There are potentially great benefits to operators with the resources to take advantage of automated approaches. The speed at which systems such as PeopleMetrics’ Voice of the Customer software can obtain customer feedback, deliver real-time results, and help analyze those results is an asset in today’s marketplace. With or without the aid of advanced technologies, there’s much to be learned from the principles behind them:

CREATE A CONSTRUCTIVE CULTURE “An owner must create a culture that will encourage honest talk about problems – the attitude has to be ‘let’s go fix it,’” says Bob Thompson, CEO, CustomerThink. “And what are you going to do if an employee is getting great feedback? A system needs to be in place for reinforcing these behaviors.” PeopleMetrics’s Action Alerts aim to do just that. Customers are asked, “Did anybody go above and beyond for you?” Janessa explains, “It’s powerful when a customer says ‘someone made my day’ and it can have a dramatic effect on a business’s culture, reinforcing the kind of positive behaviors that create an experience your customers want. Managers often share recognition alerts at staff meetings and other forums and learning is embedded in training programs. We’ve seen that when this type of feedback is shared, recognition becomes contagious.”

MEASURE WHAT MATTERS “I’ve seen surveys clearly designed to help a company understand their customers – how often do I eat out, where do I go, etc. – that have little to do with making a better experience for me,” says Janessa. “Being customer- vs. company-centric starts with the questions you ask and also being respectful of customers’ time. Don’t ask customers what they had for dinner if you already have that in your POS system.” Bob adds, “Especially on the floor, so many times it’s not a real question that’s asked, such as ‘How is everything?’” Janessa agrees. “Only collect the kind of feedback you intend to act upon.” A standard question on PeopleMetrics surveys asks guests if they loved their experience at the restaurant. “This pushes companies to stop thinking about just ‘satisfying’ guests and imagine ways to create truly memorable experiences.”

TAKE ACTION AND CLOSE THE LOOP “You can make things worse by asking for feedback when you don’t act and you appear not to care,” advises Bob. “You must act.” PeopleMetrics advocates a “closed loop” approach. “If customers take the time to provide feedback, then you should take the time to provide follow-up,” says Janessa. “Be clear on who gets feedback, what the appropriate actions are, and then ensure that the people assigned to follow up do so. If you don’t have a plan in place for how you will use customer feedback, then you haven’t earned the right to ask your customers for insight.” Bob cautions that a tight feedback loop – with comments going to the people responsible and then following up with customers – is important in light of how quickly things can go viral.

EMPLOY MULTIPLE CHANNELS “Customer feedback comes in many forms and surveys are just one dimension; you need more to give you a full picture,” cautions Bob. “You could also simply talk to customers.” Even then, he says, getting feedback can be more than asking questions. “Look at customers’ plates and watch them. Researchers think words express only 7% of communication. The other 93% includes how words are spoken and body language such as gestures, posture, eye movements, and facial expressions. People should listen to customers with their whole bodies.” Bob’s advice is to take it personally. “The approach to getting customer feedback must be genuine. Larger companies need to systemize it, but don’t let that get in the way of authenticity and a real connection with customers.”

Another popular channel is social media, which, Bob acknowledges, can be a useful source of real-time feedback. “You don’t want little sparks to turn into a bonfire. But remember that social media may not accurately represent your core customer base – it’s an excellent outlet for ‘squeaky wheels.’ If your goal is to systematically improve your customer experience and boost engagement, it’s best to continue asking for feedback rather than focusing on social media aggregation. Social media will never replace consistent feedback, systematic follow-up, and a solid business strategy.” Janessa agrees. “It’s tempting to invest in social media because it’s a hot topic. But before you do that, you need to be making it easy for guests to provide feedback through other channels – whether that’s a customer feedback program, the name of a manager to call, or just a suggestion box. Then you need to have a defined process for how you will act on that feedback and fix the root causes of the issues. Get those basics right before you expend resources on mining social data and bend over backwards trying appease the online voices.”

