Podcast Summary: "The Power of Data with Avero CEO, Doug Hsieh"
Restaurant Strategy with host Chip Klose delves deep into the transformative role of data in enhancing restaurant profitability. In this engaging episode, Chip converses with Doug C., the CEO and founding board member of Avero, a pioneering restaurant analytics software. Released on February 13, 2025, this episode uncovers how leveraging data can revolutionize restaurant operations and culture.
Introduction to Avero and Doug C.
Chip Klose introduces Doug C., highlighting Avero as the "OG software" in the restaurant industry, emphasizing its longstanding reliability and evolving capabilities. Doug echoes this sentiment, comparing Avero to "Moneyball for restaurants," underscoring its mission to translate numbers into actionable insights that drive profitability (04:23).
The Genesis of Avero
Doug shares the origins of Avero, tracing it back to its founder, Damian McGavra, a former restaurant CFO. Frustrated by the inefficiencies of extracting actionable data from point-of-sale systems, Damian, along with Doug's experience as an investment banker, envisioned a tool built "by operators for operators" (04:43). This foundational ethos has propelled Avero's growth, catering to a diverse range of establishments from small eateries to large enterprises worldwide.
Leveraging Data for Operational Excellence
Contrary to the belief that we are "in the age of data," Doug asserts that data has always been integral to business operations. The current advancement lies in the ability to "learn from it and put it into practice" (22:15). Avero excels in this by providing real-time, actionable insights without necessitating users to be data experts.
Enhancing Server Productivity
A cornerstone of Avero's offerings is server productivity analysis. Doug explains that servers act as the primary salespeople in restaurants. By analyzing metrics like checks per person (PPAs), Avero identifies top performers versus underperformers. For instance, a server's ability to upsell beverages significantly impacts the overall check average. Doug recounts a case where Avero identified a vegetarian server in a steakhouse whose personal preferences were inadvertently affecting sales. This insight led to targeted training, resulting in a notable increase in revenue (08:26; 12:56).
Notable Quote:
"It's the server's job to be the salesperson. If they aren't selling, they're leaving money on the table." — Doug C. (08:26)
Case Study: The Impact of Avero in Action
Doug shares an illustrative story about a server named Elaine, whose exceptional performance initially appeared anomalous. Upon closer inspection, Avero revealed that Elaine strategically prioritized beverage sales, significantly boosting the check average. By systematizing Elaine's approach, Avero enabled other servers to emulate her success, collectively raising the restaurant's PPAs by $5 to $7 per guest within 90 days (12:56).
Cultivating a Data-Driven Culture
A transformative outcome of implementing Avero's analytics is the cultural shift within restaurants. Traditionally, underperforming staff might face dismissal, but Avero fosters a coaching-centric environment. By presenting concrete data on lost sales opportunities, managers can engage in constructive dialogues, emphasizing mutual growth and accountability.
Notable Quote:
"It's not about telling them what to do; it's about showing them the opportunity they have to make more money." — Doug C. (35:46)
Quantifying Lost Sales Opportunities
Avero introduces the concept of Lost Sales Opportunity (LSO), a metric calculated by the difference between a server's performance and the average, multiplied by covers and check amounts. This quantification brings to light the tangible financial impact of underperformance, often revealing losses amounting to tens of thousands of dollars annually for a single server (32:52; 33:14).
Advanced Reporting and Analytics
Doug emphasizes Avero's robust reporting capabilities, likening them to a baseball card. The software doesn't just present top-level summaries but allows users to drill down into specific categories, such as wine or dessert sales. This granularity enables precise, actionable strategies tailored to individual server performance (29:58).
Notable Quote:
"Our drill-down capability is to take summary data and look at the next level to make actionable decisions." — Doug C. (29:58)
Practical Implementation: From Data to Action
Implementing Avero's insights involves a systematic approach:
- Identify bottom-performing servers through data.
- Analyze specific areas where improvement is needed.
- Engage in one-on-one coaching sessions with actionable plans.
- Monitor progress through continuous data tracking.
Doug illustrates this with an example where setting specific PPA improvement goals led to heightened server engagement and increased revenues without extending work hours (32:06; 35:46).
The Role of Pre-Shift Meetings
Regular pre-shift meetings are pivotal for reinforcing data-driven strategies. By customizing discussions based on individual performance metrics, managers can provide targeted training, such as organizing wine tastings to boost wine sales or dessert presentations to enhance checks (27:14; 28:25).
Avero's Free Offering and Industry Impact
Acknowledging industry challenges, Doug announces Avero's free product offering, designed to help restaurants monitor key metrics without financial commitment. This initiative underscores Avero's commitment to supporting the restaurant community in navigating rising costs and evolving customer expectations (40:24).
Final Thoughts: Building a Sustainable, Profitable Restaurant
As the conversation wraps up, Doug underscores the importance of a quantitatively driven approach to restaurant management. By integrating Avero's comprehensive analytics, operators can foster a culture of continuous improvement, accountability, and enhanced profitability.
Closing Quote:
"We're trying to help you become more quantitatively driven without becoming a mathematician." — Doug C. (40:24)
Conclusion
This episode of Restaurant Strategy highlights the indispensable role of data in modern restaurant management. Through Doug C.'s insights, listeners gain a profound understanding of how Avero's tools can drive operational excellence, enhance server productivity, and cultivate a culture centered on continuous improvement and profitability.
Timestamps:
- 04:23 - Introduction to Avero
- 04:43 - Genesis of Avero
- 08:26 - Server Productivity
- 12:56 - Case Study: Elaine
- 22:15 - Data-Driven Practice
- 29:58 - Advanced Reporting
- 32:06 - Practical Implementation
- 35:46 - Cultivating Data-Driven Culture
- 40:24 - Free Product Offering
Note: Direct links to timestamps are denoted by placeholders (#) and should be linked to the respective sections if available.