With Souffle dynamic pricing software, Dishd was able to maintain consistent revenue during Ramadan despite a significant portion of their customer base fasting, resulting in the owner expanding its use to cover their other cloud kitchen locations.
Introduction
Dish’d, a virtual restaurant group operating in the UK, employs a unique business model by partnering with Halal Food Operators to increase revenue by utilizing their kitchen capacity to deliver established high-quality brands through various delivery platforms. However, as 20-30% of Dish’d virtual concepts customers observe the month of Ramadan, where customers abstain from eating and drinking from sunrise to sunset, the company faces a significant challenge. Seasonality is a crucial variable for most restaurants, and during the previous year, Dish’d experienced an anticipated 20% decline in revenue during Ramadan. In response, Dish’d sought to mitigate the impact of Ramadan on sales without increasing marketing spend and implemented Souffle Dynamic Pricing platform in one of their locations, encompassing three virtual brands, namely Bao + Bowls, Wingology, and Tex Ann, as a test case.
Souffle Dynamic Pricing Platform
Souffle is a dynamic pricing platform that provides restaurants with real-time data on demand and customer behavior. Using Souffle, Dish’d was able to analyze their historical sales data and identify their demand periods. The high demand period was between 7-9 pm, the mid-demand period was between 9-11 pm, and the low demand period was between 2-5 pm. Souffle then provided Dish’d with a unique pricing strategy to increase revenue during Ramadan.
Using Souffle on delivery platforms, Dishd was able to:
🍮 Increase Revenue by 20% during Ramadan
🍮 Increase Marketing efforts without sacrificing margins
Souffle Dynamic Pricing Strategy
During the low demand period (2-5 pm), Dish’d ran aggressive category discounts and BOGO’s on one of their best sellers.
During the mid-demand period (9-11 pm), Dish’d ran lighter promotions such as item discounts and BOGO’s on side items.
During the high demand period (7-9 pm), Souffle raised the prices of their best-selling items by 10% with a menu coverage for approximately 30% to generate incremental revenue and bring in more profit per order to help finance the marketing spend.
Customer Sentiment
Over one month, Dishd received 1,312 orders, with 344 customers leaving comments. Only 4 of these comments related to price or value, which again is in line with what Dishd normally sees at their restaurant. Mohammed, the owner of Dishd, was super pleased with the results and even expanded his use of Souffle dynamic pricing software to cover his four other cloud kitchen locations. This positive customer sentiment suggests that the use of dynamic pricing software can be a viable strategy for restaurant owners to maximize profits without negatively impacting customer satisfaction.
Outcome
The outcome of Dish’d leveraging Souffle dynamic pricing during Ramadan was a flat revenue month-on-month, despite 20-30% of their customer base not ordering meals during the day due to fasting. Dish’d was able to achieve this without exceeding their 5% of gross revenue marketing budget. Compared to delivery platforms, Souffle provides precise reporting of marketing spend. Unlike delivery platforms, Souffle takes into account the Cost of Goods Sold (food costs) when calculating promotion costs for Buy One Get One (BOGO) deals. This ensures accurate Return on Investment (ROI) metrics and prevents misleading results.Customer sentiment remained positive, with only 4 reviews related to price or value, in line with what Dish’d normally sees at their restaurant.
“I have to say, I was initially skeptical about using dynamic pricing for my cloud kitchen, especially during such a turbulent time. But Souffle exceeded my expectations by keeping my revenue consistent month over month, even when I was expecting sales to nosedive. I'm really impressed with how easy it was to use and how effective it was in maximizing profits. I would highly recommend it to any restaurant owner looking to boost their revenue."
Conclusion
Souffle the Dynamic pricing platform built for independent restaurants provides the ability for operators to adapt their pricing to changing market conditions, resulting in increased revenue, improved operations, and increased customer satisfaction. Dish’d was able to use Souffle to mitigate the impact of Ramadan on their sales and achieve a flat revenue month-on-month. This is a testament to the power of Souffle in the restaurant industry.