“Being a hands-on owner, I’m in the restaurant a lot and, as a result, many customers give me feedback in person. Because great customer service is so important to me, I’m also using a QR code survey in a frame on the table and by the tip jar, as well as on our website. I receive an email when a survey is completed, which allows me to follow up with customers quickly, plus I can track comments by server and reward those with good reviews.”
–Pat Fleming, owner, Moloko: The Art of Crepe and Coffee, Miami, FL

“In the last year we’ve added two or three ‘hospitality ambassadors’ at each restaurant whose only job is to ‘touch’ every table. They’re trained to identify problems just by looking at a table. For example, our sweet potato fries tend to get cold fast; if they see fries have been sitting for a while they are empowered to get a fresh batch. And, when appropriate, they engage guests in a dialog, not simply saying ‘how is everything?’. At the end of each shift they debrief the manager.”
–Scott Slater, owner, Slater’s 50/50 Burgers by Design, hq, Anaheim, CA

In 2012, thousands of restaurant customers across the country supported Share Our Strength’s No Kid Hungry® campaign by taking advantage of promotions such as those created by independent restaurants, Bellizzi, Mt. Kisco, NY, and Baker’s Restaurant, Elkton, MD. Bellizzi donated 10% of a week’s sales, and Baker’s Restaurant opened on a day it was normally closed, donating 100% of proceeds. Marc Murphy’s Landmarc and Ditch Plains, New York, NY, contributed $1 for every ice cream cone, Ditch’wich dessert, and kids’ meal sold. Many involved their social media channels – chains like Bruegger’s donated $1 for every Facebook ‘Like’ and Joe’s Crab Shack promoted multiple month-long offers on its Facebook page, raising more than $1 million, and adding over 9,300 new Facebook fans.

To help restaurants customize their participation and create promotions, Share Our Strength’s Online Resource Center contains how-to guides, fact sheets, downloadable point-of-purchase materials, templates for press releases, social media posts, employee communications, emails to customers, etc.

For more than 20 years, American Express has partnered with Share Our Strength and is proud to be a sponsor of Dine Out For No Kid Hungry for its sixth year. Help us make No Kid Hungry in America a reality – register to participate at DineOutForNoKidHungry.

At Trattoria No. 10, CHICAGO, IL, managing director, Dan Rosenthal says the valet and host are key points of customer contact. “I think restaurateurs sometimes discount the valet but that is the person who gives the first impression and welcomes guests.” Dan believes the host position is also so critical that he is personally involved in the final interviews. “It’s the easiest interview to conduct and it lasts only five seconds – if the person looks me in the eye, has warmth and compassion, the right body language, etc., I know that person is the one for the job.” A final touchpoint is a package of mints left on guests’ dashboards with the GM’s business card and his number to call for a reservation . . . Boloco restaurants, hq, BOSTON, MA, CEO John Pepper says three touchpoints – self-service kiosks, cashiers, and digital menu boards/TV screens (featuring the company’s YouTube channel) – work in concert. “While the techologies are a plus, we think of our cashiers as our quarterbacks – they are trained to read people, recognize if someone has a problem, wants to talk, or is in a rush. Together with the videos, which feature the culinary traditions that inspire our burrito flavors, they help us achieve our goal of making meaningful connections with each guest, each time.”

“Even though we take reservations online, our telephone operators are often the first personal contact guests have – either making a reservation or receiving a confirmation call. They’re our first line of hospitality.” – Kurt Knowles, owner, The Manor, West Orange, NJ

At Enlightened Hospitality Group, hq, SAN DIEGO, CA, CEO James Brennan says there are “millions” of touchpoints involved in building relationships with guests. “One of the things we do is teach staff to walk with their heads high, looking for guests who want to make eye contact – this allows them to react as quickly and as seamlessly as possible.” Staff also is trained to look for body language cues (fidgeting in their seats, holding their wallets or purses, etc.) to recognize and act on guests’ unspoken needs. James says the first and last touchpoints are always at the curb. “We contract valets from an outside company, however we do the training” . . . “We have many guests who say they learned about us online, and because our website is often the first touchpoint, we’ve designed it to be very functional and easy to navigate,” says Scott Dolich, chef/owner, Park Kitchen and The Bent Brick, PORTLAND, OR. He says another important interaction is speaking with guests on the phone. “While we are dependent on our online reservations system, when the phone rings, we are all responsible for answering, even me. We spend time guiding guests to available reservations, answering questions, and letting them know that we have a lovely bar to enjoy while waiting for a table.” The last critical touchpoints are thank yous for coming from their server, the bartender, and the host . . . Michael Stolzfus, chef/ owner, Coquette, NEW ORLEANS, LA, uses Twitter to engage customers. “I generally tweet a photo of a dish every day and customers frequently tweet back comments,” which, he says, creates a lot of personal interactions. He also tweets photos of “mystery” food products/dishes, asking followers to guess what they are. Plus Michael uses Twitter and Facebook to keep customers informed, including about charity events in which they are participating and where they can be found at the event.

