restaurant business tips: How to revive your struggling cloud kitchen business?
Despite increased growth, some cloud kitchens are still struggling to compete in this competitive market. They are constantly experiencing declines in sales and profits while facing multiple challenges in running the cloud kitchen business.
Challenges for cloud kitchens
It typically takes six to nine months for a cloud kitchen to be successful in its zone of operation, and this depends on factors such as location, menu, food quality and price. However, the Cloud Kitchen struggles in the area of visibility as they have no dining options leaving them in an area where they get very little recognition. In some cases, the brands have no direct access to customers and no direct delivery options. Furthermore, the main reasons why cloud kitchens are struggling are a lack of SOPs (Standard Operating Procedures), high commissions to third parties, reduced margins and inconsistencies in operations. Since the cloud kitchen concept is new and mostly owner-managed, there is not enough trained staff available in this area, which represents a great business challenge to look forward to.
Transform with the use of technology
Ease of ordering online is already becoming the norm. However, customers must be offered a digital multi-channel ordering experience via applications and websites. Integration with grocery delivery brands is also a way to simplify delivery operations. A cloud kitchen can receive orders from different channels, and to centrally manage the orders and reduce manual errors, a point-of-sale (POS) system can be implemented. The data collected by the system can be used to develop personalized offers and customer retention strategies.
Tracking services must be an integral part of the cloud kitchen as the customer expects to receive their order at the promised time. The existing system needs to be efficiently streamlined by using technology for the fast-paced environment where orders take 10-12 minutes to prepare. The incorporation of new-age technology not only allows us to save time, effort and money, but also enables the scope of process optimization. In addition, the person responsible for handling the order calls can provide a personalized experience, upsell and collect valuable feedback, which can significantly increase customer acquisition.
Customer feedback is important
Entrepreneurs need to understand the relevance of online customer reviews as they perform the function similar to word of mouth. Positive reviews can not only improve cloud kitchen reputation, but also boost sales. Due to the importance of digitization, customers tend to do their primary research online before considering any service from a restaurant, and positive testimonials can confirm that the food is delicious, nutritious and safely prepared. Therefore, an active online presence with excellent feedback can make cloud kitchen business a success. Reviews can drive traffic to the brand’s website, and feedback can help improve troublesome areas of the business.
Customers typically trust search engine ratings or third-party food delivery apps to make choices when ordering food. In order to gain a competitive advantage, companies can connect with influencers who, with their enormous reach, play an important role in promoting a company on social media. Cloud kitchen companies can formulate a good evaluation of them in exchange for some beneficiaries under an exchange system. Finally, the business owners can also contact customers and ask them to leave a review as feedback to make them feel cared for and prioritized, which significantly retains customers over a longer period of time.
Get to know the competence group and then try something new
In order to make an impression on the market, the cloud kitchen has to stand out from the competition. Kitchens can create their own unique selling propositions while keeping customer requirements in mind. A concrete option is to analyze the performance of the dishes and diversify them according to the customer’s preferences (healthy, junk, packaged food, etc.). Removing underperforming foods is also necessary to sustain ongoing growth, along with listening to customer feedback and adjusting the menu accordingly. Including dishes that are local and popular rather than on the competitor’s menu is a profitable strategy.
Trying out social media advertising is also a notable tactic as people spend most of their free time online and can be targeted with personalized ads.
Offerings could include a lunch box option, delivered to nearby company offices, as people living far from their families need light, low-oil and nutritious food as an alternative. In addition, combos with offers can be structured in order to win new customers and re-order existing customers. In addition, packaging can be creatively designed with quotes and mini-messages to capture customer interest. Adding some inexpensive freebies can also be part of the strategy to retain the consumer.
Everything considered
There are several types of cloud kitchen models that work efficiently in the markets such as: B. Independent, rebellious and fresh menus. The owners must decide which niche they are in and then develop appropriate plans to improve the performance of the system. Since speed is key in this business, technological innovations can be leveraged to speed up operations. The kitchen location and the menu must be analyzed regularly based on customer reactions. Also, a sufficient amount of the budget must be spent on marketing, delivery services, and application development. Ads can be placed on social media platforms for better reach.
Manpower is also an influential factor in any cloud kitchen business; Therefore, entrepreneurs need to ensure that the chefs are well trained, certified and professional as this can ensure the company’s investment is successful.
Additionally, studying and analyzing other successful cloud kitchen companies is among the best practices to improve one’s business.
(The author is the founder and director of the Academy of Pastry & Culinary Arts)