Stay in the loop
Table of Contents
Bars and restaurants revenue vary widely from one establishment to another. But one thing is certain and it’s that any bar owner can boost his/her average profit margin with proper bar management techniques. It doesn’t take a rocket scientist to know that while many customers come for the food, it’s actually alcohol sales that have the ability to drive profits. So with that being said, you need to take in consideration new upselling techniques and get creative, it can make or break the future of your bar. In this article, we suggest some highly effective strategies and methods to help you increase bar sales.
How to increase bar sales
Here’s a list of smart practices that you can adopt to increase your bar revenue and improve profitability:
1. Focus on your existing customer base
One mistake a lot of businesses make is that they usually focus on getting new customers and neglect the ones they already have. It’s important that you make your existing customer a priority. Loyal customers can turn into brand ambassadors and give your bar positive exposure through word of mouth, by sharing pictures they take at your establishment on social media or by bringing new people along with them. Focusing on only attracting new customers rather than establishing strategies to retain and fidelize your existing ones can cost you more than you think.
2. Use upselling techniques
Both you and your servers must know how to upsell in order to increase your sales. Upselling is about persuading or encouraging a customer to buy something additional or more expensive than what he requested. If you know how to upsell, train your staff to be more than order-takers. Customers are usually open to trying new drinks or ordering more than one drink. Your waiters need to know how to smoothly get customers to try other higher-priced items.
Here are some ideas to help you upsell :
- Suggest that your customer try something new
Make sure you always have new and exciting items on your menu so that you can suggest them to your customers. Groups of friends or co-workers can be open to trying new things together just so they can share opinions and have fun.
- Create signature drinks and drink specials
Create signature drinks that go with your bar atmosphere and which your servers can recommend to customers with a special price. You can do the same with your food items. If you’re an experienced mixologist, you can also create drinks on the spot according to the client’s preferences (bitter, sweet, spicy, preferred alcohol, etc.).
- Offer before, during, and after food drinks
When customers come to your restaurant for food, servers can offer them drinks while they wait for the meal, drinks while they eat, and a special wrap up drink after the meal. This way, you get the customer to buy more.
3. Have something for everyone
Not all customers are willing to try expensive or exotic drinks. The point is, you have to have something to offer for every kind of customer. You should work on a diverse, accessible drink menu and cocktail recipes that include regular, innovative, high quality, and not so high quality drinks. It will be the kind of menu that will satisfy every customer coming into your bar restaurant.
A diverse, innovative drink menu should include:
- High-quality drinks: you can have a collection of premium and super premium drinks to offer.
- Not-so-high quality drinks: make sure you have multiple choices for the customers who prefer traditional cocktails (rum and coke, gin and tonic, etc.). It’s also a way to lower your cocktail pour cost.
- Signature cocktails: this is almost everyone’s favorite. People love to try new things they can’t find elsewhere. This can set you apart from your competition.
- Seasonal offerings: Seasonal drinks are a great way to use local ingredients that are in season and entice customers to come to your bar.
- Wines by the glass: people like to try different wines without having to buy a whole bottle. Make sure you have that option in your drinks menu. Your customers can start with a glass and finish with a bottle.
4. Offer freebies
Sharing a sample of the chef’s inspiration for a new dish or the bartender specialty drink is likely to make your customers happy. People will appreciate the gesture and they might give you feedback. You can use this strategy to test a new wine brand or craft beer and see if it gains your customers’ approval before adding it to your menu.
5. Motivate your staff
Challenge your waitstaff and bartenders to come up with new ideas for drinks and food. They are the ones who communicate with the customers, so they should have insights about what they like or dislike. Encourage them to make suggestions based on the customer’s preferences. You can set monthly target sales goals, and if they reach their target, you can reward them for their hard work. This will enhance teamwork among your staff and motivate your workers to engage more with customers.
How to increase bar profits through analysis
One of the most important steps to achieve bar profitability is to get a clear idea of your costs. There are four major cost figures, also called KPI’s, to look out for in order to maximize profits:
- Cost Of Goods Sold (COGS)
It’s the cost of materials and labor used to create the goods. In a bar, the cost of goods sold is the cost of all the ingredients and materials used to create a beverage or cocktail.
The formula to calculate this is:
Beginning Inventory + Received Inventory – Ending Inventory = COGS
- Prime Cost
Prime cost is the sum of COGS and labor costs, it accounts for all costs of operating your bar within a given period of time. It’s used by business owners to set goals and optimize profits.
