Article

Courting customers as the economy turns around

Fast casuals must deliver a prime overall dining experience to avoid losing customers who can again afford upscale meals.

November 21, 2013

By Emily Tod, Insights Project Coordinator, Food IQ

During the recession, fast casuals were a chance to eat a better-than-fast-food meal, while not breaking the bank. As we move out of the recession, consumers are getting back on their feet. According to the Futures Company, a strategic insight and innovation consultancy, 44 percent of consumers are more open now to spending money than they have been in the past few years.

With this financial comeback, consumers can re-evaluate how they spend their money. However, some attitudes on spending have slightly shifted after the Great Recession, making them savvier with their dollars and smarter with spending. The new outlook on financial responsibility can be a plus for fast casual restaurants, ensuring their continued success. But, as the freedom to choose opens doors for higher spending, fast casuals must deliver a prime overall dining experience to avoid losing customers who can once again afford casual and upscale meals. So what can fast casual operations expect within the coming year as consumers overcome the recession, and what does that mean for the segment as a whole?

Smart spenders

These consumers have survived the recession and feel better about their financial situations but have a new outlook on how they manage their money. They learned how to save money when times were bad but also how to handle money wisely when times are better. The Futures Company found that 81 percent of consumers believe that knowing how to spend your money, as opposed to having a lot of money, is the key factor to success. Smart Spenders may now have the means to spend more as they get back on their feet, but now they are asking themselves questions such as: Do I need to spend that much money? Is it worth it? Where could my money be better spent?

Fast casuals reside in the coveted "sweet-spot" between a quality dining experience and a price that is easy on the wallet. Before, a consumer may have traded down to fast casuals and quick serves when times were tough. Now, they may remain within the limited-service realm because they are satisfied by what fast casuals offer and to them, spending the extra cash on casual or upscale experiences just isn't worth it.

So what characteristics will keep Smart Spenders sticking around? Service and value. One of the pros to eating at casual or upscale establishment is the service of the staff. They bring the food to you, they fill your drink and clean up your mess. How can fast casuals compete from a service standpoint? Don't miss the opportunity to train your staff to keep a" what-can-I-do-for-you attitude."

Think of the responses you receive at Chick-Fil-A. "It's my pleasure," is a phrase this chicken chain's employees cannot use enough. A kind greeting upon entering, keeping tables clean and crumb free, and asking to take away dirty dishes are all simple ways to show gratitude for customers' visits. And of course, value cannot be overlooked when courting Smart Spenders. Keeping slightly lower price points than the full-service competition makes the Smart Spender feel that they are getting a great deal, especially since it is often made on the spot, just for them.

Boomerang buyers

The second set of consumers to focus on is the Boomerang Buyers. Now that things are looking up, these consumers are right back where they started before 2008 - spending money when and where they want, believing more is better, and getting caught up in status symbols. The fast casual segment must be weary of these consumers and fight to keep them coming back. Casual and upscale establishments offer their "sit down and stay a while" environment, while their bars and typically broader menus beckon consumers attention. With more cash in their pockets, why shouldn't consumers switch back over to the full-service side?

To remain in the light of the Boomerang Buyers' eyes, fast casuals must show off these top assets: Quality of food, environment and convenience. A quality meal with fresh food is key. According to the NPD Group, two of the largest consumer segments, foodies and restaurant regulars, which together represent 58 percent of the market, care less about price and deals and more about the quality and freshness of their meal. Fresh ingredients and freshly prepared food are also strong motivators among fast casual visitors.

Second, the environment brings so much to casual and upscale restaurants. Comfortable, inviting, and clean environments will help fast casuals stay competitive. Be sure the environment can accommodate a group gathering, where friends or family can come together and enjoy a meal, much like they would in a corner booth at casual restaurant. Lastly, don't forget that fast casual is quicker and more convenient than a full-service sit down restaurant. Be sure to keep service quick while maintaining order accuracy.

As times change, consumers — both Smart Spenders and Boomerang Buyers — may be swayed to visit full-service restaurants more often. Be sure to take a step back and evaluate where your fast casual operation can remain competitive to full service restaurants and you'll be sure to keep customers coming back, no matter their financial philosophy.

Emily Tod is the Insights Project Coordinator at FoodIQ.

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