fails to manage inventory and forgets to inform the FOH staff, it will cause customer dissatisfaction, reducing customers’ loyalty and reduced profits. That’s why we encourage using food inventory management software to eliminate human errors.

A food inventory management system complements an effective chain of communication in your restaurant. We recommend restaurant operators structure all the formal information to streamline communication and work-related messages reach all employees.

Create standard protocols or communication structures to optimize these processes. For instance, the BOH manager must use the software system to share status reports with FOH managers and other staff involved in the operations.

Train your Employees and Hold Pre-Shift Meetings

Create a training program for your employees, including the FOH and BOH staff. Make sure all members of your team complete the training program to meet the standard level of service.

Besides, your experienced employees must also complete the training program to streamline your restaurant’s operations, the food and drink menu, customer interactions, logistical aspects, such as the POS system and food inventory management software.

In addition, we recommend holding pre-shift meetings to improve the customer experience. Gather your FOH staff before every shift and go over everything, including special menu items, VIP customers, and make strategies to address service issues.

The purpose is to encourage effective communication between your FOH and BOH employees, leading to streamlined operations and improved customer experiences. That way, you can generate higher revenues.

Invest in Food Inventory Management Software

Successful restaurant owners or operators always keep track of the reservations. When you carry out reservations management and plan for each shift, you can increase customer satisfaction levels.

Remember, improved customer satisfaction is directly proportional to increased profitability. We recommend using a cloud-based reservation system because it enables your customers to make reservations effectively and get reminders.

Many restaurants in the United States use KEXY, a cloud-based and fully integrated restaurant management system that offers a wide range of features. Implementing KEXY is the best way to get an accurate picture of your inventory and the restaurant’s performance.

Not only does KEXY allows you to manage inventory, employees performance, track sales, but it is also a sophisticated tool to boost your restaurant operations, leading to increased efficiency with servers and improved table management.

KEXY enables you to analyze data using state-of-the-art analytics to make improvements. You can use data from your POS system and KEXY to create better experiences by improving overall operations.

For instance, you can schedule more servers when data from your POS system or KEXY shows that certain days or times are busier. You can also use the data to track the performance of your employees, monitor new promotions, and identify servers that are the highest sellers.

Focus on Optimizing Your Customer Acquisition Cost

Determine your restaurant’s customer acquisition cost by dividing the marketing spend by the number of customers received every month. For instance, if you spend $10,000 per month on your marketing operations and have 5,000 new customers, your customer acquisition cost is $2.00.

Many restaurants find it challenging to find the percentage of new customers each month and determine which ones have visited your restaurant before. In addition, if you spend $10,000 on marketing per month and have 10,000 customers the same month, you will have a cost per customer of $1.00.

Restaurant owners who apply this straightforward calculation underestimate the actual cost of a new customer. However, you can overcome these problems in numerous ways. We recommend distinguishing between your existing and new customers.

You can do this by asking your customers whether this is their first time at your restaurant. Take a count, monitor the use of loyalty programs, and understand the seasonal demand. It is possible that 60% to 70% of your customers or guests may have visited the restaurant previously.

Make sure you determine this by taking sample measurements per month for at least 12 months. A decrease in your customers’ loyalty or acquisition of new customers can explain the increase or decrease of customer acquisition costs.

Focus on Customers’ Feedback

Customer feedback improves customer retention rates and increases profitability. Bear in mind that satisfied customers will stay with your business, and unhappy customers will find a better alternative to your restaurant and leave.

That’s why it is crucial to focus on customer feedback, allowing you to determine their satisfaction levels with your services and identify areas where your restaurant should improve. Google Places and Yelp have displaced Yellow Pages and become the most powerful marketing and feedback tools for businesses, including restaurants.

Word-of-mouth marketing has become more important for restaurants than other methods. Google and Yelp are a few places where word-of-mouth is prevalent. So, you can take advantage of these platforms, collect feedback, analyze patterns, and streamline operations accordingly.

Final Words

The front-of-house (FOH) is an important business area in your restaurant where your guests and customers directly experience your services. Because it creates memories and decides whether your customer should stay loyal or find an alternative to your restaurant, we recommend identifying FOH KPIs and measuring them adequately to optimize your business operations and increase ROIs.

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