Article

The changing lines of guest and employee loyalty

Customer engagement has helped set the fast casual segment apart from the rest, but some would argue employees are losing their spark.

September 6, 2010 by Valerie Killifer — senior editor, NetWorld Alliance

At the 2010 National Restaurant Association Restaurant, Hotel-Motel, it was standing room only during the panel discussion called Fast Casual Differentiators: Make Your Brand Standout in the New Market Economy. The high level of attendance made it clear that the fast casual category isn't just a passing phenomenon. And with sales of the Top 100 chains in excess of $17.5 billion in 2009, the segment is leading the industry charge.

We've decided to take an in-depth look at what separates the segment from the rest and what truly makes it shine. This week, we take a look at the segment's emphasis on customer service.

A lot has been written about customer loyalty and its tie to customer service: Provide stellar customer service and guest loyalty will follow, traditional reasoning goes. However, consumers have shifted how and to whom they stay loyal, making what was once an easy equation as complicated as determining the monetary ROI of social media.

For fast casual concepts, customer service has been more than a guest loyalty-card swipe at the POS: It’s been a philosophy that has roots tied to the strategic mission of a brand.

“I think when you ask a customer how they’re using a service they’ll talk about their needs. But when you understand what a customer wants … that basically gets you ahead of the curve and gives you an advantage over the competition,” said Louis Basile, president and founder of Wildflower Bread Co. “How you do that is through living in your restaurants and seeing how customers are using the vehicle that you have.”

So what prompts fast casual operators to provide the complete package of service, food quality, ambiance and affordability?

It could stem from operators’ overall understanding of the customer service gap that their segment fills. For starters, quick-service concepts are historically focused more on value than service, and while casual-dining restaurants take a service-oriented approach, food quality and ambiance aren’t always held to the same standards.

“I think it comes from an idea that we’re trying to create the best overall retail experience ever, period,” Basile said. “As part of that, customer service is integral. We believe in the lifetime value of a customer and not the transactional value of a customer.”

Integrating the generations

For restaurants in general the customer seems to be changing. While Baby Boomers paved the way for fast casual operators, the proliferation of generations X and Y have led to a multi-layered customer base. And what once lured diners in has changed along with family dynamics.

“For example, in this day and age, we can provide an opportunity for families to eat dinner and to potentially do some homework so kids are getting a jump on what they have to do when they get home," Basile said. "This also gives the family time to get together. We’re trying to create a memorable experience and give consumers something they can’t get somewhere else.”

It’s also about meeting your core customer’s needs where they are outside of the four walls.

“If you’re a Traditionalist (customer between 65-85 years old), you're not the consumer interested in online ordering. But Generation Y will clearly be a consumer that will want to do something like that,” Basile said. “Instead of pushing out programs and services that are a catch-all for everyone, you have to be clear about who you’re targeting and what that segment wants and are most comfortable using.”

That means having continual conversations with your customer base to determine (again) what they need.

“They might tell you what they want, but your responsibility as a leader is to figure out what they need,” Basile said. “What they need gets you ahead of the pack.”

What about the employees

For fast casual restaurants, the consumer-centric approach is what made the segment rise above the rest — and rightly so — especially within the last two years. But not everyone agrees that the segment is living up to its customer service roots.

Bob Phibbs, an author and retail expert, said with the exception of a few brands, fast casual restaurants have stopped hiring the kinds of employees who become actively engaged in improving the guest experience.

“In fast casual, we have stopped rewarding the expressives and the drivers and have given all the power to the amiables and analytics,” he said. “They have hired people who have shut down and repeat the corporate line.”

And yet, good customer service from the employee standpoint, “is about finding the right balance,” of employee personalities.

“Customer service is the one thing that isn’t a money issue,” Phibbs said. “Expressives far outweigh that robotic, menial, employee typically associated with the high turnover rate that we have.”

Employee engagement should be just as important as the customer-centric approach Basile describes if fast casuals are to continue providing a unique overall brand experience.

“We’re trying to create a memorable experience and are giving something consumers can’t get anywhere else,” Basile said. “Then you tie in service model, ambiance and food quality … and you have a complete package.”