## Posts Tagged ‘restaurant management’

### Isolating the Drivers of Customer Satisfaction

April 20, 2009

In the last post, we discussed how to set up a customer satisfaction survey.  Today, we’ll discuss how to analyze the results of that survey to identify the attributes that drive satisfaction.  Let’s again assume that you’re a restaurateur and you’ve administered a C-Sat survey.

Gather your dependent and independent variables

Your dependent variable – the variable you want to measure – is the answer to the question: “Overall, how satisfied were you with your dining experience tonight, on a scale from 1 to 5?”  Assume 5 is “very satisfied” and 1 is “very dissatisfied.”

Your independent variables are derived from the questions about the actual service delivery:  “The server greeted my party as we entered the restaurant.” This can be a point scale ranging from “strongly agree” to “strongly disagree,” or it can be a dichotomous variable: 1=”yes” and 0=”no.”  Other independent variables can be derived from questions such as: “The manager was visible on the floor,” “the food was of adequate temperature,” and/or “the server checked back with us frequently.”

Use Regression Analysis

The easiest means of identifying satisfaction drivers would be regression analysis.  Regression analysis with a few variables can easily be performed in Microsoft Excel.

When you perform regression analysis, Excel (or any other statistical analysis tool) will examine all the data points and generate an equation.  This equation will provide coefficients for each of the independent variables as well as values called a t-statistic.  Also, the equation will generate an intercept term.

Interpreting the results

Look at the t-statistic.  You want to make sure it is significant at either a 90% or (preferably) 95% confidence interval.  If the t-statistic is at least 1.645 (absolute value), it will be significant at the 90% level.  If the t-statistic is at least 1.96 (absolute value), it is significant at the 95% level.  At these levels, you can be confident 90 to 95% of the time that the independent variable is associated with satisfaction.

Also, look at the R-squared statistic – also known as the coefficient of determination.  This is a number from 0 to 1, and indicates the percentage of variation in the dependent variable that is explained by changes in the independent variables.  You want this number to be as close to 1 as possible, as it would mean 100% of the variation is explained.  If you have significant independent variables, but your R-squared is only 55%, that means that 45% of the variation in satisfaction is being explained by changes in factors you are not measuring.

Use your equation to predict satisfaction

Now that you have your equation, see how well it predicts satisfaction changes.  Using some satisfaction surveys that were not used to build the model, plug in the scores these respondents gave into the equation and see if the equation estimates an overall satisfaction score that approximates the one the respondent gave.  The equation’s predictive quality will be dependent on how close its estimates come to the actual.

Keep in mind…

• While independent variables that are significant are associated with the changes in the dependent variable, that does not mean they caused the change.
• You can model more than one dependent variable – but separately.  In this example, we modeled overall satisfaction.  In another case, you might want to use “how likely are you to recommend this restaurant to a friend.”
• A high R-squared doesn’t mean your model will be an accurate predictor of satisfaction.  Some models with high R-squared predict poorly while some with low R-squares predict quite well.

### “Must Haves” for Designing an Effective Customer Satisfaction Survey

April 18, 2009

Customer satisfaction surveys have unique features which make their designs and approaches differ from other types of surveys.  For one, they are much more time-sensitive (the customer must get the survey while his experience with your product or service is still fresh in his mind); their sample size is not known beforehand (the customer’s engagement with your company triggers the survey); and frequency of surveying customers must be carefully monitored, since some customers purchase more frequently than others, and surveying them each time can fatigue them and actually lower their satisfaction.

Aside from these differences, your C-Sat survey follows the same survey principles that other surveys do.  Today, we’ll discuss the ingredients for a winning customer satisfaction survey.

Remember to define  your objectives first!

As with any survey, if you don’t know what you want the information to tell you, you’re wasting time and money.  Let’s assume you own a restaurant.  Every restaurateur wants repeat customers, and higher check amounts.  Similarly, every waiter or waitress wants greater tips.

Hence, your objective might be: “To maximize the enjoyability of my patrons’ dining experience so that they will return often, spend more, and leave greater tips for the waitstaff.”

Base the survey questions on your objectives

Now that you know your purpose for the survey, you can design the questions.  You should always ask the standard satisfaction and loyalty questions:

• Overall, how satisfied were you with your dining experience at Sophie’s Gourmet Soups and Sandwiches?
• How likely are you to return to Sophie’s Gourmet Soups and Sandwiches?
• How likely are you to recommend Sophie’s Gourmet Soups and Sandwiches?

