Run the Numbers Part 2: What would a 15-20% Increase in Average Order Value do to Annual Revenue?
In the previous blog post, we explored how implementing self-service kiosks can significantly boost order volume, driving growth and profitability for your QSR. Now, let’s take a deeper dive into how these kiosks can enhance your QSR’s performance by increasing the average order value.
Understanding the Impact:
Your QSR is constantly seeking ways to enhance operations and attract more customers. Self-service kiosks offer a game-changing solution by streamlining ordering processes and enhancing the overall customer experience.
The Setup:
Let’s revisit your QSR’s performance without self-service kiosks:
- 60 orders daily with an average order value ranging from $9 to $15
- Operating for 50 weeks (6 days a week)
- Profit margins on food sales at an industry average of 7.5%
Here’s an estimate of what this looks like as a benchmark:
| Low End | High End | |
| Daily Gross Revenue ($9/$15 /order*60 orders per day) | $540/day | $900/day |
| Weekly Gross Revenue ($540/$900/day) | $3,240/week | $5,400/week |
| Annual Gross Revenue (50 weeks) | $162,000 | $270,000 |
Projected Performance:
Now, let’s introduce the concept of increasing the average order value with self-service kiosks while keeping the order volume constant.
Here’s a simplified breakdown:
- Low End (Conservative Estimate): 15% increase in average order value per order
- High End (Company Benchmark from customers): 20% increase in average order value per order
| Low End (+15%) | High End (+20%) | |
| Daily Gross Revenue (@ same average order volume) | $683/day | $1,188/day |
| Weekly Gross Revenue | $4,094/week | $7,128/week |
| Annual Gross Revenue | $205,230 | $356,400 |
| Previous Year’s Gross Revenue | $162,000 | $270,000 |
In 1 year, with consistent foot traffic, you’re looking at:
Low end: scaling from Annual Profit: $162,000/year up to Annual Profit: $205,230/year
Conservative figure: +$43,230 annual profit growth
High end: scaling from Annual Profit: $270,000/year up to Annual Profit: $356,400/year
Our company average growth: +$86,400 annual profit growth
How do our kiosks actually boost average order value?
- Upselling Suggestions: kiosks can be programmed to suggest additional items or upgrades to your customers during the ordering process. For example, when a customer selects a burger, the kiosk could prompt them to add fries and a drink for a discounted combo price, thereby increasing the total order value.
- Visual Menu Displays: kiosks feature visually appealing menu displays with high-quality images of menu items. This can entice customers to explore additional menu options they may not have considered, leading to impulse purchases and higher average order values.
- Customization Options: Kiosks allow customers to easily customize their orders according to their preferences. This could include adding extra toppings, choosing specific ingredients, or adjusting portion sizes. By offering customization options, customers may be more inclined to add extra items to their order, increasing the overall order value.
- Order Bundling: Self-ordering kiosks can offer bundled deals or promotions that encourage customers to purchase multiple items together at a discounted price. For example, a kiosk could promote a “meal deal” that includes a sandwich, side, and drink for a lower price than purchasing each item separately. This incentivizes customers to spend more on their order in order to take advantage of the bundled offer.
- Data Driven Trend Visibility: your data will be laid out in your manager’s dashboard to identify trends, combos, and things that are paired together most frequently. You can leverage those order trends to create specials and maximize order value there as well.
The Bottom Line:
By leveraging self-service kiosks to increase the average order value, your QSR can unlock additional revenue streams and drive substantial growth. These kiosks not only streamline operations but also provide opportunities for upselling and cross-selling, ultimately leading to higher profitability.
Investing in self-service kiosks isn’t just about embracing technology – it’s about maximizing revenue potential and staying ahead in the competitive QSR landscape.
Ready to Elevate Your QSR Experience?
Contact us today to learn more about how self-service kiosks can transform your QSR and drive significant growth in average order value.
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