Sept. 24, 2012
By Susan Ganeshan, CMO, newBrandAnalytics
Chances are your restaurant incorporates a rewards program into your customer loyalty initiatives. With the average person having 14 loyalty cards in her wallet, it seems to reason that rewards are an effective way to retain customers. Unfortunately, customers are telling us the opposite. A recent survey by PriceWaterhouse Coopers found that only 1 percent of those surveyed ranked rewards programs alone as the top influencer of purchase.
While a customer retention strategy should contain a rewards program, brand experience is identified as the most critical driver of customer loyalty. As Walt Disney once said, "Do what you do so well they want to come back and bring their friends."
When restaurants deliver a great experience, their customers will come back, increase their spending, and more than ever before - through social media – recommend them to friends. In fact, The Customer Experience Impact Report found that a better experience is so important to consumers that a full 86 percent are even willing to pay more for it.
So, how do you create the superior experience that will engage customers and earn their loyalty? The answer to this question is found in online conversations about your restaurant.
There is little doubt the flood of online commentary may seem ominous. But when it comes to understanding the aspects of dining experiences that are very important to your customers and their overall satisfaction with your restaurant, online conversations are the most robust source of insight. They are essentially the next generation of focus groups. The unstructured, unsolicited real-time feedback gives you the most comprehensive understanding of the experience you're delivering. The positive comments highlight what your customers appreciate most; negative themes point out areas in need of improvement and opportunities to attract more business and improve reputation.
Given its ongoing quest to continuously deliver a great experience, Nando's Peri- Peri analyzes and deciphers online customer feedback to pinpoint operational improvements that need to be made. They also take the next critical step of engaging directly with online reviewers to let them know their voice has been heard --- something the vast majority of organizations fail to do. According to a Gartner report, an overwhelming 95 percent of organizations collect customer feedback, but just a mere 5 percent close the loop by making customers aware of the changes that resulted from their feedback.
"We understand that while listening to our customers is critical, making sure they know we value their opinions and that their voices are heard is what earns their trust and loyalty," says Burton Heiss, CEO of Nando's Peri Peri. "We've seen first-hand how engaging with customers and letting them know how their feedback was the catalyst for making improvements generates goodwill, strengthens their relationship with our brand, and encourages them to share their experience with others."
For instance, take a look at these three excerpts from commentary on a popular online review site about Nando's Peri Peri:
"I would like to give an update to a previous review.... Not too long after posting my not so stellar review, I was contacted by someone in their Customer Care Center. She addressed my needs and mailed me a voucher for a free meal or two! My voucher was redeemed last week and the food was good as ever. Even better, the service was AWESOME! The girl at the counter was very pleasant and professional and the manager was in the front helping the line since it was so busy in there."
"Shortly after posting my initial review, I was contacted by Nando's to apologize for the bad experience and they handled the situation in a very positive way. I just went back for dinner, and everything seemed to be clicking. The service was much improved, and even though it was very busy our food was delivered hot and fresh in about 5 minutes. Overall, a very positive experience this time. Glad I gave them another chance."
"Ok so third time is a charm. After my first two times here I was so disappointed that I was very reluctant to come back. I want to make this short and sweet and tell you why I gave it 4 stars. First of all, their need for complete customer satisfaction is far superior than any other business that I have patroned. Because of my less than stellar first 2 reviews, I was kindly contacted by Curie who was a part of Customer Service. She was disappointed to hear about my experience and in an effort to gain those extra stars she was kind enough to send me some coupons so that I would go back.....both times. Well this last time definitely made up for it. My portions were perfect, the service was great, and everything was delicious. I have to hand it to them. They just want to make sure that you have a great experience and they back it up with the customer support. I would go back just because they were so nice....even if I wasn't so nice with my last reviews."
In these instances, the reviewers went back and gave Nando's a higher star rating. Further, these online Yelp ratings have been shown to have a direct link to increased nightly business. Economists at the University of California, Berkeley published the results of a study examining the effects of Yelp's online ratings in the September 2012 Economic Journal. The study shows a slight half-star improvement in ratings can increase a restaurant's business during peak dining hours by a full 19 percent.
As Heiss explains, "We are all drowning in data, but thirsty for meaning. In today's world I believe you can't afford to ignore the robust intelligence that can be found in social media. Analyzing all our online commentary gives us unparalleled insight into our business operations and enables us to engage with our customers in ways that truly earns their loyalty."
Wanna hear more? Come to the Fast Casual Executive Summit, where both Heiss and Ganeshan will speak on a panel about guest recovery via social media.