Psychology of Bar Sales: Use POS Data to Decode Customer Preferences and Boost Revenue

Decoding your bar data – A treasure trove of insights

A great cloud-based bar POS system should provide you with valuable insights into your customers’ preferences. Here are a few points to consider. 

Data points to mine

Bar POS data can offer insights into the psychology behind your customers’ decisions and preferences. You can use this information to track large-scale trends and understand guests on an individual level. 

Even outdated software can (and should) include general sales reports so you can see which menu items are the most popular at certain times of the day, month, or year. However, modern bar POS systems can create customer profiles from the swipe of a credit card or when guests sign up for your establishment’s loyalty program. From there, each transaction will inform you of when–and how often–that customer visits, how much they spend, their menu preferences, and much more. 

Data visualization is key

Of course, all that data won’t be very useful if there’s no way to interpret it. Unlike traditional cash registers that start and end with daily sales reports, top-of-the-line POS systems typically feature user-friendly dashboards and detailed reports. 

The ability to sort data by server, zone, order type, revenue center, and more will help you translate all this information. You might find that certain staff members have a gift for upselling, specific tables tend to keep customers around longer, or you tend to get a late-night rush every Thursday. When you can see this data clearly, it’s easier to implement meaningful changes. 

Consider this… 

Bar POS systems track a wide variety of data points about each and every customer who swipes a credit card or joins a loyalty program. All this information compiles into a customer profile, where you can see transaction history, menu preferences, and habits like when they tend to visit. 

When a returning guest makes a reservation, you can scan their profile and prepare to anticipate their needs before they even walk in the door. This foresight can allow your staff to tweak bar sales strategies to the customer in a way that feels natural. In fact, customers will likely think your employees simply have exceptional memories since your staff always remembers their favorite drink.

Understanding the psychology of bar purchases

You don’t have to be a psychologist to perform a behavior analysis on your bar customers. You just need to understand their motivations. 

The power of habit

Habits allow our brains to cut corners and avoid making too many decisions. After all, it would be exhausting to weigh the pros and cons of every action we take. For example, you probably don’t think too much about where to put your keys when you walk through the door at home. There’s a good chance you simply set them on your entry table or hang them on a nearby key ring instead of wondering where you might see them best, what will happen if you’re late to work tomorrow, and so on. 

These habits carry over to the shampoo we buy, the types of pens we prefer, and, of course, the bars and restaurants we frequent. As a business owner, you can make the most of your customers’ habits to boost bar revenue. 

The customer profiles in your bar’s POS system can allow you to visualize your individual customers’ habits–when they visit, their favorite drinks, which seats they prefer, and more. By making notes of their desires, your staff can tailor the experience to each visitor, making them feel like VIP guests. When your customers feel special, choosing your establishment will feel like second nature. 

The “fear of missing out”

FOMO, or the fear of missing out, is a powerful motivator. A scarcity mindset can encourage guests to try your limited-time offers, temporary specials, and other soon-to-disappear menu items. When customers spot a “limited-edition” item, the clock starts ticking, and the pressure mounts to get it while the getting’s good. In fact, it can even trigger the desire to try something new. 

The Scarcity Principle is a well-studied economic factor behind this mindset. It tells us that low supply for an item will cause a surge in demand because consumers naturally value scarce goods more than abundant products. Tapping into your customers’ FOMO is an easy way to boost their desire for a specific menu item. 

Social influence and group dynamics

Diving deep into your bar POS data can help you understand the psychology behind your customers’ choices in different scenarios. Examine the orders of your largest parties over a week or a month and see how they compare to the choices of individuals or couples. 

You might be surprised to find that certain menu items have a crowd-pleasing effect. When big groups come in, your staff can then make suggestions based on these figures and seemingly anticipate their needs. The social dynamics of group dining can be complex, but your POS data can show you what works and what doesn’t. 

Data and personalization

Data collection is a fact of life in the 21st century. When your guests opt in to your loyalty program, they consent to hand over certain information to your business. But it’s important to remember that utilizing this information is all about crafting the ultimate customer experience, not just improving your bottom line. 

Using bar POS data to understand your customers will allow you to meet their needs on a whole new level. In fact, studies have shown that about half of all millennials who receive relevant, personalized offers are more likely to make purchases from the company who sends them. 

Finally, it’s essential to partner with a POS provider who prioritizes data security and takes proactive measures to ensure your customers’ data is safe. After all, your guests trust you with their information, and living up to their expectations is vital. 

