7 Key Metrics for a Successful Tea Cafe: Track Your Business with These KPIs

Are you running or planning to open a tea cafe? Tracking key performance indicators (KPIs) is essential for the success of any business. In this article, we will explore the top seven KPIs that every tea cafe should track and calculate.

With the tea industry showing steady growth, consumer preferences are shifting towards premium quality teas and unique experiences. It's critical to monitor your tea and snack revenue, average customer satisfaction rating, and the number of repeat customers. Did you know that revenue from tea sales in the US increased by 4.1% in 2020 alone?

• Revenue from tea and snack sales - This KPI will help you assess the financial health of your cafe.
• Number of unique and exclusive tea blends offered - Offering unique and exclusive tea blends can help you stand out from the competition and attract more customers.
• Average time spent in the cafe per customer - Monitoring how much time customers spend in your cafe can help you create a more enjoyable customer experience.

Moreover, tracking the sales from events, workshops, and tastings, and the percentage of local vs tourist customers can give insights into your marketing strategies. Global tea consumption is projected to reach 3.98 million tons by 2027. Stay ahead of the game by monitoring key metrics that matter the most to your business.

Read on to discover more about the essential KPIs for your tea cafe and how to calculate them.

Revenue from tea and snack sales

As a tea café owner, revenue from tea and snack sales is a critical KPI to understand the financial success of your business. Here's a detailed explanation of this KPI:

Definition

Revenue from tea and snack sales refers to the total amount of money earned from selling tea and snack products in a given period of time.

Use Case

This KPI is essential for tracking the financial health of your tea café. It provides insight into how much money your tea and snack products generate and helps you make informed decisions about pricing, inventory, and promotional strategies.

How To Calculate KPI

To calculate revenue from tea and snack sales, use the following formula:

Calculation Example

Let's assume that in the last quarter, your tea café earned $5,000 in tea sales revenue and $3,000 in snack sales revenue. Thus, your total revenue from tea and snack sales would be:

KPI Advantages

• Provides an accurate representation of the financial success of your tea café
• Helps identify which product lines are generating the most revenue
• Enables you to make data-driven decisions about inventory, pricing, and promotional strategies

KPI Disadvantages

• Doesn't take into account the cost of goods sold (COGS)
• Doesn't consider other revenue sources, such as merchandise or catering services

KPI Industry Benchmarks

According to industry benchmarks, a well-performing tea café should earn between $5,000 and $10,000 in revenue from tea and snack sales per month.

Top Seven Tea Cafe KPI Metrics: How to Track and Calculate

Average Customer Satisfaction Rating

Definition: The average customer satisfaction rating gauges how satisfied customers are with a tea cafe's products, services, and overall experience. It measures the level of satisfaction amongst your clients and provides insight into how well you are meeting their needs.

Use Case: Tracking your tea cafe's customer satisfaction rating can be a useful tool to improve customer retention and attract new clients. A higher satisfaction rating can lead to increased customer loyalty and business growth.

How to Calculate KPI: To calculate the average customer satisfaction rating, you need to divide the total sum of all customers' satisfaction scores by the number of satisfied customers.

Calculation Example: Let's say your tea cafe received satisfaction scores from 50 customers, with total satisfaction scores adding up to 230. The number of satisfied customers is 40.

Therefore, the average customer satisfaction rating for your tea cafe is 5.75.

KPI Advantages: An average customer satisfaction rating can provide insights that help you better understand your customer's needs, preferences, and overall satisfaction levels. It can also help identify areas of improvement and drive employee performance to promote higher satisfaction rates.

KPI Disadvantages: The average customer satisfaction rating can be misleading if there are outliers or if it's challenging to get customers to provide satisfaction scores. It's essential to gather data from a diverse group of customers to obtain a comprehensive view of your tea cafe's performance.

KPI Industry Benchmarks: According to the National Restaurant Association, the average customer satisfaction rating for restaurants is 80%, which can serve as a benchmark for tea cafes to aim towards. However, the benchmark can differ based on target audience and location.

Number of Repeat Customers

Definition

The Number of Repeat Customers KPI measures the number of customers who return to your tea cafe for repeat business.

Use Case

The Number of Repeat Customers KPI is essential for measuring customer loyalty and satisfaction. A high number of repeat customers indicates that your tea cafe is meeting or exceeding customer expectations, while a low number can reveal areas in need of improvement.