A recent study by The NPD Group reports that the number of consumers using restaurant coupons continues to grow, and that the number one place that consumers go to find them is restaurant websites. David Machado, chef/owner, David Machado Restaurants, Portland, OR, discovered that posting coupons during slow times is a very effective way to drive business. His winter dining coupon, available from February 15 to April 15 (except Valentine’s Day), was for 20% off a table’s check or takeout order (exclusive of alcohol and gratuity). “We got about ten additional customers during the week and another 25 on weekends, plus beverage purchases were higher with those using coupons, which really helped,” says David.

“The rule of thumb is that 80% of business comes from 20% of customers and therefore most of the focus should be to build on that 20% – giving them incentives and rewarding them for coming back.” – Michael Sternberg, principal/CEO, Star Restaurant Group

Coupons/offers are also becoming an important component of restaurant loyalty programs, which are no longer only about earning and redeeming points. Special offers for loyalty program members are becoming strategic marketing tools, used to stimulate incremental business from these important customers. For a recent LoyaltyPulse study, Loyalogy surveyed consumers (aged 25-65 with incomes ranging from $75,000 to $150,000+) about attitudes and behaviors regarding restaurant reward programs in the fine dining, casual, and quickservice segments. The feature/benefit that appealed to more than two-thirds of participants is earning points toward free/discounted meals (77%). Also extremely popular were exclusive offers on their birthdays (72%) and unexpected in-restaurant benefits, such as a free appetizer (70%) or free dessert (64%). Dennis Duffy, founder/CEO, Loyalogy, says there is another key finding: 69% state they would like to receive emails with offers for specific food and beverage items that they have ordered in the past. “If, for example, I don’t ever eat dessert at your restaurant, it’s meaningless to send me an offer for a free dessert – offers need to be relevant to the customer,” he says. Plus, over half (58%) say they would like to receive special holiday offers and the same percentage would like to receive periodic offers to try new menu items. “Targeted offers that are exclusive and communicated as being exclusive are likely to connect emotionally with members,” explains Dennis. “And these offers may be the tie breaker when making a decision on where to dine out.”

Many restaurants target loyalty program members with special offers throughout the year. The 65,000 Friends of Tom Card Holders (Tom Catherall is the chef/owner) at Here to Serve Restaurants, Atlanta, GA, receive 10% off their food bill every time they dine, 15% off food during the entire calendar month of their birthday, and frequent special offers targeted to specific segments of membership. “We want our ‘friends’ to feel they are getting value and recognition each time they come in,” says David Abes, director of operations. At Marina Cafe, Destin, FL, and Crush, Seaside, FL, owner James Altamura created the Locals VIP Club to encourage locals to come during the slow off-season. The 1,800 members receive 20% off the entire check (except on holidays) year-round. “Our average check is $60/person, so 20% is a nice incentive for locals and keeps us busy,” he says.

“I use our loyalty program to stay on my customers’ A-list and be top of their minds,” explains Teddi Davis, owner, The Exchange Tavern, Denver, CO. “We have 450 members, and a company that works with small businesses (Loyl.me) monitors their visits and spend constantly, automatically generating offers that are predetermined by me and based on the customers’ spend and visit patterns.” Teddi says if someone usually comes in every week and doesn’t for three weeks, they receive an email with a coupon for 10% off. She also associates some of her offers with cause-related marketing, i.e., 10% off a new menu item coupled with 10% of the bill donated to a local food bank. At Cafe Rio restaurants, Ben Craner, chief marketing officer, says VIP members receive random “secret discounts” during the year. “I’ve learned that any time I get customers involved in a ‘secret,’ they immediately go out and tell everyone they know. I once emailed a secret word to 40 of our loyal customers, telling them they would get something free if they said the word at checkout that day, and 620 people came in and said the word.” Ben adds that these communications are a great way to keep “cult followers” involved with their brand.

