Many restaurant chains are claiming their traffic is down because of Millennials' changing dining habits. And it is true that we are becoming a nation of “autonomous customers” who research restaurant reviews and move easily between brands. Another change affecting Millennial restaurant traffic is an increase in food-delivery services (see “Food-delivery services are exploding," October 10, 2017.)

However, flying in the face of the assertion that Millennials are the root problem with declining traffic, is the fact that many restaurants are experiencing growth in their traditional brick-and-mortar locations. The brands that are winning traffic understand that dining out is not just a transaction, but rather it is an experience. Consumers are looking for the best service, attention to guest needs and requests, meal recommendations and a genuine sense of caring from staff about delivering the best possible services.

But, according to our most recent Casual Dining and QSR Research, top-notch customer experience is being delivered by just a fraction of the restaurants in the casual dining sector. Case in point: The CEO of one of the casual dining restaurant companies that was built into a powerhouse entertainment destination now claims their sales are off due to Millennials no longer frequenting their restaurants.

Coincidently at the same time, our study results showed this restaurant chain to be one of the worst performing companies in the study with poor marks given for all operational matters such as cleanliness and speed of service, as well as associates’ friendliness and ability to offer meal recommendations. In addition, their customer recovery rate was at the bottom of the list. No wonder traffic from Millennials is down! If this company paid attention to the service that it was delivering—especially since its guests stay longer for the entertainment—then perhaps they could recover much of that Millennial traffic they have lost. 

Problems and their impact to future patronage

A surprising number of restaurant companies have very high incidence of problems and many are doing nothing to address them. Our study showed 11% of the 9,500 consumers we interviewed had a problem with the last casual dining restaurant they frequented. And the problem resolution rate was at an abysmal 49%. This means more than half those customers who experienced a problem did not get it resolved. And 31% of those who had a problem and had it resolved still indicated the experience negatively impacted their likelihood to return. And while that should be an unacceptable number to any operation, this perception is light compared to a whopping 67% of those who had a problem and did not have it resolved.  These guests indicated that the problem negatively impacted their likelihood to return. When you consider the typical restaurant customer count each week, these are huge numbers and are costing restaurants in terms of customers and brand equity—in a big way. The moral: get it right the first time, or quickly recover if you do make a mistake, or you’re out!

The impact of not responding to negative social media posts

Social media has become the place to publicly vent about what went wrong at a restaurant. And these comments, if left unaddressed can cause tremendous damage to the brand. The response rates and average time to respond in the casual sector vary dramatically. Some restaurant companies have adopted a best-in-class approach by using a call center with live agents to reach out directly to consumers who have maligned them on social media. These companies are responding within 30 minutes or less and turning that customer into a brand advocate. The industry average is 7 hours and many on the other end of the spectrum take days to respond, if they respond at all. This is costly in terms of corporate reputation, likelihood for that consumer to return and the collateral damage done when others read that post.

The casual dining restaurant sector is one that is experiencing many changes today—much the same as other retailers and grocers. Changing media and dining habits, the advent of easy ordering and delivery has made the on-site customer experience something that is really no longer a “needed to win.” It is a “needed to play.” For me, restaurants that deliver an exceptional experience rather than just looking at my patronage as a transaction affect my restaurant choices. I avoid the ones with mediocre food, selection, and employees, and I will always remember and return to those who gave me something positive to remember.

If you want to learn more about how best-in-class companies compared in our benchmark study or to learn how top-performing restaurant companies are harnessing social media in real time, please schedule a briefing with us and we will walk you through our offering for managing your calls, web comments, and social media to create an exceptional brand experience.

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Charles Cornwell is a customer experience and loyalty consultant for Market Force. Over the past 20 years he has assisted more than 200 service-related companies with their efforts to improve customer experience and loyalty. Charles' experience includes sales and consulting to Fortune 500 clients in multiple, diverse industries. His education and training includes advanced graduate degrees in Statistics and Market Research Methodology and work experience includes management of every aspect of complex research projects.