How To Calculate KPI

Calculation Example

In January, your tea cafe had 500 total customers, of which 150 were new customers. Therefore, the number of repeat customers is:

KPI Advantages

• Measures customer loyalty and satisfaction
• Can help identify ways to improve customer service, ambiance, or product offerings

KPI Disadvantages

• May not account for changes in customer behavior over time
• Does not address how much repeat customers are spending

KPI Industry Benchmarks

• According to an article from QSR Magazine, the average restaurant has a repeat customer rate of approximately 15-20%.

Sales from events, workshops, and tastings

Definition:

Sales from events, workshops, and tastings refers to the revenue generated by tea cafes from events, workshops, and tastings. These events provide an opportunity for tea cafes to showcase their products, increase brand awareness, and engage with customers.

Use Case:

Tracking sales from events, workshops, and tastings is crucial for tea cafes to assess the effectiveness of their marketing and promotional activities. It helps in identifying which events are generating the highest revenue and which ones need improvement. It also helps in evaluating the return on investment of these events.

How to Calculate KPI:

Calculation Example:

KPI Advantages:

• Helps in identifying the most effective marketing and promotional events
• Provides insights into the return on investment of events
• Enables comparison of revenue generated from different events

KPI Disadvantages:

• Does not provide insights into the cost of organizing events
• May not account for indirect benefits of events, such as increased brand awareness
• Does not account for revenue generated from regular sales

KPI Industry Benchmarks:

The benchmark for sales from events, workshops, and tastings varies among tea cafes depending on their size, location, and customer base. However, a benchmark of 10% of total revenue generated by a tea cafe is considered to be good.

Percentage of Local vs Tourist Customers

Definition

Use Case

How To Calculate KPI

Calculation Example

KPI Advantages

• Helps tea cafe owners tailor their offerings to the preferences of their customers
• Assists in defining marketing campaigns and reaching potential new customers
• Provides insights into the changing behaviors of customers over time

KPI Disadvantages

• The KPI does not account for any potential overlap between local and tourist customers
• A small sample size of customers can skew the results
• It may not be possible to differentiate between locals and tourists accurately

KPI Industry Benchmarks for the KPI: Percentage of Local vs Tourist Customers

• 60/40 for a local cafe that has been in business for a long time
• 30/70 for a tourist hotspot that has recently opened up to the public
• 50/50 for a tea cafe located in a downtown area with a mix of locals and tourists

Number of unique and exclusive tea blends offered

Definition

The number of unique and exclusive tea blends offered by a tea cafe refers to the total number of different types of tea blends that are available for customers to order and enjoy.

Use case

A high number of unique and exclusive tea blends offered can attract more customers by providing them with a diverse range of options to choose from. It can also help the tea cafe stand out from competitors and create a unique brand identity based on its exclusive tea blends.

How to Calculate KPI

To calculate the number of unique and exclusive tea blends offered by a tea cafe, simply count the total number of different types of tea blends that are available for customers to order and enjoy.

Calculation Example

If a tea cafe offers 25 different types of tea blends to its customers, then the number of unique and exclusive tea blends offered by the cafe would be 25.

KPI Advantages

• Can attract more customers by providing them with a diverse range of options to choose from
• Helps the tea cafe stand out from competitors and create a unique brand identity based on its exclusive tea blends

KPI Disadvantages

• A high number of tea blends may increase the complexity and cost of managing inventory and supplies
• A high number of tea blends may also lead to longer wait times and increased service complexity

KPI Industry Benchmarks

As per industry benchmarks, a tea cafe should aim to offer at least 10-15 unique and exclusive tea blends to its customers.

Average time spent in the cafe per customer

Tracking the average time each customer spends in your tea cafe is an essential KPI for measuring customer engagement and cafe efficiency. Here's a breakdown of this KPI:

Definition

The 'average time spent in the cafe per customer' KPI is the average length of time customers spend in your cafe before leaving.

Use Case

This KPI is useful for understanding how engaged customers are and how efficiently your cafe operates. By tracking this metric, you can identify areas where customers may be getting held up and work to improve those workflows.

How To Calculate KPI

Divide the total time customers spend in your cafe by the total number of customers served during a specific period of time.

Calculation Example

During a one-month period, 500 customers visited your tea cafe, spending a total of 1000 hours in the cafe.

• Total Time = 1000 hours
• Total Customers = 500
• KPI = 1000/500 = 2 Hours/Customer

KPI Advantages

• Measures customer engagement and cafe efficiency
• Identifies slow points in the cafe workflow
• Can indicate how long customers are willing to stay in the cafe

KPI Disadvantages

• May not be applicable for quick-service restaurants
• Could be affected by factors outside of the cafe's control, such as weather or special events

KPI Industry Benchmarks

According to industry benchmarks, the average time a customer spends in a cafe is around 60 minutes. This varies depending on the type of establishment and its offerings.