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© 2019 Yumpingo Ltd

Empowering profitable decision-making: how a single data-driven change delivered 6x ROI

Appendix and methodology

The conundrum:

Data gathered through Yumpingo over 2018 revealed that some starters and side dishes were underperforming in terms of customers’ perceptions of value for money.

 

The solution:

On the basis of these insights, Rosa’s took the decision to reduce the prices of half of their starters and two-thirds of their side dishes, by up to -12.5% (-55p per dish).

 

The rationale:

Cutting prices would create more satisfied customers who would be more likely to order more, return in future and recommend Rosa’s to others, boosting overall sales.

 

The results:

Rosa’s saw changes in customer spending behaviour which achieved (6 weeks post-change vs. pre-change) significant results.

 

*The following figures have been adjusted to exclude the impact of extra sales from increased footfall, so results can be directly attributed to price changes only.

 

5%* net sales increase

  • This uplift was worth an extra £37,000* in revenue across their 14 sites, when comparing the two six week periods before and after price changes...

  • ...which delivered a 6x ROI on use of Yumpingo’s services over the six week period post-changes

 

13%* increase in unit sales of price-reduced dishes compared to +2%* on rest of menu

  • This is just under 3,000* extra starters and sides sold due to the minor price tweaks...

  • ...delivering a 6%* revenue increase from these price-reduced dishes alone

 

7%* more guests ordering from both starters and sides  

  • This was driven by an additional 3 people per 100 guests* ordering from each category (moving from 39 to 42 Starters ordered per 100 guests, and from 35 to 38 Sides ordered per 100 guests)...

  • GP in price-reduced dishes remained above XXX%
     

16% increase of customers’ perceived value of price-reduced dishes

  • This is an average 12 point increase from 73 to 85 points out of 100...

  • ...and those with the biggest price changes saw up to a 53% perceived value score increase of up to 30 points out of 100

 

5% increase in overall Yumpingo food satisfaction scores of price-reduced dishes

  • This was an average 4-point increase…

  • ..with some dishes seeing an increases of up to 10 points (13%)...

  • ...lifting the average food score (across the whole Rosa’s Thai Cafe menu) rose from 89 to 92

 

5%* additional drink sales revenue

  • This uplift equates to a £12,000 rise in extra beverage sales across the group

 

In addition to the above increases - linked directly to the price reductions made - Rosa's pricing strategy decision inputted to further impressive metrics:

 

3.3% rise in average spend per head (ASPH)

  • With more dishes and drinks ordered, the ASPH jumped to £15.14 from £14.66

 

12% increase in Net Promoter Score (NPS)

  • Between the 2 specific six week periods reviewed for this case study, NPS rose from 66 to 74...

  • … on top of NPS having climbed continuously from August 2018 onwards (when Yumpingo was rolled-out fully across the group).

 

Jump in average annual like-for-like sales

  • In the six week period prior to the price amendments, annual like-for-like sales were tracking at average +2% for the group....

  • ...in the period following price changes, this jumped to average +10% across the six week period, reaching as high as +17% in the week immediately following the changes.

 

 

Methodology:

Figures cover sales mix data and Yumpingo scores for two six-week time periods (pre- and post-price changes) in Q4 2018 across all 14 Rosa’s Thai Cafe sites. Dine-in data only, excluding takeaway and delivery.

The £122k net sales increase can be attributed to higher average spend per head and increased footfall (up 8%) as a result of all the changes Rosa’s made in aggregate.

In order to create an accurate comparison for the data relating to the specific decision to cut prices on some starters and sides, figures have been adjusted to exclude the expected sales generated by increased footfall (projected using the established average spend and purchasing behaviour from the first six week period). Figures used throughout can therefore be attributed to price changes alone. There were no other significant changes to recipes, portion sizes, or menu descriptions during the time periods examined. Desserts & drinks were relocated from the placemat-style main menu placed on a standalone hand-out menu.

Yearly like-for-like sales data was collected from the seven mature sites with annual data available and compared with equivalent dates in the previous year.

In the past 6 months Yumpingo has collected 49,120 in-moment customer reviews with 267,804 food and service responses.

Comparing NPS scores to other surveys

Net Promoter Score (NPS) is a standardised calculation used in many industries, however, there is not a standardised collection technique. This means that there is variability in average results seen across different studies.

 

One factor that has been observed by data research companies is that the timing of data collection relative to recency of dining impacts ratings [1]. Ratings are typically much higher when asked in close time proximity to a customer’s experience, slowly degrading over time. Therefore it is likely that Yumpingo NPS (asked immediately after eating) will trend higher than the NPS results seen in other industry reports such as Mystery Diner visits or large general population surveys.

 

NPS should therefore be compared within (and not between) different types of surveys, because variables in participant sets and data collection will affect scores.

[1] Morar HPI, 2018

 

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