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Upselling competition and results

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boatnut

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Hi all, thought I’d share results from an in-progress staff competition I put on started Oct 24, ends Dec 15.
We are a small takeout/delivery store in small town BC. YTD avg ticket is $27.42. We do approx 1250 orders a month.Last Oct thru Dec avg ticket increased 5 cents. Told the staff (all 11 of them) they would ALL get $50 cash Dec 15 if we averaged $29 per ticket. $100 cash if we hit $30 and $200 cash if we hit $31 or more.
Well, it’s been like watching a feeding frenzy!! As of today we are up to $29.74 avg. Since Friday we have averaged $31.22. Assuming a food cost of 40% (due to upsell items being high food cost like… (“and to drink?”)
I estimate I will give the bulk of the extra profit to the staff at the $29 level. At $30 I start to retain some more and at $32 it’s a gravy train for all.
I am looking more at the increase in staff moral, residual spin off due to the repetitive “self training” to upsell and my staff generating their own Christmas bonus as the true benefits to me. Thought I’d share…

Clive.
 
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Once we get into our “season” in about 30 days we do an average ticket contest every week for a month. I post week to date results for ave ticket daily. The employee with the highest average at the end of the week gets $50, 2nd prize is $30, third prize is $20. Cost is $100 a week and generates a lot of interest.

The average ticket jumps by about $5 during the contest at time when we are running about 200 orders per night. Part of that jump is the kind of visitors in town during the holidays, part is the upsell.

One thing on your costs though… they should not be 40%!! We run cost that high on things like ice cream pints that have no preperation at all in them, but other add-ons like salads, bread sticks etc are high margin items. Soft drinks are 25% cost.
 
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We only sell canned pop. Cost is 40%. Other upsells are less but used that figure as a “worst case scenario”. I have tried the individual results type competition before to little or no success. As soon as a couple of people get a lead the others give up. It seems to have motivated EVERY SINGLE employee to upsell. I’ve even heard the cooks bitchin to the phone people :" Not many orders with extra cheese tonight", "why is there no bacon on this " etc etc lol…
 
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bodegahwy:
The employee with the highest average at the end of the week gets $50, 2nd prize is $30, third prize is $20.
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I’ve thought about this in the past. How do you handle the employee who just happened to answer the phone when the football coach calls ordering $300 worth of food? Or the employee who happens to ring up the customer who only orders a $1.39 drink?

Both of those scenarios dramtically influence the ticket “average”.
 
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With our pos, we can set the parameters for which orders will be included in figuring average ticket. We may exclude orders less than $5 or orders higher than $60. This way an employee is not “punished” for ringing up a soda or “unjustly rewarded” for ringing up the 25 pie order.
 
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That is the deal with this . Every employee is involved, every day, every order, every time.
I dont know about everybody else, but I pay my "good " employees a higher hourly wage thus rewarding them every day. The more “average” employee seems to get elevated to “good” by this program. I think I will somehow keep this thing going…
 
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“I’ve thought about this in the past. How do you handle the employee who just happened to answer the phone when the football coach calls ordering $300 worth of food? Or the employee who happens to ring up the customer who only orders a $1.39 drink?”

We set our report parameters to exclude orders below $10 and above $150. We get a lot of $60-$80 orders and those are the ones where upselling can really pay off. If someone is ordering 4 large fancy pizzas for $100, they will often add salad as well if asked. With four large pies, that is probably going to be 2-4 family size salads… another $25-$50.

We also sell canned sodas. Our cost is 29 cents. We sell them for $1.10 for delivery. A cold can of soda brought to your door does not have to cost what it does in the soda machine at the gas station. 26% cost.
 
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I like the way that boatnut is doing it - where the reward is for everyone.

IMO, it is impossible to administer this fairly and with it’s intended purpose. Giving the reward to the person with the highest ticket average really has nothing to do with rewarding upselling, and has everything to do with the luck of answering the phone the most when the biggest orders call. Again, IMO.
 
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I am a HUGE fan of incentive-based compensation. Incentive pay means that an employee is rewarded for doing what they are supposed to do rather than corrected for falling short. When they do better than average, they are compensated better than average. I big bonus is that you don’t need to preach any more about upselling and offering additional items to enhance the meal. Employees do it on their own!

Any type of incentive plan is a good one. The challenge is coming up with the best plan for your business. If the average ticket plan won’t work, how about rewarding for upselling a specific item? Kameron Karrington and Big Dave are HUGE advocates of a simple phrase like “extra cheese on that?” It can work wonders for your business and can even improve customer service and satisfaction.

Some restaurants like to rotate the incentive items each week. This week it may be bread sticks. Next week it may be a dessert pizza or a family salad.

One more thing - You MUST tell the employees exactly what to say, when to say it and how to say it. This gets everyone using the same technique and maximizes the effectiveness.
 
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I like the group initiative plan as well. Really, the only way any of us will survive and truly thrive is if we have a team of individuals who come together and work toward a common goal, becoming far more than the sum of the parts. The plan of having a group goal and incentive reinforces your value in teamwork. Sure, adding a personal incentive as well will keep the average from becoming lazy and letting the stars carry the load.

