Social distancing. Masks. Contact-free. These are all buzzwords defining the current taproom experience. Most states still have restrictions on capacity. Others have limited individual party sizes. Effectively, all these regulations have reduced the number of guests that can visit and therefore have reduced your taproom revenue. A few extra bucks from each visit could be the difference between closure and survival.
While keeping our distance has become the norm, everyone who chooses to visit your taproom for on-premise consumption is accepting that some sort of interaction will occur. Even during the shortest, COVID-era encounter, you have the ability to build connections with your guests (see the 30 Second Conversation). In this article, we will show the financial value of engaging at a high level and why it is vital even more so during a pandemic.
Research background: The research referenced in this study was collected through Secret Hopper, based on 5,684 non-paid brewery visits, representing an average check size of 1.95 guests studying spending trends among men and women across various age ranges. The total spent figures represent total amount including tip. The sample set includes nearly a 50/50 mix of men/women. The average age of respondent is 32.7 years old. While we do not have a data set of COVID-era spending habits at breweries, I believe the data used provides valuable insight into consumer behavior.
We define engagement as the emotional connection and level of attention your staff creates with your guests. Engagement can be further broken down into the following levels, which we will refer to throughout the study.
- Neutral: The staff goes through the motions, neither impressing or disappointing the guest.
- Low: The staff does not attempt to build a connection with the guest and is absent for the bulk of the guest’s visit.
- Moderate: The staff greets the guest, offers recommendations, and checks back in a timely fashion.
- High: The staff goes above and beyond moderate, “wow”-ing the guest.
When a guest receives neutral engagement, their average tab is $39.01. When a guest receives high engagement, they spend an average of $45.04. Guests receiving high engagement spend 15.5% more than guests receiving neutral engagement. It is a great sign that only 22% of brewery experiences include neutral to low engagement; however, there is room for improvement that will not only help build the reputation of your brewery, but also craft beer as a whole.
Additionally, while not reflected in the daily sales data, guests who receive high engagement are nearly 50% more likely to recommend/return to your brewery. Guests receiving high engagement are 99.2% likely to recommend/return to your brewery while guests receiving low engagement are only 48.5% likely – meaning the guests receiving low engagement, aren’t likely to return.
Kary Shumway, Founder of Kary’s Financial Training and CFO for Wormtown Brewery, provides online resources for beer industry professionals on topics such as cash flow planning, financial forecasting, and brewery metrics. We will be using Kary’s model to analyze the differences in spending based on varying capacity and levels of engagement.
Averages sales example: In the below example, we use Kary’s projected number of customers per day, per time of day, and have input daily spending averages from our data. The below chart demonstrates averages sales during pre-pandemic normal conditions ($10,067 per week) vs with 50% less guests ($5,034).
From a December 2020 Study, we learned that when asked “How often are you visiting breweries for a beer on-site compared to 30 days ago?” 57.2% of respondents are visiting breweries less for on-site consumption than 30 days prior. For all examples, we will operate under the premise that breweries are seeing 50% of usual traffic.
With guests visiting breweries less, an October 2020 Study provides us with a positive note. 63% of those surveyed are spending equal to or more than they were compared to before COVID-19.
Let’s take a deeper look into Saturdays in particular. Saturdays are potentially your brewery’s highest traffic day. Compared to a Monday, we see 6.3% fewer visits that include high engagement. However, for guests who receive high engagement on a Saturday, we see them spend an average of $47.69, the highest amount spent for any day of the week where high engagement is present. In a perfect world, with regular conditions, where all Saturday visits receive high engagement, your average Saturday would go from $3,354 to $3,546, up almost 6% and by $192.
Guests receiving neutral engagement on Saturdays spend an average of $38.03. This is $9.66, or 25.4%, less than guests receiving high engagement on a Saturday.
Using Kary’s model and looking at the approximately 9 months of pandemic operation so far, basing taproom operation at 50% of average traffic, a brewery would see an additional $234 spent per week if all guests received high engagement. Assuming a taproom has been open 25 weeks out of the 9 months, a brewery could see an additional $5,850 in spending if all guests received high engagement during the pandemic.
While that increase in revenue will help, it’s not a complete game changer. High engagement makes for a stronger guest experience. While a guest may be completely pleased with their visit, you and your staff can take that memorable visit and make it more profitable. Not all high engagement visits have the same impact, and the subject of engagement is merely the tip of the iceberg into individual strategies that can increase revenue even greater.
Sales tactic 1: I’d like to draw attention to two specific sales tactics. When implemented, both strategies can greatly increase tabs. Your staff can make taproom visits, even during a pandemic, more profitable while keeping it safe. From a prior study, we discovered that 45% of guests are not being asked if they would like another beverage during a taproom visit! The average guest who is asked to order another beer spends $46.33 vs $39.83 when it is not suggested.
When guests receive high engagement, they are asked to order another beer 71.3% of the time. When asked this question, they spend an average of $46.87, vs $40.49 when not asked. The below chart demonstrates how frequently guests receiving each level of engagement are asked to order another drink and how much they spend.
The difference between a near $37 and $47 tab could simply be engaging and asking your guest one more question.
Sales tactic 2: People are putting more thoughts into what they purchase and reducing the frequency of trips to make these purchases. Because of this, the second tactic your taproom staff needs to be implementing is getting in the habit of encouraging beer to go. This strategy has value at all times and arguably even more during the current state of the world.
Articles throughout 2020 have attempted to portray that the average American is drinking more. While slightly misleading (thanks, Tara!), Americans are drinking more frequently and going out less. How can you benefit from this? When a guest visits your taproom, you have someone who has intentionally chosen to visit your business. Why not save this guest a trip to their local beer store, or wherever they purchase, and encourage them to make the added purchase of beer to go?
We consistently see that brewery staff only encourage guests to purchase beer to go 20% of the time. When staff don’t ask a guest to make the added purchase, the guest will only make it 9% of the time on their own. However, when staff suggest a guest take beer to go, they will make the purchase 49% of the time.
We see guests receiving high engagement asked to purchase beer to go 30% of the time, and when they do ask, the average guest spends $49.69. Guests who make a to-go purchase when suggested spend an average of 17.9% or $7.50 more than guests who do not.
It is absolutely vital to put in the effort to build relationships with your guests who have specifically chosen to visit your taproom. Make them feel safe, make them feel connected, and as you are building these connections, put in the work to maximize each tab. Suggesting a second beverage and beer to go are merely two of many strategies that can take a positive visit and make it more profitable.
I recommend watching 10 Ways to Maximize Taproom During a Pandemic for more actionable methods you can use to survive and come out stronger.
Andrew Coplon is the Founder of Secret Hopper, a mystery shopping company for craft beer businesses, and Craft Beer Professionals, a community dedicated to the growth and betterment of our industry. Check out all of his CBB articles here.