TREND Born between 1946 and 1965, aged roughly 47-66 years in 2013, Baby Boomers number close to 82 million, the largest generation.* Due in part to sheer numbers and in part to remaining in the workforce, Boomers have more buying power than younger generations – an estimated $2.1 trillion according to Technomic, Inc. An increasing amount of that disposable income is being spent in restaurants. Coinciding with Millennials (roughly 20-35 years old) pulling back on restaurant visits Boomers have increased theirs – to the point, Bonnie says, “Boomers are supporting the industry; notably they are responsible for all the growth of the morning meal and supper. Older consumers have tended to spend more per visit than younger diners, while younger people have traditionally gone out to eat more often. Now Boomers also have a much higher per capita visit rate.” Bonnie notes that Boomers have traded down from the high end of fast casual to fast casual and even to fast food – not surprising, she notes, because, “Boomers grew up on fast food.” The migration may continue – according to Technomic research, Boomers anticipate larger decreases in fullservice restaurant patronage in the coming year than Millennials and Xers (roughly 36-46 years old).

Bonnie’s advice to study and target Boomers and to understand aging customers will stand for years to come. According to The Futures Company, a Boomer will turn 65 years old every nine seconds between now and 2029. By 2030, when all Boomers will have turned 65, nearly one in five Americans will be 65 or older. In the next 20 years, Americans aged 65+ will climb another 80% to more than 72 million people.

OPPORTUNITY What are Boomers looking for? According to Bonnie, “Combo meals aren’t growing with this group. They want choices – including portion sizes, substitutions, etc. – and to get what they pay for, but not necessarily because of bargain prices. To them, value means things like fresh ingredients and high quality.” In profiling Boomers, The Futures Company concludes that “Boomers don’t want to live longer and better as old people; they want to live endlessly as middle-aged people, so health and wellness is tied to every priority Boomers have.” Bonnie cautions that a recent NPD report on healthy eating found 70% of Boomers (especially aged 50+, who typically express more interest in healthful foods than their younger counterparts) expect to pay no more for healthier items. “One of the key takeaways from the study is that pricing of healthy options needs to be consistent with the rest of the menu.” Bonnie adds that, because they are working, Boomers also want convenience – which includes speed. Technomic research shows that while more Boomers expect to receive their food quickly at limited service restaurants, short/no wait times are important at fullservice concepts too. In terms of marketing, “Boomers are a lot more tech-savvy than we give them credit for,” says Bonnie. “To look for what’s being promoted, for deals, and to see what’s special they go to restaurant websites, so keep yours current.”

CAUTION While Boomers being in the workforce fuels restaurant visits, the fact that many are still working may have to do with how hard they have been hit by the recession – which could create enduring spending sensitivities. According to Pew Research, Boomers are the most likely among all age groups (57%) to say that their household finances have worsened; The Futures Company data shows the number of working Boomers who expect to retire after age 65 has increased over the last few years to be the majority, 55%. “Prior to the recession, Boomers remained in the workforce because they simply wanted to stay mentally engaged and on the center stage they’ve grown accustomed to owning. Now it’s a different story entirely,” says Peter Rose, sr. VP, The Futures Company. “A majority of working Boomers recognize that the once-comfortable retirement they’ve been expecting may no longer be possible.”

*There is no consensus on the age range and populations of American generations. Those here are from Technomic, Inc., based on their extensive research of these definitions.

Click here to read about Millennial consumers. Click here to read about Gen X consumers.

