A couple of years ago, a Harvard Business Review study attempted to sort out the correlation between online reviews and revenue in the restaurant/hospitality business.
Professor Mike Luca studied the revenues and customer ratings of an independent Seattle-area restaurant before and after Yelp launched in 2004. In his research, Luca concluded each star on the Yelp scale was worth a 5- to 9-percent change in revenue—either up or down.
The study seemed to establish something we all intuitively knew—online reviews matter, and not just a little.
Most everyone you know consults the ratings—whether it’s on Yelp, Urbanspoon, dine.com or elsewhere—before setting foot in an eatery for the first time. Mobile technology has made customer opinions ubiquitous and easy to access, anywhere and anytime. We all do it.
That’s why hospitality businesses will have no trouble finding firms and consultants offering to help “manage” their online reputations, often by gaming the results on Yelp and other sites. One academic study last year found that perhaps four in 10 online reviews are phonies.
Although I understand the strong motivation to focus on managing your online reputation after the fact, there is a better—and more fruitful—path: Simply ask your customers to review you on the spot.
By using digital survey tools to gauge the restaurant experience, you get a slew of benefits, starting with the ability to show customers you truly care what they think. And, used correctly, digital surveys allow you to address any concerns they have, likely preventing unfortunate negative experiences from ever appearing on Yelp.
To manage your reputation more effectively, my advice is to focus less on influencing the online channel and more on the customer and his or her experience.
An old idea made effective through technology
Customer surveys are, of course, not a new idea. Comment cards are as old as the hills. A newer iteration is the survey website, where customers are asked to go home and log into a web site to give their opinions.
These are nice ideas, and before the digital age, comment cards were state-of-the-art, but the results were always disappointing. For one thing, the return rates for such surveys historically are in the range of roughly five to 10 percent if you’re lucky, far short of a significant sample.
Who do you think makes up that five to 10 percent? Unfortunately for restaurants, human nature makes us more likely to register complaints than compliments. And by the time they’re venting their anger, they’re long gone from your business, and you have little ability to try and address their concerns.
What if you could be smarter and more proactive?
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On the flip side, what if you could nip comments by disgruntled customers in the bud while gathering a fuller, more-nuanced sample of what your customers think of you?
Digital survey tools presented at the table can have a response rate of more than 80 percent in some cases, largely because it’s presented immediately after the meal on a tablet device people enjoy using.
You also get the feedback instantly, so a manager can intervene and work to placate customers before they leave angry, and before they can post something nasty on Yelp.
Best of all, from a perspective of improving overall customer experience, you build a database that delivers early insights into systematic problems with operations or specific staff members. Are there particular times of day you have problems? Are there certain menu items customers really don’t like? Survey tools can be tweaked and customized quickly and for almost any need.
What I’m really advocating is a more holistic and informed approach to reputation management. By turning your focus to gleaning insights into customer opinions—and more of them—on the spot, you shouldn’t have to worry so much about what they’ll say on social media.
Sure, they’ll still give their opinions on Yelp and elsewhere, and you’ll still want to keep an eye on that. But, chances are, more of those opinions will be positive.
Skip Cass is CEO of Long Range Systems, which rose to prominence as the developer of the guest pager in the restaurant industry in 1993. Today, LRS supplies guest pagers and solutions for wait list management, table tracking and guest surveys.