Sales, Transactions, and ACA

In the realm of business, sales are indispensable, and Lee’s Sandwiches is no exception to this imperative.

As we delve into this presentation, you’ll discover strategies aimed at enhancing sales growth, boosting transaction numbers, and elevating average check amounts for each Lee’s Sandwiches store.

Our goals for this portion of the presentation

1. Increased the amount of daily transactions per store.
2. Increase the Average Check Amount for each transaction.
3. Increased in overall sales

Daily Transactions Amount

The potential for a heightened volume of daily transactions extends beyond the sheer number of customers visiting your Lee’s store each day. It hinges significantly on your ability to efficiently serve customers and maximize transactional capacity.

Simply put, having more customers visit your store is inconsequential if the store cannot efficiently serve them or capture the transactions effectively.

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Problems that lead to plateau in daily amount of transactions observed in my store back in 2023

• Balking

  Consider this scenario: your customers visit the Drive-Through for a quick bite during their 30-minute lunch breaks. With 3 cars already in line, each taking 5 minutes, they face a 15-minute wait before being served. After 5 more minutes of service, they’re left with only 10 minutes to enjoy Lee’s 10-inch baguettes.

  Faced with such situations, customers often opt to change their plans and seek another location that better aligns with their time constraints. This presents a potential loss in transactions and sales for your Lee’s location.

• Low Customer Retention

  The erosion of customer retention not only hampers the potential for repeat business but also poses a direct threat to overall sales.

Things to consider with these problems

In the context of ‘balking,’ various factors contribute to this phenomenon, including:

• Slow speed-of-service
• Ineffective staffing or delegation
• Inefficient food preparation and inventory control

A low level of customer retention is frequently indicative of underlying internal issues, including:

• Poor in Customer complains management
• Dissatisfied visits
• Employee behavior issues

Addressing these concerns early on is crucial, as prolonged neglect may pose a challenge to sales and transactions growth, especially considering the potential exhaustion of the local market for new customers.

The presentation will cover these issues in further sections.

Average Check Amount (ACA)

Vital to your business strategy is the focus on increasing ACA. Your stores’ ACA is indicative of:

• The spending value of your customers
• The efficiency of your store operation
• The success of your brand’s image
• The perceived value of your product offerings

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Problems that lead to plateau or decrease in ACA

Ineffective Combos offering

At Lee’s Sandwiches, I have observed that a significant portion of our customers prefer A-La-Carte items over our current combos. Admittedly, the combos available are somewhat limited and may not provide the value our customers seek. Typically, these combos include:

The breakfast combo offerings are very successful. The offers are simple, and valuable. The success of this type of combo offering should be utilized. Regarding soft drinks, it’s essential to highlight that, at my store, we faced challenges with the CO2 system, rendering the soda machine non-functional. This forced our baristas to resort to using bottled soft drinks as a substitute. Unfortunately, this method proved ineffective on several fronts – from ordering logistics and increased costs to reduced efficacy and compromised drink quality. Comparing the popularity of A-La-Carte items to combo purchases reveals a clear opportunity for improvement. Addressing these concerns and exploring ways to enhance our combo offerings is crucial to not only meet but exceed customer expectations.

Not focusing on upselling

Low ACA can be an indication of not upselling. Even though Lee’s Sandwiches has an upselling policy for cashiers, it is hardly ever done or enforced due to lack of direction on upselling and training for cashiers. Not focusing on upselling will leave available profit on the table untouched.

Ineffective Voids/Refund control

Voids or refunds are lost opportunities. These can be indications of problems such as high complains, poor service or food quality, ineffective training for team members, or possible fraudulent activities. The processes of voids and refund are also often time-costly, and will have a negative impact on your ACA.