TREND Born between 1966 and 1976, Generation X numbers nearly 45 million; in 2013 they are roughly 36-46 years old.* Nearly 90% of this generation is employed, according to Technomic, the lowest unemployment of all generations. They are also most likely to have children at home and so are squarely in the midst of balancing work and family life. Like Millennials, a substantial amount of Gen Xers report that they are overwhelmed by their daily responsibilities and indicate that they do not have the time to cook at home as often as they would like. They were most likely to cite to Technomic a lack of time to cook at home as a reason for utilizing foodservice more often in the next year; they are big users of takeout. The NPD Group reports that, as with Boomers, this generation now goes out to eat more frequently than Millennials.

OPPORTUNITY Driven by their life stage, this generation really feels the challenges of work/life balance. The Futures Company found that while Xer Moms are just as likely to say that ‘being really good at your job’ is as much a sign of success and accomplishment as ‘spending lots of time with your family,’ Xer Dads are much more likely to see family time as the real marker of success. Providing easy, convenient, kid-friendly options to dine together will have strong appeal to this group; 75% of Xers surveyed by the National Restaurant Association indicated this was an important factor in choosing a fullservice restaurant; 73% said so for a quickservice or carryout option. Technomic’s Generational Trend report reveals that while both Millennials and Xers seek convenient to-go options, Gen Xers are more likely to order takeout, so this is a group worth targeting. The Futures Company finds that Xers are stressed in terms of time and far less likely than other generations to feel they have enough time for themselves, so whether they are on- or off-premise, restaurateurs should make their restaurant experiences efficient. In terms of marketing to Xers, according to The Futures Company one of their hallmark characteristics is that they are pragmatic and practical, so marketing messages that are direct will resonate. Bonnie Riggs, restaurant industry analyst, The NPD Group, counsels operators to market to Xers as they would to older Millennials and younger Boomers.

CAUTION While the good news is that Xers are prime candidates for many of the conveniences that many restaurants can provide, the bad news is, Bonnie says, “There just aren’t that many of them!”

*There is no consensus on the age range and populations of American generations. Those here are from Technomic, Inc., based on their extensive research of these definitions.

Click here to read about Millennial consumers. Click here to read about Boomer consumers.

TREND Born between 1977 and 1992, Millennials are a large generation, numbering more than 68 million. They are, in 2013, roughly 20-35 years old.* Generally considered to be among the hardest hit by the current recession, The Wall Street Journal reports that the official unemployment rate for those under age 25 is 16.2%, more than double the rate for the population as a whole; Pew Research found that the gap in employment between the young and all working-age adults – roughly 15 percentage points – is the widest in recorded history. Adding to the challenges of elevated unemployment, they also tend to carry high student loan debt, which contributes to 30% of Millennials having lived at home in recent years. Due largely to these circumstances beyond their control, those in this generation are not spending as freely as they once did, including in restaurants. In a recent Technomic study about their foodservice habits, 40% of all Millennials (and 45% of younger Millennials, aged 20-27) report cutting back on eating out for financial reasons over the last two years. This is significant – according to The NPD Group, on average, Millennials (especially younger Millennials) ate out about one fewer meal per week in 2012 than in 2007. The NPD Group’s chief industry analyst Harry Balzer sounded an alarm to the industry when their report on the Millennial generation was issued in late 2012, saying the potential impact of this dip in dining out frequency among Millennials could be of “biblical proportions for the restaurant industry” because of their historically high use of restaurants. Yet according to the same study, 41% of Millennials report purchasing food away from home at least twice a week (more than Gen Xers at 38% and Baby Boomers at 37%); a larger proportion of Millennials than older generations do so in or from fullservice restaurants. Technomic’s Generational Trend Report found that a greater percentage of Millennials than Gen X and Boomers visit fullservice restaurants on a monthly basis – upscale casual- and fine-dining concepts in particular. Also of note is their preference for “locally-owned, sit-down independent restaurants”, which 67% of Millennials visit monthly vs. 58% of Gen X and 59% of Boomers. National Restaurant Association research found that among the top attributes Millennials cite for choosing a fullservice restaurant is food they haven’t tried before, important to 62% (followed most closely by only 46% of younger Boomers).

