Many of us will have been taking a well-earned rest over the last few weeks throughout August.
Across the world, many countries have been experiencing record temperatures throughout August and, at times, it’s felt waaaay too hot for me. Luckily, August is often pretty quiet in our household as fewer people are around and I can rest up a little bit.
However, in some sectors of business, August is the busiest time of year - hospitality in particular.
Mrs Rozelle and I took off for a few days to the beautiful fishing village of Sandsend in the very north of North Yorkshire.
We’ve been coming to this part of the British coastline for the last 10 years; it has a beautiful sandy beach, fantastic surf and a number of great restaurants - 1 of which serves an amazing “full English“ breakfast
On one sunny morning, we made for our favourite (the Wits End Cafe) with me relishing some sausage and crispy bacon and lashings of brown sauce.
Sandsend gets very busy this time of year and so we arrived a few minutes after opening time to ensure we got a seat with an uninterrupted view of the beach.
So, anyway, we sat down and waited for the owner to come and take our order but I couldn’t see my usual breakfast on the menu.
When I asked, the owner said the cafe became so busy during August when it seems the entire world descends upon Sandsend to enjoy the last of the summer holidays, that they couldn’t cope with the demand and served a reduced menu instead.
It got me thinking that this is an owner that really cares about her business' reputation and has adapted to the changing market conditions whilst the August madness is in full swing.
By offering a reduced menu, the business simplifies its operations, reduces its input costs and cuts down on waste. It also maximises its capacity to serve, keeps turnover high and ensures that customer service levels are maintained.
The cafe's takeaway service is operated by a dedicated member of staff and is a lesson in takeaway efficiency, serving long queues of people (an additional customer segment) that would not otherwise have been able to be served and so the cafe's revenues increased substantially
Changing the Measure of Business Performance
In addition, the reduced menu means diners don't stay quite as long (dwell time) because they finish their meals quicker.
I’m guessing the average customer dwell time is 45 minutes with a reduced menu versus 75 minutes with the full menu. The cafe will probably serve 50-100% more customers every day and still deliver good customer service - preserving its hard-won reputation.
In normal trading conditions, the usual method of measuring a restaurant's performance would be calculating revenue per cover, per day. By serving a reduced menu, the average customer spend (or “yield”) would likely reduce 30% but the number of customers served throughout the day would go up substantially, possibly 60-100%.
Smart business...and a well-earned rest for all the staff in September when the summer madness is over.
The cafe adapted to a temporary (but predictable) change in market conditions (increased footfall)
It adapted by offering a reduced menu, meaning it could serve more customers whilst maintaining service levels
For those people (like me) hoping to order the full English, whilst experiencing a tiny measure of disappointment at being denied their preferred option, I was still able to enjoy a fantastic bacon focaccia; much more preferable than being turned away from a full restaurant because they’d failed to adapt to the changed market conditions.
There is also a “double whammy” when it comes to turning customers away: not only do you miss out on that opportunity to serve but you also increase the likelihood that customers who are turned away won’t bother returning in the future, so there is a future revenue implication too. This is not so easy to measure though.
What steps could you take to adapt to temporary - but predictable - changes in market conditions?
Whilst not seeking to be a prophet of doom, the latter half of 2022 will see the global economy going through a tumultuous period of increased inflation, a dramatic rise in energy costs and a cost of living crisis plus Christmas and other cultural events, depending on where you are in the world.
What steps could your business take to protect itself from the challenging market conditions ahead whilst also benefiting from potentially increased opportunities to serve customers (maximise customer “yield”)?
Anyway, my “full English” will have to wait for another time, which means us returning to Sandsend and the Wits End Cafe again soon.
No complaints from me! 😎
For business owners and sales professionals in the West Midlands, I’ll be delivering a workshop on maximising customer yield for The Greater Birmingham Chambers Of Commerce this October.
More information here