Optimization is an important part of building a profitable business in the restaurant industry; efficient operations can help you reduce waste and maximize productivity. Restaurant analytics play a critical role in the optimization process — by collecting data about each aspect of your business, you can establish a baseline understanding of current operations. From there, it’s easier to find areas that need improvement, measure the results of your optimization activities, and keep track of ongoing performance.

Could your restaurant benefit from a more optimized operation? Let’s take a look at how you can use big data and restaurant data analytics to improve the customer experience and boost your bottom line.

What are restaurant analytics, and how do you use them?

Restaurant analytics are data points you can create by gathering and analyzing information about your business. Each metric assigns a numerical value to a specific process — they’re an objective way to assess your restaurant’s operation.

Using data analytics is one way to measure performance and find ways to improve. For example, the average meal-prep time might be one metric you track. If the figure is too high, it means your restaurant is operating inefficiently. To fix it, you might improve staff training, develop a more streamlined kitchen workflow, or replace older equipment. Then, you can monitor the metric; if the average prep time drops, it’s a sign your solutions were successful.

Over time, data analytics can help you make informed decisions that cut costs, increase profits, and improve the dining experience for takeout, delivery, and in-house customers.

Why should you use restaurant analytics?

Successful restaurant owners adapt quickly to changes in the restaurant industry. Data analytics is a valuable tool in this process — it provides an objective framework for informed decision-making, ensuring you’re not relying solely on perceptions and assumptions.

Hard data helps you identify the actions and menu items that maximize profits; that way, you can do more of what works. It also makes it easier to spot inefficiencies in your workflow. With that information, you can strategically streamline restaurant operations, cut back on waste, and boost returns.

As technology developments continue to rock the restaurant industry, data analytics can help restaurant owners identify relevant trends and changes in customer preferences. This updated information enables you to capitalize on new innovations and stay ahead of the competition. If restaurant analytics indicate an increase in takeout orders, for example, you could enhance the customer experience by investing in self-order kiosks.

How to collect restaurant analytics

How do you get the data to run restaurant analytics? Chances are, you’re already collecting it.

The average restaurant generates three primary types of data:

• Operations data. This information includes sales information, staff levels, most popular times of day, and ordering statistics for individual menu items, among others. Most of this information comes from your POS system and restaurant management software. Your inventory management system can also provide valuable data and predictive analytics regarding ingredient supply levels, ordering frequency, and popular ingredients.
• Customer data. This data could include customers’ location, age, family details, ordering preferences, online ordering patterns, birthdays, and allergies. Guests might provide this information to you when they place online orders, join your loyalty programs, redeem a special promotion, or sign up for an email list.
• Website data. If your restaurant website is connected to a data analytics program such as Google Analytics, you can collect valuable information, including traffic, referral sources, bounce rate, conversions, and how users move through the site. This data is anonymous but may include general identifying information, such as users’ locations, device types, and entry points to your website. Other data analytics services, including Google Search Console, can also tell you what terms people are searching to find your website.

When you list your restaurant on the Grubhub Marketplace, you gain access to another valuable data source: the Grubhub customer insights dashboard. This tool provides information, including total sales, total orders, average daily orders, and average order value. To help you get to know different audience segments, we also make it easy to compare customer behavior between new and returning guests or Grubhub+ members and non-Grubhub+ members. Understanding customer preferences is one way you can use technology to improve operations.

Ways to use restaurant analytics to increase your revenue

Before you can use data analytics to boost your business, you must decide which information to track. To start, select the key performance indicators (KPIs) that are most relevant to your restaurant operation. Then, calculate for each metric using your current data. Check your restaurant POS system — it may have built-in restaurant analytics software that can access sales and customer data and generate KPIs for you.

With your KPIs in hand, use these steps:

• Look for areas that are performing below expectations.
• Implement steps to correct the problem.
• Monitor data analytics regularly to see if your efforts are working.

Over the long term, continuous monitoring can help you:

• Identify areas for improvement
• Find operational issues before they affect revenue
• Capitalize on new opportunities

What does the restaurant data analytics process look like in practice? Let’s review popular restaurant KPIs and how you can use them to increase sales and profits.

• Profit margin. This figure communicates how much revenue is left after expenses; it tells you if your earnings can support sustainable growth. Low margins indicate you need to cut costs, reduce waste, increase prices, or switch to more affordable ingredients.
• Delivery speed. This metric helps you understand the efficiency of your logistics and scheduling. In general, it should be as low as possible without compromising safety. If deliveries are taking too long, you might want to choose different routes or adjust your kitchen workflows. Partnering with a third-party delivery service is another effective option.
• Average order value. This metric tells you how much the average customer spends on each order. To boost profits and sales, increase the order value by upselling items such as cocktails and desserts or offering meal bundles. Free delivery can also encourage customers to order more.
• Customer review scores. Review scores are an aggregate of all your customer reviews. They indicate the overall quality of the customer experience and customer satisfaction. A higher score is always better; it can drive more business and increase sales. To encourage better reviews, focus on creating a positive customer experience, serving high-quality food, and providing impeccable service.
• Order accuracy. The order-accuracy rate should be as close as possible to 100%; a near-perfect score means your staff are listening to customers, recording orders accurately, and preparing food as instructed. A low number can result in unhappy diners. Ways to raise it — and boost sales in the process — include conducting staff training, implementing self-ordering kiosks, and adding quality checks.
• Average orders per shift and day. By tracking order volume trends, you can spot the busiest periods for your restaurant. That way, you can schedule the appropriate number of employees and manage your inventory effectively to meet demand. This KPI can also identify slow periods; these are the best times to add deals or discounts to boost revenue. 
• Food cost percentage. This metric tells you how much of your revenue goes to food costs. If it’s too high, it can erode your profits; you may need to switch to cheaper ingredients, renegotiate supplier contracts, or improve your inventory management.
• Customer support requests. The number of support requests tells you how easy it is for customers to interact with your business. A high number indicates a problem — a confusing online ordering form, an issue with service, or a food quality problem, for example. When you find and resolve the root cause, this KPI should drop.
• Social media engagement. This KPI measures how many people like, comment on, or share your social media posts compared to the total number of impressions. A higher percentage is better; more engagement encourages the algorithm to show your posts to more people, which boosts brand awareness and digital marketing conversions. To increase the rate, you can ask questions, hold contests, or post exceptional photos and videos.
• Ad conversion rate. This figure tells you how many of your ad viewers convert into paying customers. It helps you determine how effective each ad is. A low rate is a sign to tweak the imagery or copy of the ad, the landing page, or both. It may also mean you need to target a different audience.

Gain visibility over your restaurant insights with Grubhub

As a restaurant owner, you have a wealth of data (or big data) at your disposal. With restaurant analytics, you can put that information to work and reveal useful insights that can help improve the business, meet customer needs, and boost profits.Need more restaurant data? Partner with Grubhub to collect and analyze delivery and takeout data automatically. Then, you can check your Customer Insights dashboard to monitor KPIs at a glance. To try it out, partner with Grubhub today.