Three Customer Experience Truths from the Restaurant Industry

wine glasses There are some elements of the customer experience that are unique to a given industry – things like baggage fees, claims departments, and billing practices. But there are some universal customer experience truths that apply regardless of the industry you happen to work in. This post examines three of these truths as uncovered through our partnership with one of our clients, Service Inspired Restaurants®.

Service Inspired Restaurants®, with casual dining concept restaurants operating in the U.S. and Canada, strives to deliver engaging guest experiences through outstanding service. Service Inspired Restaurants® implements our Voice of the Guest solution to improve current levels of customer service. Their goal is to use continuous guest feedback to weave Voice of the Customer into the daily operations of the restaurant.

Truth #1: Customers will pay more for great service.

In a recent survey conducted by American Express, 70% of consumers said they are willing to spend more for exceptional service. Any market researcher knows that the difference between what customers say they will do and what they actually do can be disheartening. However, the unique tipping structure of the restaurant industry provides a tidy method to test this theory.

In our Voice of the Customer solution, customers are asked if anyone went above and beyond for them. If yes, they are prompted to offer that person’s name and a description of what they did. Meanwhile we used Point of Sale (POS) data to group guests according to the size of their tips (i.e., bottom third, middle third, and top third). Looking at this data, we find that 41% of guests who recognized their server for above and beyond service left a large (top third) tip.

In addition, we effectively linked a Recognize Alert to a 10% increase in tip size. So while it may not be safe to assume that any industry can improve service and raise prices by 10%, we can safely surmise that customers notice, appreciate, and are willing to pay for exceptional experiences.

Truth #2: Recognition is contagious.

Service Inspired Restaurants® began using these positive alerts to recognize exceptional employees. Some managers posted these alerts in public places, while others shared them in staff meetings. One manager planned a special event for the first server to reach 100 Recognition Alerts.

Across 8,000 guest surveys collected over the first few months of the program, 34% included a Recognition Alert – about one in three guests recognized their server for delivering great service. 8,000 surveys later, this number had risen to 40%, an 18% increase relative to the starting point.

Our 2011 Employee Engagement Trends Report examined this very human aspect of work and motivation. We found that employees who receive recognition from customers are 4.5 times as likely to be engaged compared to those who do not (55% Engaged vs. just 12% respectively). One characteristic of an engaged employee is a willingness to go out of their way for a customer, which increases the chances of a customer recognizing them.

Truth #3: The whole experience matters.

Using multivariate regression analysis, we were able to uncover the impact of the different elements of the restaurant experience. But really, it only takes a few minutes of reading Yelp! reviews to figure out the winning recipe of an exceptional dining experience: atmosphere, food, and service. Controlling for the other elements we found a 5 percentage point boost in Customer Engagement attributable to server recognition alone. However, when all the elements of a high quality guest experience are working in tandem, server recognition boosts Customer Engagement a substantial 18 points.

Forrester Analyst Kerry Bodine refers to this idea as the Customer Experience Ecosystem, stating, “Companies that want to improve their customer experience need to understand the intertwined and ever evolving relationships among their internal employees, external partners, and customers.” In the case of a restaurant, it can be the state of the bathrooms or the consistency of the tomatoes used in the house salad. In the state of a professional services company, it can be the ease of accessing information or the accuracy of billing. Regardless, Service Inspired Restaurants® is a clear example of how powerful it can be when all elements of the experience align with the customer’s expectations.

This is certainly not a comprehensive list of customer experience truths. What customer experience truths have you found that hold true regardless of industry?

~Janessa Lantz