OPPORTUNITY Not surprisingly, this generation is the most likely to be drawn to deals, with 43% telling Technomic that they are influenced by coupons and discounts when choosing where to eat. Another way to their hearts may be through alcoholic beverages. Nearly all in this generation are of legal drinking age and the National Restaurant Association reports that over half consume an alcoholic beverage every time they visit a casual dining restaurant; almost 75% do so in fine dining restaurants, and even more in bars. Technomic data also shows that an alcoholic beverage program played a highly important role in the most recent choice of a restaurant for about half of drinking-age Millennials (compared to one-third of other adults). As many restaurants have discovered, they are prime candidates for happy hour deals that give them a taste of the restaurant experience they like without a tab they can’t afford. And NRA data also shows that more than 75% of Millennials reported ordering food with adult beverages. This is a generation that is ahead of the curve – delving into wine, spirits, and craft beer earlier and more frequently than other generations – so a distinctive beverage program can set a restaurant apart in their eyes. Another avenue of appeal may be enhanced off-premise options. According to Technomic’s Generational Trend report, over a third of Millennials say they’d like to prepare meals at home but don’t have the time; this emphasis on convenience leads them to order food for delivery more often than older consumers. To be competitive, restaurateurs should ensure good taste, accuracy, and speed of service, which Millennials indicate is integral for both takeout and delivery.

In terms of marketing to Millennials, this is a generation that grew up on the Internet – they are most likely to utilize all forms of technology for researching and connecting with restaurants. Technomic finds that while most Millennials look up restaurant menus online, younger Millennials are more likely to interact with restaurants through a variety of online resources – notably Facebook, Twitter YouTube, Goggle+ and other social media channels – than older Millennials (aged 28-35), who more often turn to websites.

CAUTION Size matters, and this is a massive generation. According to Technomic, more Millennials (42%) than Gen Xers (34%) and Boomers (35%) highly value the ability to visit restaurants whenever they want, which would indicate an enduring interest and future potential. While they are financially challenged now, experts agree that staying on top of Millennials’ changing economic circumstances and needs as they progress through their life stages will be rewarded. “This generation has learned to make adjustments – to be more frugal, to do without restaurants,” says Bonnie Riggs, restaurant industry analyst, The NPD Group. “It will take a lot to bring them back into restaurants more frequently, but this is a key customer group. It’s important to appeal to them now and to build their loyalty for the future.” Hopefully the future isn’t that far off. Technomic data indicates that about half of Millennials think their financial situations will improve in the next year.

*There is no consensus on the age range and populations of American generations. Those here are from Technomic, Inc., based on their extensive research of these definitions.

Click here to read about Gen X consumers. Click here to read about Boomer consumers.

Frequent customers consider restaurants an essential part of their lifestyle, with 71% of frequent fullservice customers saying so, compared to just 45% of all adults. (Frequent quickservice and off-premise customers also lead in this regard at 60% and 64%, respectively.) In nearly every category surveyed – from what they most enjoy about restaurants to the factors they weigh when making decisions about where to dine – responses from frequent customers are heightened, sometimes markedly.

Frequent customers are more likely to say that going out to restaurants with family and friends allows them to socialize and is a better use of leisure time than cooking and cleaning up (89% fullservice, 80% quickservice, and 84% off premise vs. 79% of all adults), and that restaurant foods provide flavors and tastes that can’t be easily duplicated at home (76%, 74%, and 77% vs. 68% of all adults). Frequent restaurant customers are also more attracted to the idea of a trendy or exclusive restaurant (62%, 57%, and 66% vs. 49% of all adults). Recommendations from a family member or friend, ease of parking, restaurant reviews, emailed ads or promos, special offers through programs such as Groupon or LivingSocial, information on social media and on peer-review sites such as Yelp – are generally also more meaningful to frequent customers.

So frequent customers are more interested, more engaged, and more tethered to the industry. But, as Hudson counsels, “It’s important to keep in mind that loyal customers’ knowledge, palates, and expectations are higher. Therefore, when there are missteps, the disappointment can also be more intense. Frequent customers are more essential to the bottom line than ever, but the operational execution needs to be consistent for loyalty to be maintained over the longer term.”