Putting insights into action: Strategies to boost revenue

Once you have a handle on your POS system’s ability to quantify–and qualify–your guests’ decision-making processes, you’ll be ready to implement changes to boost bar revenue. Here are a few ideas to get you started. 

Targeted promotions

The wealth of information that bar POS systems accumulate can help you give your guests exactly what they desire as well as perks they didn’t know they wanted. Targeted promotions based on POS data are the ultimate way to accomplish this feat. 

When your guests sign up for your loyalty program, they’ll need to provide an email address or phone number. You can then use their transaction history to send personalized offers based on their previous purchases. 

For instance, if you have a rush on the first of the month, you might send a discount code that’s viable on that day to folks who frequently visit during that time. Do you have regulars who come in for a beer and a shot after their Wednesday shift? Send them a coupon for a free beer with their next shot to prompt them to visit. 

Menu optimization

POS data can also allow for successful bar menu optimization. Start by accurately pricing out your entire menu and ensuring your prices add up appropriately. Then, take a good, hard look at your sales, item by item, to identify underperforming drinks. While you’re at it, scan for certain items that are subject to frequent substitutions or send-backs to spot mismatched ingredients or recipes that miss the mark. 

With this information in mind, you can revamp your menu to align with customer preferences. Consider inviting your VIP customers to a drink tasting to introduce them to new menu items, promote a sense of community, and satisfy that FOMO. 

The power of bundles

When you analyze your bar’s transaction history, you’re bound to see certain trends emerge. Maybe there’s a certain locally-crafted beer that patrons tend to order along with a shot of top-shelf tequila. Or, you might find that a specific fruity cocktail is a popular choice among folks who also order your house-made guac. 

Use these tendencies to your advantage by offering strategically curated bundles. Guests are more likely to purchase when they know they’re getting a deal. If you offer, say, $1 off a beer-and-shot combo, your chances of locking in new regular customers increases. 

Happy hour hacks

Effective happy hour promotions work best when you analyze your bar’s POS data and leverage the psychology of your customers’ drink choices. 

Depending on your hours, there’s a good chance your establishment sees a slump sometime in the afternoon. Check out your hourly revenue rates over time to see when your sales bottom out, and then put promos in place to get folks in the door. 

You might offer discounts on your most popular menu items during your quiet hours and send out ads to your loyalty program members to let them know about the great new deal they can get on their favorite treats. 

Beyond the numbers: The human touch still matters

While there’s no doubt that bar POS systems can revolutionize business and boost revenue, guests still want the familiar comforts of a friendly face when they sidle up to the bar. 

Here are a few things to keep in mind as you implement new strategies. 

Data is a tool, not a replacement

No matter how much hard data you accumulate, there’s no replacement for good customer service and a welcoming bar environment. Your bar’s POS data should give your staff a leg up when it comes to meeting your customers’ needs. However, if your employees aren’t excited to provide high-quality service, it might be time for additional training or even new staff members. 

Remember, this is the hospitality industry we’re talking about. When guests sit down at your bar, they should feel comfortable and welcomed. If staff members make customers feel like an imposition, you can say goodbye to potential regulars. 

Building relationships

Even the best bartenders can have trouble remembering regular customers’ orders in a high-volume establishment, but with a great bar POS system, they won’t have to. Customer profiles include valuable information about each guest, so when a reservation shows up in the system, servers can take a look at their transaction history and get a feel for their preferences. 

Of course, your guests will feel right at home when their bartender asks if they want “the usual.” 

Access to this information can also help your staff form meaningful relationships with guests. It can be hard to remember every encounter, but scanning a customer profile can help ping your employees’ memory. 

The value of surprise and delight

Finally, your bar POS system can let you know about special events, such as birthdays, as soon as your customers make a reservation. Your guests will enter their date of birth when they sign up for your loyalty program. From there, your staff can add additional dates like anniversaries when customers come in to celebrate the special occasion. 

When the big day rolls around again, your staff will be prepared to surprise them with a free dessert or a glass of champagne on the house. 

Of course, this information also allows you to prompt customers to visit by offering special deals during their birthday month. Send them an automated push notification, email, or text to wish them a happy birthday and remind them of the deal. 

Conclusion

Using your bar POS system’s data to understand the psychology behind your customers’ preferences can allow you to target your marketing efforts, optimize your menu, and boost bar revenue. 

The experts at CAKE can help guide you through the process of analyzing your data and configuring your operations to meet your ultimate goals. Request a free demo or contact us today to learn more about CAKE’s POS for bars and breweries!