You should ask these questions first; I’ll explain shortly.  Next you should ask questions about the elements that can influence satisfaction.  For a restaurant, these can be numerous.  Recall that my March 16 post Customer Loyalty Key to Restaurants Surviving Recession cited some research that recommended asking patrons whether they were greeted by the server; whether the server checked back with them regularly; whether the server thanked them for their business; and whether the manager was visible to them.

You might also want to ask about the taste of the food; the temperature of the food; the cleanliness of the restuarant, and other features.  However, you must still keep the survey brief, especially in a restaurant, since the time patrons will be completing the survey is when they’re about ready to leave.

Your survey should ask the satisfaction and loyalty questions first because if you start out with questions such as “Did your server greet your party as you were being seated?” or “How would you rate the taste of your food,” a very bad or a very good experience with the subject of that one question can influence the answers to all the other experience questions, creating a “halo effect.”  Then, if you ask the overall satisfaction question at the end, you’ve essentially led them to the satisfaction answer.  Your findings will be biased.

Know your independent and dependent variables

Generally, your dependent variables will be the actual measures of satisfaction (overall satisfaction, likelihood of recommending to friend, etc.).  If you can tie the customer’s transaction amount to the survey, you can also use the check amount as a dependent variable.

Your independent variables include whatever drives your customers’ satisfaction.  In this case, the greetings, checking back, taste of food, etc.

You will want to determine which independent variable(s) has the greatest effect on satisfaction, so that you can adjust your customer service policies accordingly.

The next blog post will discuss how you can determine which independent variables drive satisfaction in more detail.

Last but not least!

Also remember to take into account the timing of your survey.  It should always be done while the experience is still fresh in the customer’s mind; you should not inundate the same customer with the same survey over and over again.  If a customer dines in your restaurant every day, do not expect him to take the survey each time;  it will get old very quickly.

Perhaps you can give the survey to every fifth table.  That would ensure that someone isn’t getting over-surveyed.

Also, offer an incentive for taking the survey – perhaps \$5 off their next dining experience.

And, as metnioned above, try to match the patron’s survey back to his/her spending amount.  For a restaurant, the waitstaff may write at the top of a (completed) survey the check amount and the tip amount.  This will help you determine how much satisfaction correlates with customer spending.  You might also want to track back spending of customers who declined to take the survey.  This can also yield valuable clues about these customers.

As you can see, C-Sat has lots of ground to cover.  Next post, we’ll talk about identifying the drivers of satisfaction.

### Customer Loyalty Key to Restaurants Surviving Recession

March 16, 2009

In just the past year, we have witnessed many restaurant chains filing for Chapter 11 bankruptcy protection – Black Angus Steakhouse, Metromedia Stakehouses (which operates Bonanza and Ponderosa steakhouses), VICORP (operator of Bakers Square and Village Inn Restaurants) – and the Chapter 7 liquidation of Bennigan’s.  The economy, undoubtedly, was a key culprit in these restaurants’  troubles.

While it is true the people dine out less when times are tight, it is also true that people do not stop dining out all together.  In fact, loyal customers continue to patronize restaurants that deliver a highly satisfying dining experience, according to an article in the March 2009 issue of Quirk’s Marketing Research Review by Joe Cardador and Mark Hunter of Kansas City, Mo.-based research firm Service Management Group.

According to Cardador and Hunter, highly satisfied restaurant guests spend slightly more money than guests who were merely satisfied.  In addition, highly satisfied restaurant patrons are twice as likely to return and three times as likely to recommend the restaurant to others than those patrons who were simply satisfied.

Creating the highly satisfying experience  that creates a loyal customer begins with the server, say Cardador and Hunter.  “By simply greeting guests, checking back with them regularly, thanking them for their business and ensuring that a manager is visible in the dining room, restaurants can nearly quadruple  (emphasis added) guest satisfaction compared to a guest who receives zero or just one of those behaviors.”

The authors go on to say that patrons who come to a restaurant either because of a highly satisfying prior dining experience or a recommendation tend to spend more money than those patrons coming into the restaurant because of a promotion or ad.  And customers who experienced all of the service behaviors stated above tend to tip better.

Cardador and Hunter’s article can be viewed online at Quirk’s web site.

The lesson applies not just to restaurants, but to all businesses.  Customers can be made loyal when businesses deliver more than they expect to receive.  And this does not mean giving away the store.  Overdelivering can be a simple and costless as those server behaviors above, or courtesy calls to customers telling them the status of an order.

In any case, it is far cheaper and more profitable to provide knock-your-socks-off service to customers than promotional discounts.  The former creates customers who value your company and your brand; the latter generates price-sensitve customers who will switch to your competitors for a better offer and lowers your brand’s image in their eyes.