Unspoken promise

Perhaps nothing is more important to a business than its reputation. At every customer touch point you have the opportunity to build brand equity and develop customer loyalty. From the neighborhood diner to national chain, every restaurant makes an unspoken promise through its menu, d ƒ ©cor and service quality. Consistent execution of quality and service is a nonnegotiable component of success and ultimately customers will come to gauge each restaurant’s brand in these areas. For businesses with more than one location it is critical to maintain consistency among multiple stores.Utilizing a consistent series of anonymous on-site evaluations, data can be collected to detail the actual guest experience versus the expected guest experience based on your guidelines, policies and philosophies. Field evaluators gather objective information areas such as:

• telephone skills/hostess service
• guest experience
• food quality and temperature
• facility condition
• cleanliness of restroom facilities
• parking-lot condition
• dress code compliance
• visibility and interaction of management staff
• compliance with franchise agreement.

Coaching tool

As a brand protection device, your mystery shopping program can function both as a coaching tool and a quality assurance monitor. When the project is specifically designed for your business, you can gain information about how closely policies, guidelines and standards are executed. With a mystery shopping program you can quickly learn:

1. If focus items, such as seasonal or daily specials are being presented to each guest
2. How skilled frontline employees are at handling guests
3. Whether the overall operating philosophy is being practiced

As the data from completed evaluations accumulates, you can use the analysis tools included with most mystery shopping programs to track key performance areas, identify trends and uncover areas of strengths and weaknesses.

For the multi-unit operator, in both the franchise and non-franchise environments, mystery shopping provides a consistent method of collecting data that can be used to create comparison and performance reports. These reports can range from comparison of overall evaluation scores to trend analysis and tracking of key performance criteria. Reports commonly track data on a rolling 12-month, month-to-day and/or year-to-date basis.

In a franchise environment, the presence of an established mystery shopping program provides value for the franchisee as well as the franchisor/area developer. When these programs are implemented early in the life cycle of the business, they tend to become an accepted part of the brand culture and a tool that has value for all stake-holders. An established program can be used as a way of differentiating a franchisor from their competitors. From a franchisee perspective, it:

• offers access to an established program
• provides a tool for employee motivation, coaching and recognition
• begins data collection from the time a unit is open for business
• gives access to best practices from other business units
• sets a baseline to compare unit performance to established indexes.

By including provisions for on-site evaluations in the franchise agreement, you establish the presence of a mystery shopping program from the onset as your way of doing business. The program becomes simply one of the many components that you have in place to help them succeed. Franchisees gain value because they do not have to spend any of their resources developing a similar program. In addition, performance data accumulates from the first day a unit is open for business. For all operators, the result over time is a robust base of performance data that can be used to sharpen staff performance, track progress of training, marketing and similar initiatives as well as quickly identify potential areas for improvement.

Across multiple areas

Your mystery shopping program should be both affordable and provide a high return on investment. A well-executed mystery shopping program will supply you with data that can be used across multiple areas of your business. For example, your program should sup-port your operations department by supplementing the on-site visits of your field staff with the structured operational review provided by the mystery shopping evaluation form. In this role, the program becomes an extra set of eyes and ears for your organization. For the franchise operation the program can provide valuable insight and data to all the members of your team who inter-face with individual franchisees.

The mystery shopping reports can provide early detection of possible process or policy issues as well as identify best practices that can be shared with your management team across all locations.

For those in marketing, your mystery shopping program can provide specific feedback about the presence of marketing materials, if the staff is consistently highlighting the sale of focus items and the condition of menus, menu boards and other signage. The mystery shopping program can also be used to identify and reward star performers. You may find that some of your current food and beverage purveyors may help defray the cost of your program if you highlight their product as part of the monthly shopping scenario.

Mystery shopping programs that are tied to employee incentives can provide a powerful motivator for workers to maintain consistent service levels. Bonuses and rewards can be linked to program results, encouraging employees to embrace operational policies and procedures. The data from the reports can also be a key tool in training and coaching. You can quickly take action on areas requiring improvement and monitor the progress over time with objective data.Reviewing the purchase receipts submitted as a requirement of your program may assist in accounting compliance as well as discouraging the giving away of items without properly accounting for them.

