As presented at Cornell University on October 14, 2014, Coyle Hospitality reveals the results of its study to determine the key drivers of restaurant loyalty.
Restaurant owners and operators struggle to allocate resources, by understanding what element drive success, restaurateurs can make better decisions.
2. INTRODUCTION
THE PURPOSE OF THIS STUDY IS SIMPLE…TO ANSWER A
QUESTION WE GET ASKED BY RESTAURATEURS EVERYDAY:
WHAT ARE THE MOST IMPORTANT ELEMENTS OF A
DINING EXPERIENCE?
WE SET OUT TO DETERMINE THE KEY DRIVERS OF RESTAURANT
LOYALTY.
3. WHO IS COYLE?
BRAND COMPLIANCE
EMOTIONAL
MEASUREMENT
MYSTERY SHOPPING
MARKETING RESEARCH
HOSPITALITY DNA
4. THE MEASURMENT PROBLEM
o Disagreement about the factors that
drive loyalty:
o Brands want brand loyalty
o Owners want guest loyalty
o New approach originates in and is
based on real customer experiences
(empirical).
Guest
Loyalty
Brand
Loyalty
5. OBJECTIVE + METHODOLOGY
Research Objective
Determine the degree to which a variety of service touch points in a restaurant experience
drive overall restaurant loyalty.
Operators can’t do it all…What are the things that matter?
Research Methodology
o 488 respondents reported on restaurant experiences at full service, US restaurants in July
and August, 2014.
o Respondents were asked their overall feelings, emotions, and reactions.
o Total results are accurate +/- 4.4% assuming equal proportions.
o Analysis was conducted using Relative Importance modeling.
6. DEFINING LOYALTY
Q1 Satisfaction
“How satisfied were you with this experience?”
Q2 Likelihood to Return
“How likely are you to return to this
restaurant?”
Q3 Likelihood to Recommend
“How likely are you to
recommend this restaurant to a
friend, family member, or
colleague?”
Total Loyalty
7. RESTAURANT LOYALTY DRIVERS
Food Taste
Price Expectation
Final Farewell
Server Attentiveness
Ambiance
Portion Size
Friendliness of Staff
Friendliness of Server
Knowledge Level of the Server
Timing and Flow of Meal
Name Use
Menu Offerings
Meal Presentation
Location
Cleanliness and Condition of Restaurant
Friendliness of Host
Telephone Experience
Manager’s Level of Concern
Restroom Condition
Greeting
1%
1%
1%
2%
2%
2%
2%
3%
3%
4%
4%
4%
4%
4%
4%
4%
5%
7%
17%
26%
20 Key Drivers of Total Loyalty
The most important drivers of
restaurant loyalty:
1. Food taste (26%),
2. Price (17%),
3. Final farewell (7%),
4. Server attentiveness (5%).
8. KEY TAKEAWAYS
Food taste determines one-quarter of
customer loyalty.
33% when you add
presentation and
portion size.
¼
7x The final farewell is seven times more important than the greeting.
Coyle evaluation data; 84%; n=1073, same time period.
= Use of the customer’s name,
friendliness of staff, friendliness of
server, portion size, ambiance,
timing, and knowledge level of the
server are equally minor factors in
total loyalty.
Respondents equate server attentiveness with server
friendliness.
85%
The high correlation* between these factors indicates
attentiveness and friendliness are seen by the customer as
‘service’. Guests doesn’t compartmentalize.
*correlation near 100% represents factors are identical
17%of total loyalty is
influenced by perceived value.
Relatively insignificant in total loyalty are:
greeting, managers checking on
satisfaction/greeting guests, and
restroom condition.
<5%
9. STAFF CONTRIBUTIONS
Host
Telephone Experience
Greeting
Friendliness of Host
Farewell
Chef
Food taste
Portion size
Presentation of Food
Value/Price
Server
Use of Name
Attentiveness of Server
Knowledge of Server
Friendliness of Server
Farewell
Other Staff
Friendliness of Other Staff
Management Presence
Facilities
Restroom Condition
Restaurant Cleanliness and Condition
Location of Restaurant
Ambiance of Restaurant
10. KEY DRIVERS BY ROLE
9%
10%
12%
28%
41%
Key Drivers by Employee Role
Other Staff
Host
Facilities
Server
Chef
The server and chef are
responsible for 69 percent of
total loyalty.
