a guest Jan 21st, 2020 76 Never
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- Observations - Lots of customers.
- Majority buy banh mi (no surprise).
- Majority buy ONLY banh mi (surprise)
- The Banh Mi is the selling point. It’s what gets customers in the door and is the very core of the business.
- Don’t change this. It’s perfect.
- However, Banh Mi is labour intensive compared to drinks, and the profit margin is much thinner (even moreso when including labour/prep costs).
- Drinks on the other hand have insane profit margins, are the perfect compliment to the food and you already have the hardest part of getting customers in the door sorted, it’s now a matter of leveraging it. So the question becomes why should people buy drinks from you instead?
- As a customer I know at times I have bought Banh Mi then gone and got a drink elsewhere. Why? Variety. Often because bubble tea is available somewhere else and there is no direct incentive to buy the drink with the food.
- Now I’m not suggesting you start selling bubble tea (although this would be a smart idea later down the track if it appeals) but rather, you need to give customers a good reason to buy their drink here and not elsewhere.
- This brings me to my first point/improvement that is extremely simple yet I believe will make the biggest impact. Cross sells/upsells are the lifeblood of a business. How thick your bottom line is almost entirely dependent on how much you can upsell/cross sell.
- When you have a line of people out the door, your supply is outpacing your demand. You can’t make banh mis faster which limits the amount of cashflow available to come into the business. Drinks and upsells overcome this.
- My suggestion? Drink combo. What exactly you want is up to you, but trial something like the below and see for yourself if it is working or not and tweak accordingly. The price points below depend on your profit margins for each, which one you think you can sell best but it serves as an example.
- Add on a drink for only $1 (can)
- $2 bottle
- $3 Viet Iced Coffee
- You want 3 options for the cross sell. One that is basic but cheap (cans), one that is more desirable and has ‘something for everyone’ (bottles) and a premium option that costs more but has enough appeal to justify it.
- If you can find other products to upsell/cross sell you dramatically increase the amount of money you can make per customer which is the point that you are at. Doing this is far more important than increasing the number of customers in the door.
- Double meat - $2 is a great upsell but needs to be advertised/offered.
- Nutella Donuts were a great cross sell but didn’t have any incentive/discount to encourage purchasing with a Banh Mi. ($3 on their own or $2 with a Banh Mi). When you give people a discount, you give them a tool to overcome their own mental resistance. You make it easier to justify the purchase. Like when you know you should be studying but then your mate invites you out. Suddenly staying at home becomes twice as hard!
- It’s important to have the upsell/cross sell advertised and more importantly to have it stated. When a customer buys a Banh Mi - did you want to add on a drink? It’s cheaper in a combo!
- This is the reason why Maccas asks you constantly if you want fries with that because every dollar you squeeze out of a customer is huge for the bottom line over time.
- It also has an accumulative effect which can create its own positive feedback cycle - make more revenue = more more for improvements/marketing = more revenue etc.
- Combo with drink/multiple banh mi
- $1 bring a mate =
- Advertising =
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