In the Age of Yelp, cultivating a valuable customer experience is essential to running any good business. Harvard Business School found that a one star increase in a restaurant's rating on Yelp increases revenues by around 7%. The customer experience is especially important in the industry of hospitality, where people expect to be treated well. The Temkin Group found that only a slight increase in the customer experience can almost double revenues ($823 million over three years for a $1B company).
Restaurants face new challenges today, because we are also in the Age of Uber Eats. There has never been more opportunity for an individual to choose exactly when and where he wants to eat. The result is a quantifiable reduction in consumer loyalty and more volatile statistics related to reductions in customer service. American companies lose an average of $83 million per year because of poor customer service, according to Parature. Bad customer experiences have also caused 62% of American consumers to switch brands over the course of the past year.
The savviest restaurants are actually using all of these new technologies as opportunities. Those businesses know they have trouble with in-house customer experiences are moving into creating better customer experiences online. Many experts believe that in order to survive in the future, restaurants will need to consider both online and off-line customer journeys. A study from Technomic seems to back up this assertion - the vast majority of survey participants wanted new technologies incorporated into their traditional dining experiences in one way or another. 50% of respondents stated that they prefer restaurants that use technology to speed up the process of ordering or paying.
In House Engagement
Understanding how new technologies can help a restaurant is usually easiest once the traditional customer journey has been properly assessed. Even though new technologies provide new ways for customers to engage the business, most people still prefer the old school sit-down-and-eat experience. Once you know exactly how you will encourage customers to engage through traditional channels, you can determine how much R&D needs to be done towards new technologies.
Here are some of the most important questions to ask:
- What is unique about our restaurant? The in-house experience is more than just the food in the space – it is the ambiance, the service and the feel of the restaurant.
- How can we leverage the unique aspects of our business? If you are going to focus the experience around certain features, those features need to be properly marketed and maintained in order to create value over time.
- What are the best opportunities to sell? If you have certain dishes that are popular, you may be able to upsell other dishes around those, for example.
- How do we take advantage of our best-selling opportunities? Perhaps you reorganize your menu or train your servers to redirect customer attention towards certain pairings. It depends on the strengths of your individual business, but every business has at least one.
Granted, these questions can be quite difficult to answer if you are not used to quantifying the data that will answer them. Your point-of-sale system is a great first step, but do you have the people to properly analyze those statistics? Most POS systems have relevant reporting features, but there is no way for the program to tell a restaurant owner which of those metrics are most important. This is where an agency partner can come in handy even if you do not need any direct marketing or outreach.
New Ideas for a Better Customer Journey
Although each of the opportunities below must be vetted individually by each business, many of them have been quite successful for varied restaurant brands.
Self Service Kiosks
That's right – more convenient customer service does not necessarily mean more fawning. Millennials actually like to avoid human contact in their sales funnels as much as possible, and this includes the industry of hospitality. The self-service kiosk lets the customer take full control of the process from ordering to paying. In the eyes of the Millennial, this is the same level of convenience and speed that they enjoy when ordering online.
Don't just think that kiosks are good for quick service or fast casual stores. Luxury restaurants may also improve the customer journey through this practice. Customers will no longer have to wait for a limited amount of servers, nor will there ever any charge of a misplaced order (because the customers placing it himself). With less emphasis on the traditional interactions between server customer employees are free to deliver a much more valuable personalized type of service when it is most needed.
Customer Facing Displays
Displays are usually incorporated into a restaurant to showcase desserts or live lobsters, but they can actually be integrated into your infrastructure much more valuable way. Restaurants are using these displays in many ways, including dynamic menus, nutrition information and ingredient lists. These active displays allow customers to become more familiar with restaurant brand without the need for human interaction. Customers can peruse the items they wish to know more about at their own pace.
The rotating buffet puts meal choices right in front of the customer and allows him to take as much or as little as he wants when he wants it. This works even better with a live kitchen where customers can see the food being made on demand. The result is a much faster process of ordering food with built-in upsell potential that takes advantage of the impulsive nature of some customers.
When the small human interactions no longer taken for granted in the restaurant, they become a more luxurious experience when they are incorporated into the experience. OpenTable found that complementary extras improve customer loyalty in 69% of survey respondents. How much easier is it to provide a complementary extra if every human interaction is considered "extra"?
How Restaurants Win Guests
Deloitte conducted a seminal study for customer experience strategy in the restaurant industry. They found five elements that were most important in engaging customers regardless of the touchpoint:
- Engage the customer - Although Millennials don't necessarily want human contact, they still want to be treated like a person. Everyone does, of course, and they judge engagement through authenticity in the hospitality.
- Empower the customer - Customizing the experience to the customer makes the customer feel empowered. He also wants his feedback noted and responded to in a timely manner
- Hear the customer - The restaurant must acknowledge the customer's needs.
- Delight the customer - The restaurant is responsible for creating moments, not just food.
- Know the customer - Remember the customer's preferences and use that data to anticipate my needs as they change.
Across the changing formats of the customer journey, people placed a different emphasis on different elements. For carryout and delivery, Empowerment was the most important element. In a sit down restaurant, Engagement came out number one. This is important to note because customer needs change with the format. Restaurants would do well to learn which aspects of the journey are most important depending on which touch point the customer engages with. This may be difficult to do without an objective outside perspective, because the restaurant must naturally be concerned with all aspects of the customer experience at the same time.
Redefining the Customer Strategy
Knowing then that customer needs change based on touch point, and that customers prefer technologically advanced restaurant experiences, how do you refine your customer strategy? There are three basic steps that you should take although the specific strategy may differ in small details based on the individual business.
- Gather data. Gathering as much data about your guests as possible is the first step in any redefinition of a marketing or operations strategy. Knowing which data to collect is also important. This is where an agency partner will save you a great deal of time - an objective outside perspective can profile your business beforehand to determine which metrics to follow.
- Leverage your tech. Once you have the right data in your hands, you have to make sure that it gets to the right people at the right time. Data is a real time expertise, not a one time thing. Guests must be empowered to dictate their own journey through rapid organization of the data you collect about their preferences. Your frontline employees should also be trained in how to use your technology to improve the customer experience in real time.
- Engage the frontline. Your restaurant must eventually develop the capabilities to empower your frontline to make fast changes based on changing preferences. More than anything, restaurant brands are built on the moments that occur between employees and customers.
The best practices above should get you on the right path in redefining or upgrading your customer journey. Keep in mind that this journey is essential to thrive in the new landscape of tech savvy hospitality, and you should be able to build your brand at a rapid pace.