NPD: Good service is great for business across all segments – Nation’s Restaurant News

By FERN  GLAZER

(July  13, 2009) Deals and discounts may get
cash-strapped consumers through a restaurant’s door, but excellent customer
service is what will keep them coming back—even after the economy improves and
menu prices increase, say officials at The NPD Group.

Independents outshine chains in
service ratings
percent
of casual dining customers citing excellence in each area

width="10%" align=center border=0>

src="/images/4325/4325NRN_ConsumerTrends-fig1.jpg">

SOURCE: THE NPD GROUP/CREST

According to new data from the Port Washington, N.Y.-based market
research firm, consumers rate service high on the list of reasons for visiting
restaurants, despite the tough economy. But not all restaurants receive high
marks in the area. Consumers are more satisfied with the service they receive at
independent restaurants than what they experience at chains.

“Service is part of the value equation; it’s not just price,” said
NPD analyst Bonnie Riggs. “Sometimes we lose sight of that. It does have an
impact, and it does build loyalty.”

When consumers who cut back on restaurant visits were asked by NPD
what would entice them back, service attributes were high on the list of
responses. While “price discounts on a regular menu item” and “coupon for free
item” were the biggest lures, followed by smaller “portions at lower prices,”
another popular response was “polite staff.”

“In these economic times…consumers just need a feel-good thing,”
said Riggs.

Respondents said that independents in both the casual-dining and
quick-service segments delivered more pleasant experiences than chains, NPD
found.

In the year ended in March, 49 percent of consumers surveyed rated
casual-dining independents as excellent on “pleasant and friendly service,”
compared to 45 percent for casual-dining major chains. Forty-eight percent rated
casual-dining independents as excellent on “responds to problems,” compared to
41 percent for major casual-dining chains. More consumers also rated other
service-related attributes, such as “made me feel like a valued customer,”
“fast, efficient service” and “order accuracy” as excellent at independents, but
not so at chains.

Not only are the most recent customer satisfaction ratings for
casual-dining chains low, but NPD also found that they’ve been on the decline
for several years.

Good service at a lower price is likely another reason consumers
are more satisfied with independents, noted Riggs. According to NPD, small
casual-dining chains boast the highest check average at $15.78, followed by
major casual-dining chains at $15.43. At just $11.20, casual-dining independents
have the lowest check average.

“Not only am I paying more when I visit a casual-dining chain, but
the service is not up to par when compared to indies,” said Riggs of many
consumers’ perception.

It appears that consumers are showing their appreciation for
casual-dining eateries that give good service by visiting more frequently.

In the quarter ended March, visits to casual-dining independents
were up 1 percent. In contrast, visits to major casual-dining chains and small
casual-dining chains were down 5 percent and 13 percent, respectively. In
addition, casual-dining independents were considerably stronger than the segment
overall, which was down 4 percent in the most recent quarter.

In the quick-service segment, only major chains maintained traffic
in the most recent quarter, mainly through unit expansion. Still, the data
reveal that consumers do not perceive the big fast-food chains as doing as good
a job with customer service as their independent competitors.

In the year ended in March, only 30 percent of consumers rated
“pleasant, friendly service” as excellent at major quick-service chains,
compared to 37 percent at quick-service independents. Consumers were also not as
satisfied with major quick-service chains’ ability to make them feel like valued
customers. Only 25 percent rated “made me feel like a valued customer” as
excellent at major quick-service chains, compared to 34 percent at quick-service
independents. More consumers also rated “fast-efficient service,” “responds to
problems” and “order accuracy” as excellent at independents than at major
chains.

At $4.80, major chains have the lowest check averages in the
quick-service segment, followed by small chains at $4.77 and independents at
$5.61.

“The lower the price point, the lower the expectations,” said
Riggs. “[QSR] will have to ante up when it comes to service.”

One reason chains may not be delivering service as well as they
can is because many have cut their training budgets, observers say.

According to the “2009 State of Training and Development in the
Hospitality Industry” report from the Council of Hotel and Restaurant Trainers,
or CHART, in the past 18 months more than half of foodservice operators surveyed
had reduced their training budgets.

“Especially in this economy, people are looking for a good
experience…places that make them feel good, as opposed to just food,” said John
Isbell, president of CHART, on why customer service training is more important
than ever. “If [operators] are smart…they’ll hire the right people, train the
right people.”

Tim and Nina Zagat, founders of the Zagat restaurant guides, agree
that more training is the solution to the industry’s service woes. In a recent
blog post, the couple said “service is the weak link in the restaurant
industry.”

Consumers may not expect exceptional service at major fast
feeders, but some quick-service chains have long been committed to training
their employees to give it. Many also note that they have reaped the
benefits.

At Prairie du Sac, Wis.-based target=" _blank">Culver’s, crewmembers have always been trained to
cheerfully bring customers’ orders to the table, offer to get additional items
and bus tables, officials said. The commitment to guest service has helped the
burger and custard chain achieve positive same-store sales growth despite the
recession.

“If you’ve [only] got $5 to spend, where are you going to go to?
The place that treats you well,” said James Blystone, Culver’s director of
marketing. “[We train] our people that our guests are an extension of our
family.”

To ensure that service is as good in Kansas City as it is in
Phoenix, Culver’s has owner-operators in each of its 400 restaurants.

“That allows us to know our guests and know our communities,” said
Blystone. “We spend a lot of time talking to our franchise business partners,
making sure every guest leaves Culver’s happy.”

Recognizing the power of good service to maintain loyal customers,
some savvy quick-service operators have recently adopted similar
full-service-style practices. For example, a few years ago Carpinteria,
Calif.-based Carl’s Jr.
launched its now-famous Six Dollar Burger and, along with it, its Six Dollar
Service program.

While the chain had always delivered guests’ orders to their
tables, Carl’s crewmembers are now trained to offer drink refills, bus tables
and open doors for customers.

“[These are] just small elements that add up to a better
experience,” said Noah Griggs, executive vice president of training for the
Carl’s Jr. and Hardee’s
brands. “[Guests] come back, and its gives you a win-win.”

The program has been so successful at Carl’s Jr. that CKE has
since rolled it out at the Hardee’s brand. According to Griggs, independent
research reveals that both concepts’ service ratings have significantly improved
since implementing program.

style="MARGIN-TOP: 1.5pc; FONT-SIZE: 10pt; MARGIN-BOTTOM: 1pc; MARGIN-LEFT: 1pc; COLOR: #000000; FONT-FAMILY: Arial, Helvetica, sans-serif">Nation’s
Restaurant News has an exclusive agreement to obtain the NPD Group data and
research findings that appear on the Consumer Trends page.