Using Data To Take The Guesswork Out Of Price Increases

Restaurants have had a tough time due to the COVID-19 Pandemic.
Having to adjust constantly was challenging. But, having crucial
data at their fingertips gave owners, managers, and restaurateurs
essential insights into improving their operation.


Giving insights to The Main Course Host, Barbara Castiglia is
Christina and Chris Norton of Revenue Management Solutions, which
helps the restaurant and retail industry identify profitability
opportunities through data-driven analytics and tech-enabled
solutions that optimize sales, menus, and a brand’s financial
health.


“We look at the historical data of a restaurant, and based upon
the data we see from their POS,” Chris said. “When prices change,
when limited time offers have been added to the menu, when value
propositions have been added to the menu board, we understand the
reaction of the consumer based upon the historical data.”


Utilizing this data, they put it through their regression model,
which helps them understand gross profit and sensitivities. This
helps them understand the items on the menu board that are the
most optimal to move in terms of increasing price so as not to
affect guest counts. If a restaurant has a positive or negative
guest count trend, the pricing they give to clients in terms of
price additions will not affect that trend.


This gives restaurants the data to understand when they should
raise prices on items and the optimal items to do so. This takes
the emotion and guesswork out of how and when to raise prices.
Then they analyze the data to see if the changes work.