By John Matthews, founder and president of Gray Cat Enterprises Inc.
One often-overlooked strategy to generate ancillary foodservice revenues is developing a program to tap group sales.
Generating revenue through large group order sales is an excellent way to exponentially grow your business. The sale from the initial large group order is the first source of revenue generation, then residual sales orders generated from individuals within that group—followed by these same individuals placing their own group orders—can start a “snowball effect” that creates continued sales growth.
So, “Let It Snow! Let It Snow! Let It Snow!”
The key to group sales is to market your store and products as a turnkey solution for a large gathering. Finding key groups in which your products are relevant enables your retail operation to simultaneously meet the needs of all the customers in the group. The word-of-mouth discussions by these customers regarding your products will be invaluable as you look to capture a greater portion of sales in the future.
Developing a local marketing strategy is paramount to capturing “share of stomach” when it comes to large group orders. You can create your target list of groups by identifying the following in your trade area:
With a concerted effort and plan, your store can find hidden opportunities beyond the single customer transaction.
Leverage Brand Ambassadors: Group sales are the tip of the iceberg when generating overall sales. Every person who is part of a group order is also a potential group contact for other meetings in which they are involved. An excellent practice is to gather not only the group leader contact information, but also contact information on all group attendees. You may want to consider a raffle for free product, encouraging attendees to enter their business card; and as a result, you will have a larger customer database for the cost of one free product.
Create The Snowball Effect: Remember, each group sale will lead to sales down the road, so the “snowball effect” of group sales can be terrific. In addition, group sales lead to customer trial, which leads to individual purchases beyond the group.
Many of these individual customers often lead groups themselves, so the exponential impact on sales can be substantial. Once you establish a name for yourself, group sales business may flourish on referrals alone.
Increase Average Ticket: Identify every conceivable meeting and/or group organization within your three-mile trade area. These targets can range from businesses to associations to schools to seasonal party hosts to wherever five or more people are gathering. Systematically create a plan to put your store into the “buying consideration pool” for group orders. Once you have identified groups, diligently prospect them by making cold calls and appointments offering product samples and leave-behind marketing materials. Your time invested in the solicitation of group business can pay handsome dividends and drive your average ticket higher.
Improve Labor Productivity: One enormous benefit from group sales is that the majority of these orders are placed well in advance – in some cases, days in advance. A prudent manager can plan accordingly with regard to inventory and labor thus improving overall operational productivity. Group sales are a terrific way to move both the revenue higher and manage expenses lower since you are able to predict future sales more accurately. Group sales afford the opportunity to maximize output and productivity while improving your P & L.
Fill Sales Gaps: Create a year-long group sales strategy by contacting target groups and determining which of their future meetings are most appropriate for your products. You will find that making inroads with one group will lead to other group orders through their contacts. To provide an additional purchasing incentive for these groups, you may want to create quantity discounts. Lastly, group sales are a perfect way to augment slower times of the year – i.e., holidays may disrupt normal business, but may be offset by group sales.
Developing and maintaining a successful group sales program today will foster larger, long-term sales in the future. The potential of moving the revenue dial substantially is outstanding in the near term, as well as expanding your individual customer base along the way. Successful foodservice operators that create this program as one of their core local store marketing ideas set the stage for long-term growth for their store.
John Matthews, founder and president of Gray Cat Enterprises Inc., a strategic planning and marketing services firm that specializes in helping businesses grow in the restaurant, convenience and general retail industries.