From Lemons to G&T's - Re-thinking your pricing
This is the first of 2 blogs in our From Lemons to G&T’s series - where we look at taking the lemons we’ve been handed with COVID-19, trade smartly during restrictions, and use those lemons in our well deserved gin and tonics at the end of it.
Re-thinking your pricing
With contactless pickup and delivery our only current options, we’re going to incur some extra costs to provide our delicious treats to the hungry masses. Let’s think about some of those costs and make sure we adjust our prices accordingly.
Delivery
Have a medium to long term mindset.
If you are investing in delivery options and it’s a pivot to your normal service. Invest with the mindset that some form of restriction will be with us for at least the medium term, and possibly up to 2 years. Don’t go half-arsed into the night, good friends; Plan your solution properly so it can stick for a while.
Weigh up the pros and cons of your delivery solutions .
For delivery, do you strike out on your own, hiring team members back as drivers or go for the local established delivery company. Here’s some pros and cons to think on.
The DIY model Pros:
You’ll be increasing employment opportunities.
It will likely cost less.
You’re in charge and responsible for success (and managing failure).
Cons:
You’ll need a strong handle on health and safety requirements and compliance.
What might be involved in driver insurance?
Will you need to rent cars?
You’re in charge and responsible for success (and managing failure - complaint handling etc). Do you have the time?
The established delivery company model Pros:
You hand over responsibility of handling the health and safety aspects and insurance over to the professionals.
Less time managing an extra arm of your business, allowing you to focus on what you do best.
Cons:
It can be spendy.
Will your customers accept the raise in sales price needed?
You may not be able to hire your whole team back with reduced income levels.
You may still be responsible for the delivery company’s failures.
Transaction fees
Flexibility of your solution
Regardless of your choice of payment provider, you are likely to see a sharp increase in transaction fees for providing e-commerce payments on credit cards. Try to select a solution that allows you to still use your terminal for contactless/Tap & Go payments where possible.
The fee payment method
Another wee trick to be aware of is how you are being charged your transaction fees. Most of you will know the method of being paid the full amount and paying back the fees. This way is more cumbersome but you are keenly aware of just how much you are being charged.
Most e-commerce payment providers charge differently. They take out the fees before sending you the money (and breakdowns of the exact charges might take a bit of searching). It’s less of a hassle but sometimes being blissfully unaware of your actual costs is a concern.
To Conclude
Spend the time to understand how your solution works and keep everything in mind when looking at your pricing and profits.
Takeaway Packaging?
Right now is the ideal time to review your takeaway and delivery packaging. A couple of points to consider…
Support local and sustainable
We are asking our customers to do it, so why not lead by example and do it ourselves. There are some great local companies providing amazing and well thought-out packaging options. The best of them will provide you and your customers with guidance on how to use and dispose of the packaging in the most sustainable way. Check out some examples at Ecoware and Innocent Packaging.
Keep it lean
Provide your customers with the least amount of waste possible. If you can find multi-purpose packaging with different sections in one package, it’s much better than using two. Also, offer cutlery and napkins as an optional extra, especially for delivery where your customers have all they need at home.
Takeaway Packaging Portion Sizes
Presentation is key
Have a think about what from your menu works best in a takeaway box and focus on those items for your pick up and delivery menu. Remove items that simply won’t make the presentability cut. Serving an amazing plate is worlds apart from what a dish looks like when the customer opens it 20 mins later. And finally, assess if this will add cost to those dishes you can serve.
Less is sometimes more
Think less is more when it comes to your new, containerised portions. Like we mentioned before, use one container for multiple items where possible. You may save on cost and not have to increase price points if you nail both presentation and portion size.
Embrace Technology
Tech is your friend at this point in time. What your customers may have struggled to accept in the past may be what they all rush towards today. It’s a different world and use all the tools at your disposal to help you streamline your services and make you profit.
We are still offering the Safe Hands Initiative to help hospo operators (like you) trade during the restrictions in place for COVID-19. New Zealand will finish up with Safe Hands on 21/07/20. If you’re in Australia and not on it already, reach out for a chat.