Voids are a frequent occurrence in the Drive-Through, as payment is processed after the order is sent for food preparation. Unfortunately, voiding an order halts the sale, creating opportunities for theft. An employee might accept cash from a customer, void the order, and pocket the cash. Despite requiring the person-in-charge’s (PIC) authorization (supervisor, assistant manager, or manager), employees may memorize the manager’s number for void authorization. We’ll delve into authorization safety later in the presentation, but it’s crucial to acknowledge that even those in charge can engage in theft. Additionally, the Speed-of-Service at the Drive-Through, a critical factor for sales growth (discussed later), is compromised by voids or refunds requiring PIC authorization, consuming considerable time for a single transaction. Since payment occurs after the order is sent, there’s a substantial risk of product waste, negatively impacting food cost and inventory.

Refunds, akin to voids, occur across various channels – inside the store, Drive-Through, or online orders. They signal potential issues such as operational inefficiencies, service quality problems, customer dissatisfaction, management challenges, or even fraudulent activities. Understanding and addressing the root causes of refunds are essential for maintaining operational excellence and ensuring customer satisfaction across all service channels.

Improper coupons/discount usage

Encouraging customer loyalty through the provision of coupons or discounts is a wonderful strategy to both cultivate customer appreciation and offer savings. Yet, instances of improper coupon or discount usage, like unauthorized employee or senior discounts, may raise concerns about potential fraudulent activities. Not only do these instances hinder customers from enjoying the intended savings, but they also disrupt efforts in building and maintaining customer loyalty. Addressing and correcting these behaviors becomes essential to mitigate revenue loss and sustain a positive relationship with our valued customers.

Things to consider with these problems

Combo offerings

Combos play a crucial role in enhancing the customer experience at Lee’s Sandwiches. By strategically pairing our most beloved food items with complementary beverages, we not only provide a convenient ordering process but also offer enticing savings that create a welcoming environment for customers to return. Considering the nomenclature used for #1 and #11 as “Combination” and “Special Combination,” respectively, at Lee’s, I suggest adopting the term “meals” when referring to these offerings in English. This adjustment aims to eliminate potential confusion and align with our commitment to clarity in communication.

It’s noteworthy that in the Vietnamese context, where #1 and #11 sandwiches are identified as “Thịt Nguội” and “Đặc Biệt,” we should maintain the term “Combos” when discussing these offerings. This linguistic consistency is essential, as most Vietnamese shoppers at Lee’s Sandwiches readily recognize and understand the term “combos.”

Our coffee has established itself as a customer favorite, and it only makes sense to make it the default. Number one MEAL means

💡 1 Combo sandwich + 1 reg iced/hot coffee

and so on (#5, #6, #11, etc). This not only simplifies the ordering process but also allows customers the flexibility to customize their coffee by adjusting the size or type (filtered instead of milk) for a corresponding price adjustment. This type of combo offering (or MEALS) is similar to the current breakfast combos offered by Lee’s Sandwiches. In keeping with the successful model of Lee’s current breakfast combos, this type of combo offering, or “MEALS,” strikes a balance between simplicity and versatility. Customers are also provided with the option to upgrade to alternative beverages like smoothies, milk tea, fruit tea, or regular tea, instead of coffee, with price adjustments tailored accordingly. This approach to combo offerings, while simple and easily enforceable, opens up a myriad of opportunities for upselling, contributing to increased customer satisfaction, providing additional value, and ultimately leading to higher ACA. It aligns seamlessly with our commitment to enhancing the overall dining experience at Lee’s Sandwiches.

Upselling

Emphasizing upselling is pivotal for maximizing revenue potential in each transaction. Upon establishing a more robust combo/meal offerings system, it is imperative to closely track the percentage of transactions involving combos/meals compared to the total daily transactions. Setting a daily target for each store, say 65%, allows us to precisely gauge the performance of our combo offerings as a means of upselling. This data-driven approach enables us to take informed actions to enhance the upselling strategy at each store. In addition to combo offerings, we should closely monitor specific items that should be recommended to every customer in every transaction. These key items, such as

• LARGE beverages
• Egg rolls
• Wings
• Nuggets

play a vital role in upselling and enhancing the overall customer experience. Similar to combo offerings, the focus should be on monitoring the percentage of transactions involving these key items, and a daily total percentage goal should be set for each store. This targeted approach ensures that these items are consistently offered to every customer in every transaction, contributing to a well-rounded upselling strategy.