11. HOSPITALITY CONSTRUCTS
Teamwork
Staff’s Final Farewell
Manager’s Concern
Accessibility
Telephone Experience
Location
Cleanliness and Decor
Restroom Satisfaction
Restaurant Cleanliness and
Condition
Ambiance of Restaurant
Awareness
Use of Name
Timing of Meal
Attentiveness of Server
Friendliness
Greeting
Friendliness of Server
Friendliness of Host
Friendliness of Staff
12. AWARENESS MATTERS
Key Drivers by Construct
22%
20%
15%
37%
5%
Accesibility
Friendliness
Awareness
Teamwork
Cleanliness
It’s all about server
attentiveness, timing of the
meal, and name usage.
13. Design cues and service
interactions enhance food
perceptions.
NOW WHAT?
o Good food is subjective; the
perception of good food isn’t.
Brand Ambassador
Fond Farewell
o Host =
o Engaged management
Talk about the PROBLEM with QA and MS scoring---it was guess work or driven blindly by brands. Now we can begin to identify empirically based scoring.
Disagreement about the factors that drive loyalty
Brands want brand loyalty
Consistency
Compliance to programs
Lots of surveys
Owners want repeat guests
Higher average checks/room rates
Consideration for local needs
Ability to vary from the brand
Word of mouth
Brands win because of franchise agreements that dictate the measurement programs. Result is measurement programs that speak to the brand not the customer. Pie charts vs. adjectives
All can agree that resources are scarce which undermines a consistent, reasoned approach.
Key Driver Analysis looks to identify and analyze what factors drive particular objectives. In this case, we are seeking to determine the extent to which a customer will repeat, refer, and recommend a restaurant. We call this composite loyalty, and we base it on customers’ likelihood to return to the restaurant, overall satisfaction with the experience, and likelihood to recommend the restaurant to their friends, family members, and colleagues.
Traditionally a research problem such as this – explaining what touch points drive overall loyalty – would be measured with a technique called Stepwise Regression. Stepwise Regression and similar statistical approaches quantify the significance of each touch point in explaining the behavior of interest – total loyalty. Stepwise Regression is also commonly used to determine the line of best fit (when a line is drawn between data points).
However, in recent years, an alternative technique has emerged to account for issues common in Stepwise Regression Analysis. This new technique – called Relative Importance Analysis – represents a breakthrough in understanding the true value or “importance” of each touch point. Relative Importance uses multiple combinations of Regression Analysis and other statistical techniques to provide more accurate estimates as to what the Key Drivers actually are and how much influence or weight they have in overall loyalty.
Composite loyalty is calculated by taking an average of the following three questions:
How satisfied were you with this experience?
How likely are you to return to this restaurant?
How likely are you to recommend this restaurant to a friend, family member, or colleague?
All questions are answered on a zero to ten point (0-10) scale with ten being the highest possible score.
The Apex of Loyalty metrics are based on Net Promoter style scores and focus on three levels of advocacy or loyalty – overall satisfaction, likelihood to refer, and likelihood to return. All three scores are highly correlated and the scale ranges from 100 to -100.
Each score is calculated by taking the percentage of promoters (score of 9 or 10) minus the percentage of detractors (score of 0 to 6). A score above 50 is world-class, a score between 25 and 49 is above average, and a score above 0 is considered good.
Discuss the shortcomings of NPS: Willingness to recommend often undermined by factors outside of the control of the operator. Won’t go back to Le Bernadin because it is a once-in-a-liftime experience. Or, only make 10 visits to NYC and want to try new things. Reason for selecting in the first place can be varied (location, special occasion, where guest wanted to go, loyalty programs).
Discuss relationship between the three and the nuanced differences.
“a rising tide lifts all boats” Management not a direct loyalty driver, but indirectly influences.
The effect of management interacting with the customer, the greeting, and perceptions of restroom condition (assuming it meets basic standards) are relatively small.
as long as you are being taken care of, the server demeanor was positive. I think attentiveness and friendliness are seen by the customer as ‘service’. Service was good or bad. The guest doesn’t compartmentalize.
While the chef (through food quality) and the server clearly drive loyalty, the combination of cleanliness, ambiance, location, and décor of the restaurant together are more important to loyalty than the contribution of all other staff (management, host, busser, etc.).
We looked at close to 10K visits and there is a high correlation between total score and management standards.
Factor Analysis with Food Quality and Price removed.
Awareness is the most important construct – at 37%. Awareness is based on: server attentiveness, timing of the meal, and name usage.
Almost a fourth (22%) of hospitality perception is affected by accessibility. Thus a restaurant needs to be in an accessible location and reservations and/or phone inquiries should be convenient.
One out of five (20%) of hospitality perception is attributable to friendliness of the server, host, and support staff.
While cleanliness appears to be relatively unimportant, it is accepted that customers see this as a given in restaurants. Unless there is a significant negative issue, it plays no role in overall loyalty.
Leverage cues that denote high food quality (e.g. smaller portions, better ingredients)