The formula is:
COGS + Total labor = Prime Cost
Once you have this number, you can divide it by total sales to determine your profit margin.
- Pour Cost
Your pour cost is how much inventory you’re using divided by how much of that inventory you’re selling. So for a drink, it’s how much a drink’s ingredients cost divided by how much the drink is sold for. It’s expressed as a percentage.
The formula is:
Pour Cost = Inventory Usage ($)/Total Sales ($)
Beer cost, liquor cost, and wine cost differ.
- Food Cost
If you own a bar that also serves food, food cost should be just as important as pour cost. Food cost is how much a dish’s ingredients cost divided by how much that dish is sold for.
The formula is:
Food Cost = Inventory Usage ($) / Total Sales ($)
Need help managing your bar costs?
How do you attract customers to your bar?
If you want to attract customers to your bar, you need to take into account your staff, food, beverage, entertainment, and atmosphere. Here are some ways to attract people to your bar:
Create a cozy bar atmosphere
You want to create a bar environment that impresses customers or makes them feel comfortable and keeps them coming back. Here’s a list of factors to consider in order to achieve this:
Seasons: If it’s freezing outside, you have to have proper heating and make sure that once your customers are in your bar, winter stays out. It will encourage people to come to your bar and stay longer.
Lighting: Consider dimmer switch options that let you adjust lighting for different times of the day or occasions. It’s better if you avoid the bright fluorescent lighting and use warm lighting, decorative candles, or industrial drop lighting over tables to create a warm feeling in your bar.
Seating: when making seating arrangements, make sure you leave enough space between tables, so it won’t be overcrowded when the bar is packed. The more comfortable your bar is for your customers, the more they will keep coming back.
Music: schedule times for different music genres you play in your bar. Some customers like jamming to loud and fast music while drinking, others prefer the after-work atmosphere where they can talk with their colleagues. You can start with light jazz in the evening, moving on slowly to more upbeat music.
Plan Happy Hours
You should plan happy hours at times where you generally have fewer customers in order to bring in more people and increase your sales. Younger customers are always on the lookout for affordable bars. You can provide cheaper drinks or also offer a drink with every drink bought. In the case of a restaurant, you can offer a beer with a food order or a free plate with a pint of beer. This way you encourage customers to come in and are able to upsell.
Organize bar games and themed nights
It’s important that you succeed at engaging with your customers so that they keep on wanting to come back to your bar. A great way to do so is by planning bar games and themed nights. Here are some ideas:
Bar games: billiards, Skeeball, Board games, Darts, Photo booth, Cornhole, Cards against humanity, Pinball, etc.
Themes: karaoke, Christmas, Halloween, Jazzy, Jungle, Harry Potter, 90’s retro, Hollywood Glamour, etc.
Nowadays, it’s essential for bars to leverage social media if they want to stay ahead of their competition and make sure new customers find out about them. Here are some tips to help you promote your bar on social media:
Use high quality images
Make sure you share your own images with fun branding and storytelling. The golden rule of social media marketing is to share unique and distinctive content.
Make your followers engage with you
You can start a voting game, where you post images of different cocktails in your bar and ask your followers to vote for their favorite drink and tell you why they made that choice. And then, of course, you reply to their responses with some funny and quirky comments.
Humanize your brand
People always have this preconceived idea that business pages are there to sell them something. By giving your followers behind-the-scene snippets of how things work in your bar, you can humanize your brand and foster a trusting relationship with your followers.
Share valuable information
Now more than ever, people depend on social media to get information. Your followers will visit your pages to check for the latest events, themed parties, or any noteworthy content. Make sure your pages and accounts are all updated. You can post images, videos, or any information related to upcoming events at your bar.
Reach out to influencers
Another efficient way to promote your bar on social media is by partnering with influencers. Contact influencers whose followers are in your target audience. A tweet, a tag on Instagram, or a recommendation from them can make the difference for your presence on social media as well as your sales.
How a bar inventory app can help you increase your bar profits
Using a bar inventory app will make it easier for you to monitor and identify risks and eliminate unnecessary costs. Inventory apps like the rapidbar app allow you to manage your liquor in real time and easily access stock usage and sales through your mobile device.
The rapidbar app helps you run your bar and manage your liquor sales and orders. It also helps you manage your costs better and cut them down. Using your smartphone, you can easily access liquor batch information and restaurant recipes as well as sales for retail and inventory count. Real time updating of inventory from the app will help you save time and reduce labor costs. This way, you will use the time you save to focus on increasing beverage sales.
