Most operators blame inflation, or something else, on customer counts being down and surely inflation has had a bearing on the problem. Consumers are still frequenting restaurants, and their hard-earned dollars are going to restaurants that are fulfilling and surpassing their constantly changing needs. Operators must have consistent messages and be constantly communicating with their customers and potential customers. It is not about what operators think, but what they know. Knowledge is power, and it drives more customers in because good decisions are being made that can positively impact the consumer.
Five reasons customer counts are down:
- 1. Not telling the true story/inadequate communication
- 2. Inconsistent execution
- 3. Excessive menu pricing
- 4. Changes in portion size, quality, and standards
- 5. Not providing the right value
1. Not telling the true story/inadequate communication
Consumers and operator teams will react differently if there is greater transparency. Everyone knows that there is a difficult economy, staffing is not easy, and many obstacles exist, but that does not warrant lack of proper communication. It all starts with leadership creating the right culture. Operators must focus on learning from the customers, team members, strategic partners, and other operators. Those that are close-minded and think they have it all figured out will run into many walls that could easily be broken down. Tell a great story and continue to adjust the story, but make sure it is accurate. Marketing a fantasy will be short-lived.
2. Inconsistent execution
The customer is more discerning than ever before. They have a certain amount of money to spend and are looking for restaurants that can meet or exceed their expectations. It does not matter what the level of standard is for a particular restaurant as long as the consumer understands what it is they are paying for and that they are receiving their orders the same way each and every time. A standard, quick service burger and a high-end steak house Kobe burger are quite different and the expectations that go along with each are also different. The key item that both have in common is consistency. If the Kobe burger is great one of three times and the standard burger is consistent every time, the consumer will likely adjust their preference. In today’s marketplace, forgiveness when it comes to a disappointing restaurant experience is becoming nonexistent. Operators must do whatever it takes to be consistent and that may mean simplifying their menu and their overall operation.
3. Excessive Menu Pricing
Inflation caused menu pricing to go up. This was not just food, but labor and more. It was a must for prices to go up and the consumer fully understood the rationale behind it. Unfortunately, many operators failed to account for how savvy the consumer has become when it comes to price value. Consumers have a pretty good idea of what the market looks like for restaurant operators by understanding the shifts in cost that they endure when they go to the supermarket. Commodities such as chicken and eggs have declined, but does the consumer see that shift in the prices they are paying at restaurants? Fast casual and quick service restaurants have been more reluctant to adjust pricing down and it is affecting customer count while casual dining has been more flexible. It has affected the consumer’s mindset on where they should go and how often. Operators must take a look at themselves as consumers and evaluate their pricing. It may be time to lower some pricing or remove items that simply are not profitable at a price the consumer is willing to spend.
4. Changes in Portion Size, Quality, and Standards
Whatever it is that a restaurant brand has committed to regarding their level of quality, brand standards and portion size must remain consistent. It is a clear misconception that tinkering with any of these three in order to keep prices lower will keep customers coming back. Most of your customers will recognize that you have gone from an 8-ounce chicken breast to 6 ounces, or that you have taken 25 percent of your chocolate chips out of your cookie, or that you have removed the short rib in your burger blend. This is a recipe for inviting your customers to your competition. The winning formula is to maintain the specifications that made you successful. If these specifications are no longer profitable, be innovative and develop some additional products that are profitable and consider offering multiple portions. If the customer wants the standard size, it will be a bit more expensive than before, but a smaller size could be less than they used to pay.
5. Not Providing the Right Value
Today’s consumer looks at value as one of the top reasons they go to a restaurant. Price is the driving force behind value, but each consumer may look at price differently. They are willing to pay a certain price if their expectations are met. We hear a lot about consumers trading down because of price. This may seem to be strictly about menu pricing, but it is also about not providing the consumer with the elements of value that they require. It is rare for a customer to have a great experience with all of their expectations met and have them say that their meal was overpriced. It is a disappointing experience that leads to a mindset of the meal being overpriced. A $100 steak with all of the “must have” boxes checked can be good value. The winning formula for providing good value is to understand the consumer expectations and how you differentiate yourself from others. It is then up to you to execute.
Keys to improving customer counts:
If you want to improve customer counts, it is essential to look at your operation as a whole and develop initiatives to get traffic back. It takes a team approach—from the company leadership to each team member.
Bruce Reinstein and Tim Hand are partners with Kinetic12 Consulting, a Chicago-based Foodservice and general management consulting firm. The firm works with leading Foodservice operators, suppliers, and organizations on customized strategic initiatives as well as guiding multiple collaborative forums and best practice projects. They also engage as keynote speakers at operator franchise conferences and supplier sales meetings. Their previous leadership roles in restaurant chain operations and at Foodservice manufacturers provide a balanced industry perspective. Kinetic12.com Bruce@Kinetic12.com or Tim@Kinetic12.com