New life

The Internet has breathed new life into the mystery shopping industry. Field evaluators can complete and upload reports in 24 hours. The almost instantaneous feedback from an on-site operational assessment can alert you to potential problems which can be acted upon immediately. And, over the long-term, the consistent collection of data provides a series of impressions. You can identify trends that can be addressed with training, one-on-one coaching or counseling. Industry giants like McDonald’s, Starbucks and Chipotle have long-standing programs. Both Brinker International (Chili’s/On the Border) and Carlson Restaurants Worldwide (T.G.I. Friday’s) have programs in place, as do regional chains such as Wingstop, IHOP and Sonic.Program frequency can be adjusted to meet your individual needs but even one visit per month will return future dividends. The information that you gather using this technique cannot be captured using comment cards or similar devices. In fact, the companies referred to in the preceding paragraph use the data from both mystery shopping and customer feedback to drive their decision-making process. The blend of objective reporting (mystery shopping) and subjective feedback (from guests) can be an effective way to keep in touch with both guest expectations and the quality of the guest experience.

Like any other construction project, building customer loyalty takes a   careful and well thought out measurement   strategy.   There are two elements that go into painting a complete picture of your team’s performance.     One aspect is subjective feedback or Voice of the Customer (VOC) data. Voice of the Customer will help you determine how well your team is meeting your customer’s expectations.   Typically, this information is captured through comment cards or web/telephone surveys.

The second component measures performance against your own standards.   We call this factor Voice of the Process (VOP).   VOP data will help you quantify, measure and track how well your team is delivering on the policies, philosophies and guidelines that make your brand unique.       Our mystery shopping programs are the primary method we use to gather VOP data.

Which is more important? That’s easy: Both.   The two elements complement each other and their value is greater when they are used together rather than separately.

Customer feedback is important because it keeps you in touch with the level of service that your customers expect.   This data can also be used to track shifts in consumer attitudes, preferences and behavior.     When viewing customer feedback it is important to remember that your customers wants and needs are not always in line with your business model or philosophy.

Your operating principles, guidelines and philosophies can be quantified   with data   gathered   through the mystery shopping process.   These reports will allow you to quantify and track your team performance as it relates to how you want thing   done.

The marriage of VOC and VOP data creates a powerful tool that will allow to stay in touch with your customer’s wants and needs while tracking your team’s performance against

Word of mouth is still the best advertising tool any business can use to market their business.     Social media applications like Facebook,and Twitter may have increased the velocity at which information moves, but in the end it’s just one person telling another about their experience.     Against this backdrop, it is crucial for a business owner and their management team to have access to data that allows them to measure and track performance against expectations.

Consider how hard you’ve worked to establish your brand, develop a outstanding reputation and maintain excellent word of mouth advertising.     Think about the price of driving new customers to your business versus developing repeat clients.     Would you spend $3/day to protect your brand?

The average cost of a full featured mystery shopping program is about $3 per day.   Our mystery shopping programs are designed to measure your team’s performance against your organizational standards.   We deliver reports that contain timely and actionable data based on an objective assessment of the guest experience.       Mystery shopping is the most affordable and cost effective way to measure how well your brand promise being maintained.

