Raise revenue without fleecing your customer

I got a $95 ticket the other day, which got me thinking about alternative revenue streams.

Here’s the back story. We have a couple of cars in the family fleet whose tabs expire in the same month. We paid for them together, with the same check, and received the new tabs for one. Blithely assuming the others were to arrive shortly, we put on the one set and forgot about the other until the ticket showed up under the wiper blade.

Please don’t assume from this that I flew into a rage and decided to take the parking monitor’s fancy rims to the nearest pawnshop. No, my reaction was one of respectful admiration—remember those cuts to Local Government Aid, back when we were told that the state could no longer afford things like police, roads and air? Well, if the state forgets to send out your tabs some of the time (not all the time, because people might figure it out), then Hennepin County can parlay that oversight into an extra hundred bucks here and there. Complain to the county—they don’t issue tabs: not their fault. Complain to the state—hey, it’s not like they gave you the ticket. Everyone’s happy but you, but your taxes are lower, so you should expect intermittent fleecings to make up the difference. Personally, I think this is brilliant.

So let’s try to drag this lesson on the virtues of cynicism from its unholy genesis in the swamp of political economy into the glorious maelstrom of free enterprise. Running a restaurant, it has often been said, has certain parallels with farming: long hours, hard work, a bunch of weird skill sets which all need to operate in harmony, and a tremendous vulnerability to outside forces that can’t be controlled. Farmers compensate when they can with crop insurance and jobs in town. What does a restaurant do when its primary source of revenue begins to dry up?

I’m not going to suggest that you try to fleece your regular customers. It’s much easier to change restaurants than it is to change states, or even counties, and governments are notably more indifferent to bad karma than businesses. There are, however, ways of bringing in revenue from alternative sources that won’t be embarrassing to explain to St. Peter, should he happen to ask.

First a little teacherly admonition: do you know where your money comes from in the first place? Do you know what sells, and when? Do you know what your food/liquor ratio is? Of course you do—but do you know if it’s different on Tuesday than on Friday? What keeps your afternoons alive? What always sells well right before closing (and does it pay the cost of keeping the cooks around)?

That’s all back-o’-house stuff you should know from your POS system. The POS can help you with the front, too, if you’ve asked the right questions. Where do your customers live and work? How long do they spend in your seats? Do they know how to tip? Do they understand wine, or care to? Where else do they eat? And your human POS systems can answer the most important question about your customers: Are they happy?

If your snapshot bears some resemblance to objective reality (an often disused and derided phenomenon, but one which I am convinced maintains an occasional relevance), then you will have a few glimmerings of your next steps. Casual-dining houses, which have been smacked pretty hard of late, see a few bright spots in their curbside-to-go business. Back this up a few years to the decisions that led to it, you’ll find that they were noticing that their customers were increasingly time-pressed, which presented an opportunity. A snide observer might opine that people will only settle for mediocre food when pressed for time, but we’ll let that go.

So: what kind of business do you have? What fits your (avoid b- word here) sense of who you are? If you run a Greek place, I wouldn’t try to sell those cool Mescal popsicles with the worm in them, but if you’ve got a cantina, why not make six extra bucks off something that will generate great buzz—and stay stable in the freezer for a month? If you bake your own bread and you operate near a bunch of small businesses, why not take a loaf and some cool spreads and a catering menu to every receptionist within a mile? If you’re downtown near eight giant office towers with people who eat at their desks, why not make a Web-based menu and offer guaranteed pickup times or delivery?

Or you could do what one amazing waiter did at a fine-dining restaurant I once worked in. We served a fixed-price menu with five courses, including an appetizer; but occasionally we had a special app at an extra cost, and when it was Beluga caviar—priced at 35 bucks a pop in 1983—this guy was the only one who could sell it. I asked him how he did it, and he just laughed. “They ask me what the appetizer is, and I say Beluga caviar. They say great, we’ll both have it.”

I was puzzled. “Do you mention that it’s an extra charge?”

“Are you crazy? They’d never order it then.”

I understand that he now works for the state. Be warned.