CHAIN REACTION: Happy staffers help create happy customers - and sweeter profits.
At O'Charley's, it's a matter of keeping "The Promise." At Panda Inn, it's as simple as a server remembering that a customer had visited the month before to celebrate a birthday and asking how he enjoyed it. At Johnny Rockets, part of the strategy involves drawing a smiley face with a ketchup squeeze bottle on an empty, white plate.
Each instance occurs in the splinter of a moment during the course of a day, but each can have a profound, long-term effect, turning a simply satisfied customer into a highly satisfied one who represents your most loyal customer base, and in turn, contributes to increased sales growth.
The bottom-line results of highly satisfied customers can't be understated. The Harvard Business Review succinctly summarized the impact in an article titled, "Why Satisfied Customers Defect." One sentence should be enough to unsettle the stomachs of restaurant owners or managers smug about the fact they have legions of "satisfied" customers: "The gulf between satisfied customers and exceptionally satisfied customers can swallow a business," the authors wrote.
Highly satisfied customers are the lifeblood of any successful multiunit concept, but gaining that favor is easier said than done. That's because once an individually successful restaurant concept starts to multiply, it steps into an entirely different arena in which the same steps that brought initial success must be duplicated and multiplied by the tens or even hundreds.
Concepts such as O'Charley's, Panda Inn and Johnny Rockets have built loyal customer followings by adhering to details that might seem insignificant to the casual observer but go a long way toward gaining that 5 percent increase in customer loyalty that can improve profits 25 to 85 percent, according to the Harvard Business Review.
The Experience Factor
Johnny Rockets, a Los Angeles-based chain with an all-American diner look and feel, has more than 150 restaurants in 29 states, but there are more than hamburgers and malts being sold. Along with freshly baked apple pie, Johnny Rockets is dishing up an experience.
Servers dance on the half hour, twirl straws, serve those smiley faces of ketchup with every order of fries and make sure that every party of customers has a nickel for the tabletop jukebox.
It's a highly choreographed experience, but one guests notice with obvious fervor. Johnny Rockets was recently ranked by Citysearch as one of the top 10 family-friendly restaurants in markets across the United States.
Highly satisfied customers are the lifeblood
of any successful multiunit concept.
Johnny Rockets' strategy not only works, but might be a signal for others to join as authors Joseph Pine and James Gilmore observed in The Experience Economy: "Those businesses that relegate themselves to the diminishing world of goods and services will be rendered irrelevant. To avoid this fate, you must learn to stage a rich, compelling experience."
Those are words Johnny Rockets has obviously taken to heart.
At O'Charley's, a casual dining chain with more than 200 locations in 17 states in the Southeast and Midwest, employees continually hear about O'Charley's "promise," which incorporates the tenets of fast, friendly, knowledgeable and appearance.
"We believe if you do these things every day, you'll be very successful and gain a great deal of loyalty from your guests," says Susan M. Osterberg, O'Charley's chief support officer. "Whether you're in management, a server or a line cook, we tell people how that promise can be delivered in their position. If everyone executes their part of the promise, it all comes together."
When employees recognize they are in a good system and identify positively with it, that has a huge impact on how they deal with customers. That's evidenced in The Service Profit Chain, written by several Harvard Business School professors, which showed how employee satisfaction affects customer satisfaction, which in turn drives sales growth and profitability.
In 1973, Master Chef Ming-Tsai Cherng and his son, Andrew Cherng, opened the first Panda Inn in Pasadena, CA. While the casual chain has remained small with five locations in Southern California, it spawned the highly successful Panda Express in 1983, whose 635 locations today make it the No. 1 Chinese quick-service concept in the country.
Anna Yee Nero, executive director of marketing for Panda Restaurant Group, says a positive working environment and personal touches offered by the waitstaff at Panda Inns have had a strong impact in building a loyal customer base over 31 years. Servers not only remember birthdays, but even drink and menu preferences for many customers.
"When I am in the restaurants, it's very clear that they remember certain things about their customers because they want to and because they enjoy working at our restaurants," Nero says.
The Service Recovery Phenomenon
In baseball, it's called a blown save when a pitcher loses a lead for his team late in the game. In the restaurant industry, "service recovery" is the PC definition for what ensues after a hot meal is delivered cold or not at all. But don't fret, because a blown save can easily be turned into a golden opportunity to earn a loyal customer.
When a mistake happens, own up to it and make it right. A customer who was ready to walk out in disgust will now likely have a deeper loyalty than the one who had no problems and no emotional involvement.
Service recovery, however, has a limited lifespan. It can occur only once or sometimes twice with a customer before further mistakes and the ensuing recoveries are viewed as incompetence.
One final method of building loyalty is to provide such a consistently good experience that customers visit simply by habit, much as they go to a favorite gas station or coffee shop. It becomes an almost ingrained response. When they choose to go to dinner, there is always one option above others.
"There are pure expectations that guests have," says O'Charley's Osterberg. "It might not seem glamorous, but the bottom line is that people want a good, reliable, consistent place to eat."
If chains have successful systems in place or are making changes to perfect their customers' experience, it's integral that some type of scientific evaluation be used to help determine whether expectations are being met at some measurable level. Measuring customer satisfaction is especially critical to multiunit operators because it allows them to monitor all their locations, whether they number 50 or 500. Customers are the ultimate arbiter of performanceññand their loyalty hangs in the balance if those expectations aren't being fulfilled.
Jack Mackey, vice president of Kansas City-based Service Management Group, speaks on service improvement strategies nationwide and has consulted with organizations such as MasterCard, Bombardier, the American Culinary Federation and the International Customer Service Association. For more information, visit www.servicemanagement.com.