Sunday, June 12, 2011


A revenue increase from last year to this year of between 15% and 20% for the first week of the month for a couple of months now.
     I can’t tell you the name of the restaurant that achieved this, but I do have permission to give you a broad hint. I’ll say the restaurant is in downtown Sacramento, California, almost directly across the street from a bank with a well-known name and not that far from the State Capitol and other buildings housing state workers.
     The significance of my revealing this location is that many state workers are paid near the end of each month. No surprise then that for a number of years, the restaurant had been enjoying greater average revenues the first week of the month than for the other weeks. The patrons and prospective patrons felt more flush. The regular patrons were ready to try out the more expensive entrées, and the prospective patrons were ready to waive brown-bagging it for a day or two.
     More recently, the restaurant owner learned about some consumer behavior findings: Researchers at University of Utah and University of Iowa found that in the days soon after receiving a paycheck, consumers with full-time jobs become what is called “promotion-focused.” As the days after the paycheck pass, the person becomes progressively more “protection focused.”
     Researchers at Columbia University and Singapore Management University found that promotion-focused and protection-focused restaurant patrons spend more money when the menu is structured to fit their frame of mind: Promotion-focused consumers go for package deals—one price for a salad/soup/appetizer, entrée, dessert. Prevention-focused consumers spend less on the meal when the menu is structured this way rather than as a traditional list of items under category headings.
     Empowered with this knowledge, the restaurateur printed up different menus for the first week of the month. Revenues, which were already elevated for that first week, have grown even greater.
     There certainly are other explanations: Maybe, consumer confidence is higher this year than last. The novelty of a different menu could lead to diners spending more because they are more stimulated. Restaurant staff interest in the combination dinners might be enriching their sales pitches to the customers.
     Finding out what’s making it work is important. For now, though, an elaborate tip of my hat to any restaurateur—and to every other retailer—who applies consumer research findings to experiment with ways to improve store profitability.

For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more:
Merchandise to Fit Purchasing Cycles
Cycle the Merchandise by Paycheck Interval
Sell Either Protection or Promotion

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