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12 Strategies To Increase Ghost Kitchen Sales & Profits
While restaurants typically operate on thin margins (on average 3% to 5%), ghost kitchen often are more profitable (15% margin on average). The smaller size of the location and the lack of customer service indeed reduce overhead costs significantly.
However, with increasing competition, maintaining a high-profit margin for your ghost kitchen business is not simple. Instead, there are a number of strategies you can use to increase your ghost kitchen sales and reduce your overheads to maximise profits.
So, what are the 12 best strategies to increase profits for your ghost kitchen business? Let’s dive in!
If you own a restaurant instead, make sure to read our article here.
1. Increase Conversions
★ Strategy to increase your ghost kitchen sales
Unlike the brick & mortar shops, ghost kitchens rely on digital presence to create visibility in the marketplace. Therefore, your restaurant needs a great website optimized to make purchasing easy and quick. To increase and drive profits, the business owner must work on increasing conversion rates. Here are some strategies for increasing conversion rates:
- Create online presence
- Ensure regular engagements via social media
- Invest in high-quality food photography
- Run effective email marketing campaigns
Increased conversions result in better sales, which is key to increasing business profitability.
2. Promotional Offers
★ Strategy to increase your ghost kitchen sales
Loyalty and reward schemes are great ways to incentivize customers to keep ordering from your ghost kitchen, eventually to increase your sales. You can sell special meals at discounted prices or announce happy-hour offers to increase sales during those low sales days.
Sales promotions encourage customers to order, which is a great way to boost short-term sales and attract new customers.
3. Improve Brand Reputation
★ Strategy to increase your ghost kitchen sales
Falling short of customer expectations could mean losing customers. Unhappy customers will leave negative reviews, which damages your online reviews. Therefore, a positive brand reputation gives your brand a competitive edge by becoming more attractive to customers. Overall, brand reputation makes the business more profitable and resilient. A positive reputation increases the number of customers and improves customers’ quality.
4. Upselling
★ Strategy to increase your ghost kitchen sales
From the initial order, the customer leaves data on your system. Personal data can help you profile the customers based on demographics or tastes and preferences. Utilize that data to suggest food to your customers.
For example, you can upsell priced menus to repeat customers (e.g. add a dessert at a discount when part of a menu) and consequently increase your ghost kitchen sales.
5. Optimize Your Menu
★ Strategy to increase your ghost kitchen sales
Leveraging customer data to create a better online menu helps you drive revenues and engage with your customers better.
Increase the number of menu items, so customers feel tempted to order something different. Share the optimized menu with your customers to keep them coming back to your shop.
6. Pricing
★ Strategy to increase your ghost kitchen sales
Once you have optimized the menu items, make sure the pricing is relative to the target market.
For instance, if you target customers who dine at a posh local restaurant, ensure the pricing reflects the value to the customers. Likewise, if you target college students, the prices must be relatively low compared to how much you charge affluent customers with higher buying power.
7. Work With Influencers
★ Strategy to increase your ghost kitchen sales
Influencer marketing for ghost kitchens is another powerful channel to gain impressions and connect with your target customers. Ghost kitchens can create a vast online presence by partnering with influencers with a substantial following.
8. Use Geo-Targeted Ads
★ Strategy to reduce your ghost kitchen costs
Geo-tagged ads allow businesses to use online channels to position themselves and their customers in the same place on the map. Therefore, the companies reach the local customers using customised advertisements.
9. Keep Your Overhead Costs Consistent
★ Strategy to reduce your ghost kitchen costs
Ghost kitchen owners should invest in modern food management systems to increase profitability. Typically, the food management systems help track inventory and keep a record of sales and expenses.
Besides, the software solutions help track ordering patterns so you can control inventory appropriately. Ghost kitchens can forecast demand and stock correctly to ensure they do not under or overstock inventory.
Therefore, set the record straight by investing in accounting software. Using the accounting software will seal loopholes and ensure proper recording of expenses. Thus, you can follow the overhead costs, which also paves the way for reducing the related expenses.
10. Work With Food Wholesalers
★ Strategy to reduce your ghost kitchen costs
To turn a ghost kitchen into a profitable business, focus on keeping food costs between 28% and 35% of your revenue.
One way to keep your ghost kitchen’s food expenses low is by purchasing food supplies from wholesale food suppliers instead of working with consumer grocery stores. Wholesalers such as US Foods and Dot Foods in North America give restaurant owners better discount rates.
11. Minimize Food Waste
★ Strategy to reduce your ghost kitchen costs
Food waste is a major factor in your overall profitability. According to Restaurant Hospitality, waste represent on average 2% to 6% of a restaurant sales.
When speaking about food waste, there are actually 2 different kinds you can reduce:
- Pre consumer waste: food wasted before it gets to the customer (during preparation)
- Post consumer waste: food wasted after it reaches the customer (e.g. leftovers)
No wonder that tracking and reducing food waste in your ghost kitchen will lead to improved profits. A few measures to implement are: use a proper refrigeration system, avoid over-ordering and practice appropriate inventory management.
12. Optimize Employee Scheduling
★ Strategy to reduce your ghost kitchen costs
Your payroll costs may be a bit too high for your liking. However, cutting staff can harm customer service and lower sales. The best strategy can be optimizing employee scheduling based on data. Look at historical demand, upcoming reservations, and weather forecasts to build the schedules you need.