Fro example: Everyone who reaches X personal goal gets to share in the team reward for reaching the team goal. Sure, it is complicated dynamics, but worth working towards when we get more than two employees again 🙂
 
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“Giving the reward to the person with the highest ticket average really has nothing to do with rewarding upselling, and has everything to do with the luck of answering the phone the most when the biggest orders call”

For a single shift you would be right. When you look at a full week those things average out. We run the ave sale report EVERY week and EVERY month and have for 10 years. I can tell you that the same employees are on top and bottom of the list every time. It is not luck.

If this were the only incentive our employees have I would agree with the comments about team work etc. It is not the only one we do as it is only a small part of making a store run well. In a slow month our total incentive related pay is about $1000-$1200. During the bigger winter months it is $2500 to $3500. Other incentives are tied to different things.

With the goal of an average ticket increase, the challenge is to get employees to think about it and to provide training on how to do it well. A small prize raises visibility. The employees find the contest fun. No bad feelings are created when there is only $50 at stake.

Rewarding your stars above the others is fine. We all know that our best employees are worth twice what our average employees are but we pay them 10% more. I have no problem with the stars getting the bonuses. Over the years it has led to some interesting discussions with employees who got smaller bonuses.
 
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bodegahwy:
For a single shift you would be right. When you look at a full week those things average out. We run the ave sale report EVERY week and EVERY month and have for 10 years. I can tell you that the same employees are on top and bottom of the list every time. It is not luck.
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This is what defines them as “stars”, no? Or the other way around . . .being stars is about excelling and a part of who they are. They will excel at everything.

Really, our most basic goal as owners is to find a way to generate more sales dollars by getting our sales staff motivated. Whether the same people get the incentives each time, or different ones . . . effective programs make the sales go up and we get more bottom line dollars in the bank. The other incentives to the employees are behavioral reinforcers and ways of giving back to the staff for their efforts.
 
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Ok everybody, just to throw a different tilt on the discussion, how about this as a theory…
Sure, my averages have been impacted by my sales competition… However, lets suppose I had two kinds of customers. Customer “A” was barely affording ordering from us as we are WAY more money than “the other guy”.They ordered from us because they like good pizza. That customer ordered the basic Pepperoni and no extras. They don’t call anymore. They know there is a “S**T storm comin” and have reduced thier spending. Customer “B” (mostly new customer") used to hire a babysitter, drive into town, go out for supper, go to a movie and drive home . They now stay home, rent a movie, buy a bottle of wine and order “cheap to them” loaded pizzas. Things that make you go hmmm…
I am SO close to upping my prices based on this. Truth is the only reason I havn’t is because of that stack of 1,500 shiny colour menus over there in the corner.
Our average ticket last night was $33.42 . I find it hard to believe that my staff are such good salespeople they can increase our avg ticket by over 20%?
Anybody else agree with this theory?
 
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We certainly are seeing the same thing. We are in a resort town with expensive restaurants. Even through we are pretty expensive as pizza places go, we are an innexpensive alternative to dining out. We have done well be adding very unique combinations to our menu that the other guys can not duplicate and for which there is no price comparison. These combinations mostly price out as 6-9 topping pies and cost $25+ each for a 16" pie. While the visitor is still treating themselves to a vacation, they are looking to save some $$ on other things while they are here.
 
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boatnut:
Our average ticket last night was $33.42 . I find it hard to believe that my staff are such good salespeople they can increase our avg ticket by over 20%?
Anybody else agree with this theory?
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You might be surprised at the results if you coach your staff to upsell product, stick a little motivation behind it and let it run. When I worked at the hut the rule was to keep upselling until the customer said “No”. This did result in a significant increase in sales and since we stopped on the first no the customer didn’t feel pestered. Even if you increased average ticket only 5 or 10% there’s nothing to lose but a little time to coach your employee’s in upselling.

PM07
 
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Another way to structure the contest is for “most sides/appetizers/drinks” sold. Your POS should be able to report this. This eliminates the one ticket of $500 issue.

There is no way to make the playing field completely fair, but as bodegahwy said, over time your best employees will always be at the top.

I really do not like the idea of rewarding “everyone” for achieving a goal because we all know there will be slackers who contribute little or nothing. Your motivated employees should be rewarded for their exceptional efforts. After all, this is how we are rewarded as owners.
 
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pizzapirate:
I really do not like the idea of rewarding “everyone” for achieving a goal because we all know there will be slackers who contribute little or nothing. Your motivated employees should be rewarded for their exceptional efforts. After all, this is how we are rewarded as owners.
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I agree to a point about individual incentives and rewards for performance. AND I also know that my stars do not perform in a vacuum. They/we cannot succeed at all without a team efficiency. That’s why I build group goals with participation in group rewards based on personal contribution levels. The stars get more shares of the group reward than those who do nothing. Anyone meeting basic performance levels get some piece of the pie. Those who don’t meet the basic performance get performance conferences and coaching to move them up in performance or out the door. I keep the focus on individual contribution to the group effort . . . Vince Lombardi said"

“People who work together will win, whether it be against complex football defences, or the problems of modern society.â€

“The way a team plays as a whole determines its success. You may have the greatest bunch of individual stars in the world, but if they don’t play together, the club won’t be worth a dime.â€

“The achievements of an organization are the results of the combined effort of each individual.â€

“Individual commitment to a group effort – that is what makes a team work, a company work, a society work, a civilization work.â€

Group goals AND individual performance rewards.
 
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