Impactful Field Audit Questions: Is Staff Upselling?

By January 21, 2016Field Audits

Fotolia_48470355_XSThis article is part of our series about impactful field audit questions.With this series, we connect the dots between individual questions in an audit and their concrete measurable impact on the franchisee’s performance. We shouldn’t forget that one of the true goals of a franchisee field audit is to improve unit-level economics. Although seemingly innocuous, these questions have a direct impact on performance.

Question: “Is staff suggesting an upsell or cross-sell?”

This is a great question to have in a field audit as it is easy to observe and has an obvious impact on the franchisee’s sales. By simply asking one extra question when customers make their purchase or place their order, staff can have a significant impact on the daily sales.

It is obvious that this behaviour is desirable, but changing the behaviour of under-performing franchisees can be challenging. A good field audit program will aggregate data from all visits and allow the franchisor to segment their results based on certain groups. By leveraging this data, one can easily see that the top performers upsell more often (and thus are more often in compliance with this question) than the system’s under-performers. Another way to evaluate a location’s effectiveness in upselling is to compare the average check size between locations: this eliminates discrepancies due to some units being in higher-traffic sites.

This analysis is powerful because it extracts key insights from field visits and gives the franchisor strong arguments to ensure compliance to all standards.

In full-service restaurants, you’ll also find this:

Related question is “Are servers offering another beverage to customers during their meals?”

By paying extra attention to customers and being proactive, one increases the likelihood of additional sales. Furthermore, non-compliance to this question can be a symptom of under-staffing. Yes, understaffing reduces the labour costs but it comes at the expense of the customer experience. Consistently exceptional customer service is key to the long term viability of the business.

Concrete examples are very franchise specific, but assume a location generating $450,000 in sales with an average transaction value of $15.00. This translates to 30,000 transactions per year. Should staff be able to upsell an additional $5.00 item (one extra drink, etc.) to one out of every 5 customers, this adds $30,000 to the top line, a 6.67% increase which is substantial given the slim profit margins in today’s economy.

Moreover, should this improvement be applicable to the whole network, an average franchise system of 275 locations would receive $577,500 more in royalties that year, assuming a 7% royalty rate. That’s equivalent to adding over 18 new units! Additionally, because the locations are now more profitable, a virtuous cycle is created and new units are easier to sell. Inciting front-line staff being a tiny bit more proactive can have a dramatic impact.

 



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