Joe Ray, a food and travel writer with Wired claims some of the nation’s top eateries are quietly embracing extreme data mining to maximize profits in a tough economy.
Ray claims software systems like Compeat, Hotschedules and Eatec help restaurants track complex metrics like sales trends, employee overtime, and food orders from suppliers.
“It used to be that a manager would say, That server’s great! He’s a nice guy, he shows up on time and keeps the salt shakers full,'”says Damian Mogavero, the entrepreneur behind Slingshot, a sophisticated software package that crunches sales data every night, and then serves it to managers the next morning.
“Now they can tell a server, You sell 40 percent less red wine than your peers and you work in a steakhouse!'”
Ray says the most ambitious software is Slingshot, which was designed to maximize restaurant wait staff sales efficiency.
The web-based software system is the main product of Avero, LLC, Mogavero’s 12-year-old New York-based company that tracks over $13 billion of food and beverage sales a year for 2,700 restaurants.
“In New York City, half of Zagat’s top-50 restaurants are clients, and on the Las Vegas strip, a whopping 94 percent of casino restaurants use its products.”
Mogavero, 41, began as an investment banker on Wall Street, and then joined a restaurant group as CFO in the 1990s, where he met some rising New York chefs who were struggling to keep a firm grasp on price controls.
In 2000, Mogavero utilized his Wall Street investment skills and combined his restaurant experience to establish Avero.
Ray says Mogavero approaches restaurant sales figures with a “Moneyball”mentality, analyzing the strengths and weaknesses of each server and bartender the way a baseball general manager would examine the performance percentages of his players.
“Avero’s analytical tools are a platform for maintaining consistent management goals and standards across our brands,”says Daniel Boulud, a French chef who started using Slingshot in New York City at his Michelin three-star rated Daniel, and then added it at his trendy DBGB and his new restaurants in London and Beijing.
Ray points out that in Las Vegas, since casinos had already mastered data mining in every other part of their business - how much money their croupiers were raking in and which tables, and which video poker machines were generating the most money — they can now apply Avero’s software to the restaurant end.
“It’s corporate out there. You need numbers for your ROI,”says Mogavero.
Avero recently introduced a new program called Single Server Mentoring. It finds the servers consistently performing in the bottom 10 to 20 percent and shows their boss the keys to bring them up to the restaurant’s sales average.
Mogavero claims if you apply this approach with your whole staff, revenue goes up by a percentage point, noting that such a number could be the difference between life and death in an industry that functions on razor-thin margins.
Mogavero emphasizes that for him, training servers doesn’t just mean getting them to ask if customers want fries with their meal. It’s getting the beer guy to learn how to sell a bottle of wine, or getting the vegan to sell steak fries.
Avero has grown by 20 percent a year for the last three years, and has accumulated $50 billion of sales data. This depth enables it to read trends, predict the ups and downs in the business, and help restaurants compare themselves to other similar outlets, says Mogavero.