With rising energy costs, all businesses are seeking ways to maximize cost and productivity while protecting and expanding market share. Mystery shopping programs can be a low-cost, high-value investment that enables you to collect critical frontline data. Unspoken promise Perhaps nothing is more important to a business than its reputation. At every customer touchpoint you have the opportunity to build brand equity and develop customer loyalty. From the neighborhood diner to national chain, every restaurant makes an unspoken promise through its menu, decor and service quality. Consistent execution of quality and service is a non-negotiable component of success and ultimately customers will come to gauge each restaurant’s brand in these areas. For businesses with more than one location it is critical to maintain consistency among multiple stores. Utilizing a consistent series of anonymous on-site evaluations, data can be collected to detail the actual guest experience versus the expected guest experience based on your guidelines, policies and philosophies. Field evaluators gather objective information areas such as: – telephone skills/hostess service; – guest experience; – food quality and temperature; – facility condition; – cleanliness of restroom facilities; – parking-lot condition; – dress code compliance; – visibility and interaction of management staff; and – compliance with franchise agreement Coaching tool As a brand protection device, your mystery shopping program can function both as a coaching tool and a quality assurance monitor. When the project is specifically designed for your business, you can gain information about how closely policies, guidelines and standards are executed. With a mystery shopping program you can quickly learn: 1. If focus items, such as seasonal or daily specials are being presented to each guest. 2. How skilled frontline employees are at handling guests. 3. Whether the overall operating philosophy is being practiced. As the data from completed evaluations accumulates, you can use the analysis tools included with most mystery shopping programs to track key performance areas, identify trends and uncover areas of strengths and weaknesses. For the multiunit operator, in both the franchise and non-franchise environments, mystery shopping provides a consistent method of collecting data that can be used to create comparison and performance reports. These reports can range from comparison of overall evaluation scores to trend analysis and tracking of key performance criteria. Reports commonly track data on a rolling 12-month, month-to-day and/or year-to-date basis. In a franchise environment, the presence of an established mystery shopping program provides value for the franchisee as well as the franchisor/ area developer. When these programs are implemented early in the life cycle of the business, they tend to become an accepted part of the brand culture and a tool that has value for all stakeholders. An established program can be used as a way of differentiating a franchisor from their competitors. From a franchisee perspective, it: – offers access to an established program; – provides a tool for employee motivation, coaching and recognition; – begins data collection from the time a unit is open for business; – gives access to best practices from other business units; and – sets a baseline to compare unit performance to established indexes. By including provisions for on-site evaluations in the franchise agreement, you establish the presence of a mystery shopping program from the onset as your way of doing business. The program becomes simply one of the many components that you have in place to help them succeed. Franchisees gain value because they do not have to spend any of their resources developing a similar program. In addition, performance data accumulates from the first day a unit is open for business. For all operators, the result over time is a robust base of performance data that can be used to sharpen staff performance, track progress of training, marketing and similar initiatives as well as quickly identify potential areas for improvement. Across multiple areas Your mystery shopping program should be both affordable and provide a high return on investment. A well-executed mystery shopping program will supply you with data that can be used across multiple areas of your business. For example, your program should support your operations department by supplementing the on-site visits of your field staff with the structured operational review provided by the mystery shopping evaluation form. In this role, the program becomes an extra set of eyes and ears for your organization. For the franchise operation the program can provide valuable insight and data to all the members of your team who interface with individual franchisees. The mystery shopping reports can provide early detection of possible process or policy issues as well as identify best practices that can be shared with your management team across all locations. For those in marketing, your mystery shopping program can provide specific feedback about the presence of marketing materials, if the staff is consistently highlighting the sale of focus items and the condition of menus, menu boards and other signage. The mystery shopping program can also be used to identify and reward star performers. You may find that some of your current food and beverage purveyors may help defray the cost of your program if you highlight their product as part of the monthly shopping scenario. Mystery shopping programs that are tied to employee incentives can provide a powerful motivator for workers to maintain consistent service levels. Bonuses and rewards can be linked to program results, encouraging employees to embrace operational policies and procedures. The data from the reports can also be a key tool in training and coaching. You can quickly take action on areas requiring improvement and monitor the progress over time with objective data. Reviewing the purchase receipts submitted as a requirement of your program may assist in accounting compliance as well as discouraging the giving away of items without properly accounting for them. New life The Internet has breathed new life into the mystery shopping industry. Field evaluators can complete and upload reports in 24 hours. The almost instantaneous feedback from an on-site operational assessment can alert you to potential problems which can be acted upon immediately. And, over the long-term, the consistent collection of data provides a series of impressions. You can identify trends that can be addressed with training, one-on-one coaching or counseling. Industry giants like McDonalds, Starbucks and Chipotle have longstanding programs. Both Brinker International (Chili’s/On the Border) and Carlson Restaurants Worldwide (T.G.I. Friday’s) have programs in place, as do regional chains such as Wingstop, IHOP and Sonic. Program frequency can be adjusted to meet your individual needs but even one visit per month will return future dividends. The information that you gather using this technique cannot be captured using comment cards or similar devices. In fact, the companies referred to in the preceding paragraph use the data from both mystery shopping and customer feedback to drive their decision-making process. The blend of objective reporting (mystery shopping) and subjective feedback (from guests) can be an effective way to keep in touch with both guest expectations and the quality of the guest experience.

In its fourth-quarter 2008 earnings report, McDonald’s reported that same-store sales increased by an impressive 5 percent in the U.S. and 7.2 percent globally. Those figures stood in stark contrast to the rest of the news coming from the restaurant industry, which for months has been a bleak litany of location closings, plummeting earnings and declining traffic.