It’s important to note that the emphasis here is on comparing the percentage in TRANSACTIONS, not SALES DOLLAR AMOUNT. This distinction allows us to specifically track the inclusion of these items in every customer’s order, regardless of the total sales amount. This approach aligns with our goal of ensuring these key items are consistently offered to maximize upselling opportunities.

Role of cashiers

• Cashiers must offer combos with large beverages and a few key items with every customers and in every transactions.
• Managers and trainers must demonstrate how to properly upsell, set expectations, recognize good performance, and hold team member accountable.

An example of a cashier/customer dialogue

Cashier: Good morning m’am, welcome to Lee’s. How may I assist you today?

Customer: Good Morning. I would like a number #11 please.

Cashier: Would you like everything that comes on number #11 Special Combination?

Customer: Hold the onion please.

Cashier: I understand! I personally don’t like onion either. Would you like to make that a MEAL?

Customer: yes please!

Cashier: with the LARGE iced coffee?

Customer: only crushed ice please!

Cashier: Anything else I can get you this morning m’am?

Customer: No, thank you!

Cashier: How about some egg rolls or chicken nuggets? They are freshly and goldenly fried!

Customer: sure, get me a pack of 5 vegetable egg rolls!

Avoid voids and refunds

Voids

Effective void prevention begins with well-trained cashiers who skillfully engage customers with targeted questions. Cashiers should inquire about specific preferences, such as whether customers want all components on their sandwiches, if they prefer veggies on the side, and, importantly, if they would like to upgrade to a MEAL. These questions not only present upsell opportunities but also help minimize confusion during the ordering process. For PICs, the authorization of voids requires a careful approach. PICs should pose verifying questions to ensure the legitimacy of void requests. It’s imperative for the company to establish a process that hinders cashiers from memorizing and using PIC numbers for unauthorized voids. Implementing a system where voids exceeding a certain threshold (e.g., $200) trigger thorough investigations is essential. Establishing a daily goal for void amounts (e.g., under $50) provides a measurable target for each store. Regular monitoring of store performance is crucial, and immediate actions should be taken when necessary to address any irregularities in void transactions. This proactive approach ensures a secure and efficient ordering process, minimizing the risk of unauthorized voids and promoting overall operational integrity.

Refunds

For refunds exceeding $5, the approval of the General Manager should be mandatory. The store's General Manager or Acting General Manager must conduct daily reviews of all refunds, accompanied by receipts, to meticulously verify any discrepancies. The refund receipt should include a detailed reason for the refund and bear the signature of the PIC who authorized it. Refunds must always be processed in the physical presence of the customer who requested the refund (except for online order refunds). Any refunds provided without the customer's presence must be treated as a violation of the company's policy, prompting a thorough investigation. Establishing a clear guideline for PICs is crucial to ensure consistency in refund decisions. This guideline should distinctly outline the circumstances under which a refund is deemed appropriate, preventing any confusion or inconsistency in refund practices. Regularly monitoring the reasons for refunds serves as a valuable tool to identify areas of opportunity for minimizing refunds in the future. This proactive approach enables the company to address underlying issues, enhance operational efficiency, and uphold a high standard of customer service.

Coupons usage management

To ensure operational efficiency, it is essential for each cashier to have a designated cashier's envelope for every shift worked at the register, as further detailed in the subsequent section of this report. All physical coupons, a topic to be covered later, should be securely stored within this envelope, facilitating streamlined verification processes. In standardizing discount practices, it is recommended to establish a maximum value of $1 for senior or service discounts. The application of discounts should be contingent on explicit customer requests before the order is tendered, discouraging automatic discount application. Please note that cashiers should always provide the discounts when asked by customers and NEVER ASK FOR THEIR IDs. For heightened transparency and accuracy, regular monitoring and audits of coupons and discounts usage are suggested. This systematic approach enables the identification of any discrepancies, ensuring a fair and consistent application of discounts throughout operational procedures.