Is Your Restaurant In Trouble? How Can You Tell?
Everyone knows that failure rates for the restaurant industry are high. Some say 60% will fail within three years, some say that rate is higher. It’s enough to keep any restaurateur awake at night and worrying if they have paid enough attention to the most important things that will keep their business open. The problem is that most who manage restaurants do not understand their most important business metric.
“No way!” you’re saying to yourself right now. “I am on top of every detail and my menu is the highest quality in the area. I know what I am doing! My restaurant concept is awesome!”. Maybe, but remember all those failed restaurants who thought the same thing. Sure you are probably doing a lot of things right, following industry expert recommendations and using the freshest ingredients and a lot more - so what could you be missing?
What you need is an education in the science of customer satisfaction. No I’m not just talking about front line customer service skills of your wait staff (that’s a small part of it). I’m talking about the science of human behavior that makes your customers RETURN to buy again and RECOMMEND your restaurant to others. Yes it’s a science, and something you had better know about and apply before your competitor down the street does, because guess what? It’s powerful.
Let me just get your skepticism out of the way right here. This human behavioral science has been validated by more than two million people and continues to demonstrate its effectiveness in many different industries – not only restaurants. As quality and satisfaction experts, our firm has administered hundreds of studies in the development of these findings and can tell you that this research based knowledge is a fresh model and perspective you probably haven’t seen –but you really need to.
If you are running a restaurant, Return and Recommend Rate (R&R%) is your single most important business metric. Forget your P&Ls, Inventory and portion controls and work force management calculations. If you don’t have customers, you don’t have a business.
What our research has revealed are the ten factors that impact R&R Behavior and how well you have to score in each of these ten areas across the entire customer experience to get your customers to come back. And guess what? The quality of your food is only one of the ten categories you need to be paying attention to. In fact the category of Quality has several other sub-characteristics like getting things right the first time, error free processes, and staff knowledge & expertise.
The other nine categories included in this customer satisfaction behavior model are: Value, Timeliness, Efficiency, Environment, Ease of Access, Commitment to the Customer, Service Behaviors, Interdepartmental Teamwork and Innovation. Each of the ten categories are included in our forty question organizational audit of excellence.
What has also been revealed by our research is that these ten satisfaction categories are inter-related and interdependent, and combine together for an overall ‘score’ of the customer experience that correlates with Customer Return and Recommend Rate. Basically that means that by measuring these factors in your restaurant operation, you’ll be able to predict the extent to which, your customers will return – or perhaps not return – or worse, not return and spread negative word of mouth about your restaurant. We call that a Negative Return and Recommend Rate (-R&R%). You certainly don’t want to be there.
There is also a zone of customer behavior called ‘Customer Indifference’. With scores in this area there is no actual customer loyalty. Customers might come in because of a convenient location or promotion, but this restaurant by no means has a loyal customer base. That’s right; you don’t want to be in that zone either.
Throughout this research the Term ‘Excellence’ and ‘World Class’ are continually referenced. That’s because we have statistically determined that customers define ‘Excellence’ as scoring a 9.24 or higher on a 1 to 10 scale of their complete customer experience with your restaurant. That means every factor is scoring very high. ‘Becoming Excellent’ in the eyes of customers has the incredible benefit of Return & Recommend rates as high as 1600% ! That means customers are telling customers who are telling customers who are telling customers. Your name becomes synonymous with excellence. This is where every restaurant would love to be, and the goal every restaurant should be striving for. Becoming World Class is hard work, but first you have to know what you should be working on – in the eyes of your customers.
"Return & Recommend Rate Is Your Single Most Important Business Metric"
But how do you know how your restaurant scores now, unless you measure. You have to become the behavioral scientist, the analyst and most importantly – you have to be objective and unemotional. This is often the toughest part for restaurant owners and managers who have poured their hearts into creating their unique establishment. We have all seen the negative customer comment that creates an immediate visceral emotional reaction. “How could they say that?!” the restaurant manager typically looks for the special cause of that one customer’s dissatisfaction, when instead they should be looking at why 80% of their customers are only rating them a 7 out of 10 when evaluating ‘Value’ for instance.
Restauranteurs hate those one-off reviews that show up on internet review sites and have such a potential bad impact, and rightfully so- because most of these review sites are poorly designed, don’t statistically reflect the overall reality of the average customer’s experience and potentially have an unfair impact on a restaurateur’s business. Every restaurant makes mistakes from time to time, and one data point is not science. If ten reviews in a row are complaining about the same things however, that’s a different story, but the good news here is that all areas will be included in this very comprehensive customer satisfaction prediction model for your restaurant.
In my new book, “Becoming Excellent – Applying the Ten Values Of Excellence To Your Organization”, I include the comprehensive forty question satisfaction audit for your restaurant along with complete scoring guidelines, recommendations and findings that will be meaningful for your restaurant enterprise. You’ll be able to not only calculate the percentage of your customers that will be returning to buy again and recommend you to others (or not), but you’ll be able to see your strengths and weaknesses in relation to the overall customer experience and where you can improve immediately. But it doesn’t stop there.
What about your competitors? Restaurants are tied to their local demographics and many even have direct competitors right next door. Customers have many choices about where to eat within the range they are willing to travel to, and this model will tell you scientifically – why they are patronizing your competition instead of you. You need this information.
The good news again, is that armed with the same audit you applied to your own operation, you can audit your competitors and find out exactly how you compare against forty specific factors. You’re doing this anecdotally every day anyway; this is just a tool set that can make it more methodical, reliable and effective for your own analysis. Now you will be able to make changes that will minimize your competitor’s advantages over you and strengthen advantages of your own where you differentiate more positively. This is serious strategic knowledge for a fiercely competitive restaurant industry.
Much of the decision making for restaurant owners is ad-hoc and emotional, rather than being based upon real data collection and objective analysis. With your own Customer Satisfaction Audit in hand you will have a completely different outlook on everything from restaurant décor and employee training to menu mix and pricing. Certainly, before you make any large commitments on marketing, remodeling or hiring a new chef, you need to have the perspectives revealed by this new science of customer satisfaction.
While getting the ‘Becoming Excellent Book’ is a great self-lead step to restaurant improvement, you’ll want to involve and re-educate employees in specific areas to integrate critical improvements as well. ‘Becoming Excellent’ provides those guidelines as well as many tools and overall approaches to aid your ongoing journey towards higher levels of customer preference and loyalty.
This book also analyzes three specific dimensions including: Human Factors, Process Factors and Structural Factors – allowing you to implement low cost or no cost improvements with training and process/policy changes before perhaps spending real money on some major changes like redecorating or renting a billboard.
Running a restaurant is a high energy entrepreneurial commitment like no other. Of course you are working very hard to succeed. Perhaps you have tried many things to make your enterprise go, but have been missing it so far. Now you can take a much more scientific approach that will guide you to the right things you can do that will make the biggest difference to your business: Getting customers to come back and recommend you to others.
Find out more about this breakthrough Customer Behavior research and download your own copy of ”Becoming Excellent – Applying The Ten Values of Excellence To Your Organization”, By Bart Allen Berry.