With no end in sight to the bad tidings, we spoke to three researchers who specialize in the restaurant industry to get their insights on how marketing research – from online research with recent diners to comment cards and IVR-based surveys and mystery shopping – can help dining establishments weather the current storm.

Beyond discussions on the role of research, one main piece of advice for restaurateurs emerged from our conversations: stay the course. In other words, whatever your outlets do well, keep doing it. If you’re known for offering cheap food made fast, keep it coming. If customers come to your chain expecting a fun, festive atmosphere, make sure that’s what you deliver. Now is no time to cut back or scrimp on the things that make your brand what it is. “Stick to your marketing message but also make sure you deliver on your marketing message. Say it and live it,” says Rick Garlick, senior director of strategic consulting at St. Louis-based Maritz Research.

In addition to delivering on core brand promises and upholding quality, restaurants of all stripes can use research to make sure employees are adhering to corporate service standards and practices and, perhaps more importantly, that they are excelling as brand ambassadors. “Every restaurant has policies and philosophies and guidelines and a set of standards they want their teams to execute, and it can be something as simple as a guest being greeted within 30 seconds of being seated, the timing of entrees, checking back to make sure every guest is thanked on the way out. Without any measurement device, it’s hard to determine if those things are being done and how well they’re being done,” says David Agius, owner, The Sentry Marketing Group, Dallas.

Agius argues that that’s where mystery shopping can be of value, as it can note the quality of the greetings or goodbyes, rather than just the fact that they were uttered, and get at some of the satisfaction-enhancing nuances of service. “At a full-service restaurant, let’s say the standard is that every guest is said goodbye to. That may be the standard but what was the tone of the goodbye? How personal was it? How sincere does somebody appear? Feedback on service doesn’t cost anything to correct but it can be the difference between somebody coming back or not coming back,” he says.

What value means

First and foremost, the consumers who are still dining out are looking for the most bang for their buck when it comes to spending their precious discretionary income, so eateries would be smart to consider emphasizing value. “Whether you’re a fast-food player or a fine-dining establishment the last thing you want to do is alienate customers by lowering quality,” says David Morris, senior food and restaurant analyst at Chicago research company Mintel. “Really, offering quality food at a fair price is the minimum requirement for success for restaurants as the environment becomes more competitive in the downturn. Consumers are in the driver’s seat in being able to seek out quality dining experiences that deliver more on value.”

But of course, different dining segments define value differently, Morris says, and research can help by showing a restaurant what value means to its specific consumer segments. “For a fine-dining establishment value is important but you’re looking at a very different [customer] rationale for choosing a fine-dining establishment. These operations need to be a lot more artful in how they communicate value, more subtle. They need to weave elements of value into those that enhance the spirit of indulgence and celebration that comes with the fine-dining experience, extras that may further pamper the diner, rather than something like a three-for-one special.”

While they attempt to deliver value to their customers, restaurants can also create value for themselves, Agius and Morris both suggest, by making better use of ingredients that might already be on-hand. Restaurants may want to try to “thin down the number of SKUs that they bring in – you’ll see a lot of them focusing on in that right now,” Agius says. “They have a few items that are used in a multitude of ways and the focus is on executing the menu really well and making sure that the food and the guest experience live up to expectations.”

Diners’ emotions

While the standards of quality food, good service and fair prices are givens, there is also some room for restaurants to appeal to diners’ emotions. Not specifically of the “come enjoy a great meal to forget about your troubles” ilk but rather reminding consumers of the reasons they dine out in the first place: to mark special occasions, spend quality time with family and friends or to establish and nurture relationships. “You can’t give them money to spend, but what you can do is remind consumers how important dining out has been to them and the emotional positives it has provided and can continue to provide,” Morris says. “If you look at some of the most prevalent reasons for dining out, they involve celebration, treating oneself, doing something special for other people – these are all things that I think will still be important to consumers in this environment. Will they be able to spend as much? In all likelihood, no, but strong and savvy marketing strategies that connect to those need-states can insure that consumers still look to restaurants to help satisfy those needs.”

Earn loyalty

Learning about diners’ motivations and how they make their choices is one part of a three-phase research approach, Garlick says. The other two parts involve examining how effectively restaurants deliver on the dining experience promised by their marketing campaigns and how restaurants can earn and keep diners’ loyalty. “We believe that the whole key to success in restaurants and the hospitality industry in general is creating a differentiating experience for the customer,” Garlick says. “Once we understand what customer motivations are through choice research, then customer experience research or customer satisfaction research can take the next step to look at how well the restaurant is delivering on the value proposition that brought people in in the first place.

