How To Maximise Revenue With Oddle's Free Reservation System for Restaurants
It's time to make reservations a part of your primary sales strategy
It’s a scenario every restaurateur has heard of: customers are making reservations at multiple restaurants for the same timing and only picking one to go to, resulting in no-shows for the rest. It’s an issue which has been plaguing restaurant industries for years, resulting in a whopping 30% loss in revenue on average. The higher the operating cost of a restaurant, the larger the blow.
To get around this, restaurants usually require diners to put down a deposit. $50 is the industry norm, an amount that is totally arbitrary and can, at times, seem like you are threatening customers with a penalty.
Deposit amounts should be dynamic and controlled by the merchant
Instead of discouraging reservations with high deposit charges, the most successful F&B businesses rely on a pre-payment or a variable deposit model — both of which can be easily achieved with Oddle’s free reservation system.
As long as there is enough demand, both methods can be applied to F&B concepts at all levels and price points. For example, if you run a casual eatery with a healthy walk-in volume, there’s no need to hang the threat of a hefty penalty over a potential customer’s head. A token $10 deposit can go a long way in fostering a sense of ownership towards the reservation.
There’s no reason why your deposits should be static either. High demand periods can rightfully command a higher deposit, while low-traffic periods can be made more attractive with lower prices. There’s even the option of running a higher deposit on high-risk menus with rare or particularly perishable ingredients.
Beat high costs with Oddle’s free reservation system
Most reservation systems turn a profit by commissions and subscription fees that can go up to four figures per month. When combined with the potential revenue loss that reservation no-shows can bring, your business is losing money on two fronts.
However, Oddle has a different point of view when it comes to working with restaurants. With a merchant-centric philosophy that believes in helping restaurants grow and thrive, Oddle has decided to make their reservation system completely free to use.
While other reservation systems charge based on potential earnings, Oddle’s ‘Tickets’ function (part of its free online reservations system) guarantees a sale and prevents no-shows.
There’s no commission, subscription, or cover charge with Oddle Reserve — and only a 3.4% usage fee (inclusive of payment gateway charges) when customers pre-pay through ‘Tickets’. This translates to immediate cashflow for both the restaurant and Oddle, even before the customer walks through the doors. As a bonus, because Oddle only earns when Tickets are sold, it is incentivised to help restaurants sell them.
The key approach here is agility. Oddle offers a highly customisable, free online reservation system that can be easily modified and structured to fit a restaurant’s changing needs. Observe your operations by the day, week, and month to figure out the pricing strategy that is needed for each period — and strategise accordingly.
Consider the following scenarios:
A: Your restaurant has high demand, but low supply
If your restaurant has a long waiting list but can only accommodate a limited amount of covers, consider charging a premium and generate immediate cashflow by selling tickets using Oddle’s free online reservation system. Not only do you maximise revenue, you’ll also find inventory planning easier as you know exactly how much you will be selling for a particular day. Should you wish, the savings made this way can even be passed on to customers.
Additionally, research from the University of Denver’s Daniels College of Business has shown that customers are more likely to spend more when they’ve already pre-paid for a meal. While the research involved payments of roughly US$10, it’s easy to imagine customers of a mid-to-high-end experience spending more on drinks or supplements when they’ve already paid for the meal weeks or months prior.
B: Your restaurant has high demand and high supply
If you run a popular fast-casual or casual restaurant, your main concern would be securing revenue by preventing no-shows and ensuring that the minimum amount of time elapses between seat turnovers. Delaying 15 minutes for a reservation no-show might not seem like a long amount of time, but if this happens for every cover, you’d be losing a significant portion of the day’s business.
Charging a deposit using Oddle’s free online reservation system helps you lock in a certain amount of revenue, reduce no-shows, and discourage late arrivals. At just a $5 deposit, with 200 bookings, you are guaranteed at least $1000 in revenue — and that is looking at the extremely unlikely scenario where not a single person turns up.
It is even possible to use a ticketing system in this instance – especially for hero items that sell out quickly or are extremely limited. This not just guarantees sales and helps determine high-volume inventory, but helps to set customer expectations since they can know whether an item has sold out early.
C: Your restaurant has low supply and low demand
This is the worst-case scenario and chances of success are low. If your operation falls into this category, it is time to reassess your strategy and take a close look at your finances. Give yourself a timeframe to turn things around based on how much more losses you can stomach. At the same time, take look at how you can cut your losses.
Possible solutions include optimising shifts and service hours by reducing manpower during less busy periods. Consider trimming your menu to the essentials and top sellers to decrease your inventory costs, or even re-branding to a different concept. Take a look at your immediate surroundings — for example, if you are close to offices, in a mall, or nightlife places — and decide if your concept is taking full advantage of your closest potential customers.
At the same time, try to drum up publicity for your brand. In today’s age, digital footfalls are just as valuable as physical ones — and having a presence on high-value internet real estate like Oddle’s food discovery platform, Oddle Eats (with over 1.2 million monthly reach), can do wonders for your brand. For more in-depth marketing growth, Oddle’s merchant marketing service includes a full suite of solutions including media planning, creatives and collateral production, and a team of experienced, dedicated F&B veterans to help you invest in your revenue.
D: Your restaurant has low demand, but high supply
If the customers aren’t coming, perhaps there aren’t enough eyeballs on your brand. Build hype and demand through promotions, streamline your booking process with free online reservation systems, and find the right audience with Oddle’s data-intensive solutions.
Running promotions are a breeze with Oddle Eats, where merchants enjoy fully-funded promos from Oddle’s bank partnerships. They can also take full control of the kinds of discounts they want to offer at zero extra cost — unlike on other platforms, where customers have to buy vouchers which the issuing system takes further commissions from.
Real-world Case Study: TGI Fridays Malaysia
A highly popular chain in Malaysia, TGI Fridays offers American food in a casual setting. Like most restaurants, it sees varying traffic during the week, with higher footfall on weekends and special occasions. Weekdays, meanwhile, are generally quieter.
Based on our learnings from the supply and demand matrix above, there are several sales strategies they can employ.
On weekdays, when there’s low demand but high supply, the chain can drive sales through bundled deals, set meals, and other promotions. On Fridays and Saturdays, when the restaurant sees its peak volume, they can lock in revenue through either deposits or pre-payment with digital solutions like Oddle’s free online reservations system and its ‘Tickets’ function.
On special occasions and peak seasons with overwhelming demand, like Christmas or Valentine’s Day, the chain can charge a premium on special set menus — also through Oddle’s ‘Tickets’ system.
With Oddle’s free online reservations system, it’s easy to start making reservations part of your main revenue strategy. Save up to thousands each month with Oddle’s cost-free reservations system, while preventing no-shows and locking in cash flow with Oddle Tickets.
Why is Oddle Reserve free? Read all about it here, or take a look at our beginner’s guide to Restaurant Management.
