The KPIs Every Cafe Owner Should Track
Are you tracking the right KPIs for your cafe? Whether you own a small café or a larger chain, it’s important to track the right metrics and make sure things are going in the right direction. So, what are the types of KPIs that cafe owners should know and use? Let’s find out.
Why do you have to keep track of KPIs?
KPIs are specific metrics that tell a lot about your business performance. They answer whether you’ve met your objectives and goals. They indicate if you need to improve or adjust your strategies.
Business owners need to track different types of KPIs depending on what they want to improve. The most common metrics often relate to profits, customers, job satisfaction, or service quality.
KPIs should be measurable and specific so you can compare, analyze and make plans based on them. Besides tracking and using those metrics, ensuring everyone’s accountability for meeting those KPIs is also important.
Types of cafe KPIs that you should know
Employee retention
Businesses in the Food & Beverage industry face a significantly high turnover rate. Hourly workers often work for a short amount of time or disappear without any calls. Hiring is costly and qualified staff are harder to find. Training staff to a competent level takes time and energy.
That’s why many cafés start paying attention to employee retention metrics—the percentage of employees who remain in the company for a certain period of time.
To measure employee retention, use this formula:
(Starting Number of Employees + Ending Number of Employees) / 2 = Average Number of Employees
Retained Employees / Average Number of Employees = Employee Turnover
RevPASH (Revenue per available seat hour)
Developed by Sheryl E. Kimes at Cornell University, RevPASH is used to measure the usage and revenue of 1 seat per hour. It helps you plan shifts and the layout of your café, stock supplies accordingly, and increase table turnover.
To measure RevPASH, use this formula:
RevPASH = Total revenue / Seat hours
(Seat hours = number of seats x hours open)
RevPASH allows you to adjust strategies based on your café peak/slow times. For example, if you spot certain hours of the day when traffic is low, you can offer specialty foods, hire live performers, or provide incentives such as happy hours to attract customers.
Customer retention rate
A café can only survive and grow when it has loyal customers. It costs more time and resources to attract a new customer than to keep an existing one, so measuring customer retention is a must.
How to measure:
Retention rate = [(Number of customers at the end of the period – number of new customers acquired during that period) / number of customers at the beginning of the period)] x 100
The hardest thing about calculating customer retention is finding data for the above formula. You should find suitable tools to track customer relationship management (CRM) and purchase history.
Customer experience KPIs
Customer satisfaction should be the top priority of any businesses in the service industry. The more satisfied customers are, the more likely they are to return. A satisfied customer not only returns, but they also spread the word—recommending you to their circle, giving you positive online reviews, and supporting you on social media.
Along with customer retention rate mentioned above, the number of online reviews and the average review score on Google, Facebook, Tripadvisor, and Yelp are also important indicators to monitor.
Conclusion
Now that you have several KPIs to track, when should you start? Today!
Take a look at all the aspects of your café that can be improved, find out the right KPIs to track, monitor them, and improve your products/services.