“So with a brand like Chili’s for example, which is all about a fun dining experience, beyond asking if the food was hot, the server friendly, and did you get your food in a timely manner, you want to see if it was a fun experience. Of all of the things the brand is trying to accomplish, did it deliver? Did it resonate with the consumer?”

Plan to cut back

A December 2008 Maritz survey of frequent diners found that 34 percent of people said that they plan to cut back on the number of times they dine out in the next six months and 20 percent said they planned to downgrade the class of restaurants that they frequent. Thus fine-diners will be moving toward the Red Lobsters and Olive Gardens of the world and fans of those restaurants will be trending toward the fast-food outlets.

In other words, Garlick says, “The higher up you are, the more likely you are to suffer in these next six months. These tough times are, no pun intended, a golden opportunity for McDonald’s and similar restaurants because they have the opportunity to appeal to that segment who are trading down. A good way for those kinds of restaurants to use research is to look at the needs of these people who might be using them more now than in the past. What are they looking for? What kinds of products and services might represent some new opportunities to capture their business going forward?”

“In an economic downturn I think it’s more important than ever for restaurants to really understand their consumers – what they’re looking for and how the pressure of the recession is affecting their spending patterns, to be able to develop strategies to help maintain guest traffic, which is really what it’s all about right now,” Morris says. “The restaurant industry is really bleeding guest traffic and feeling a lot of pressure because of the migration on the part of the consumer to either trade down to cheaper restaurants or trade out of restaurants and back to food at home. Ultimately, it’s important to know customers as well as possible in order to target the practical, emotional and lifestyle rationales consumers have in choosing to dine out.”

Trimmable expense

Just as consumers these days may regard dining out as a luxury, restaurant firms may see market research as a trimmable expense, rather than as a necessary tool to help market their brands and maintain guest traffic. Not surprisingly, all three researchers argued that now is not the time to cut back on marketing research. Rather, it’s time to use it to ensure that the dollars being spent, on everything from marketing to everyday operations, are working their hardest. “If I have fewer marketing dollars to spend, and fewer ad dollars and promotional dollars, and with all of the strategic decisions I need to make to compete in a very tight market, I need to make my choices wisely,” Garlick says.

“So much of restaurant research has devolved into immediate feedback. Clients want to buy surveys about was the food hot, the service timely, would I come back here, etc. But what they don’t do is link their brand research and their choice research into their experience research. You have to go beyond just measuring quality. You need to create the experience that will make similarly-minded customers spread the word to other customers. We know the importance of word of mouth in a lot of industries but it is especially important in the restaurant industry. Restaurants need to connect to people at a real emotional level, to the point where they really like a restaurant and it becomes part of their daily experience and becomes a hard habit to break rather than something that can be tossed overboard in tough times.”

Agius says some clients are asking why they should spend money on a marketing research program right now. “Our answer back is, ‘Why wouldn’t you?’ Don’t you want to know if the people who are coming into your restaurant every day are being taken care of in a manner that is consistent with your operating processes, philosophies and procedures?”

More selectively

While a certain segment of the population will have to stop dining out, the vast majority will keep doing so, just more selectively. “Over the past 15 to 20 years, especially when you look at younger consumers, their lifestyles have been tailored around going out to eat. It’s a $500-billion industry, so it’s those consumers who might find it more difficult to pull back from behaviors that are such a part of their lifestyle,” Morris says.

Though short-term issues like customer traffic are certainly paramount, Morris argues that keeping an eye on long-term trends during a recession can help poise a restaurant for even greater success in a more spend-friendly economic environment. “It’s very important not to lose sight of the bigger picture. I think looking at food quality and playing to one of the longer-term trends, like healthfulness or convenience, is going to be very important. These trends don’t evaporate in a recession – they’re still there and need to be addressed. Healthfulness is something that is going to gain momentum. Whether restaurants like it or not, I think the government has already begun taking a closer a look at the caloric and content issues on restaurant menus and that’s only going to pick up. The issues the U.S. has with consumers being overweight and health care costs is something that’s going to be here now and three years from now and five years from now. Those are instances where I think restaurants can continue to prepare themselves for, really, the inevitable change that will come with requiring healthier fare in more transparent ways.”