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DRIVING BRAND LOYALTY FOR RESTAURANTS THROUGH VALUE-FOCUSED OFFERINGS

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DRIVING BRAND LOYALTY FOR RESTAURANTS THROUGH VALUE-FOCUSED OFFERINGS

Restaurant

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Consumers are cutting back on spending and “value” has become the name of the
game—especially for the restaurant industry, which is taking one of the biggest
hits.

A recent SMG study showed nearly 70% of UK respondents (a 12-ppt increase since
April) and close to 60% of US respondents plan to dine out less over the next 12
months. And when consumers do go out to eat, they’re choosing restaurants that
provide a valuable experience.

But what does “value” really mean? Is it low cost? The best deal? Highest
quality? To drive brand loyalty for restaurants during these volatile times,
understanding what value means to customers and executing on those expectations
is essential. Because when you execute on value, you are rewarded—customers who
are highly satisfied with value return 3-4 days faster.

In this blog, we’ve laid out 3 steps restaurant brands should take to ensure
they’re delivering the value-forward experience customers are demanding.

4 trends that will impact the restaurant customer experience in 2023

Get report




STEP 1: DEFINE WHAT VALUE REALLY MEANS TO YOUR CUSTOMERS

It’s easy to assume value is just a synonym for low price—which wouldn’t be
great news for an industry experiencing a significant rise in food costs. But
value doesn’t begin and end with a dollar amount—it’s an all-encompassing
experience that determines what something is worth. This is the best way to
drive brand loyalty for restaurants.



Some factors of value can vary from brand to brand (what’s valuable to a QSR
customer may be different from someone visiting a fine-dining restaurant).
That’s why it’s important for your brand to understand what value means to your
customers.

But there are some elements that will consistently contribute to customers’
value perception. The first one is quality. Our research shows around 65% of
consumers will choose a restaurant based on the quality of food served. Which
means cost isn’t the most important thing, so long as you’re providing a quality
product.



Next on consumers’ list is deals + promotions, location/convenience, and a
previous positive experience. So again, only one of those factors is really
about price. And though location isn’t really something you can control, the
rest of these measures can be accomplished with the right strategy and
execution—and help drive brand loyalty for your restaurant.




STEP 2: KEEP YOUR BRAND’S VALUE STRATEGY ON-TRACK

Customer expectations are constantly evolving and can change
overnight—especially during times of economic struggles. That’s why it’s so
important for brands to have a holistic experience management (XM) strategy in
place. If you’re not continuously hearing from your customers, you’re operating
in the dark—and that’s not something you can afford to do with consumers
tightening up their wallets.

This starts with the right customer experience (CX) program—one that captures
and analyzes consumer feedback and behavioral data across all channels—from
social media, to apps, to your website, to in-person—to understand customer
motivations and help you meet their expectations.

But in this competitive market, restaurants also need to know where they stand
as a brand. With traditional brand trackers, branded competitive benchmarks, and
behavioral data and insights from millions of consumers, you can answer critical
business questions and gain deeper perspective on your customer, your brand,
and the market.

With access to these tools, you’ll be able to answer critical business questions
like:

 * Why do consumers choose my brand? What about my competitors?
 * What are my consumer profiles vs. my competitors’?
 * What’s my biggest strength?
 * When do our competitors’ consumers choose to visit us?
 * Where do consumers go when they don’t visit? Why?
 * How can I convert non-customers and infrequent guests to loyalists?

Being armed with these answers will help you evolve your CX strategy so you are
always current with consumer trends and behaviors. This will also give you a leg
up on competitors that aren’t putting as much effort into understanding what
customers want. And with a smaller visit share up for grabs, this could be the
fine line between being a beloved brand vs. an irrelevant one.




STEP 3: EXECUTE VALUE-FORWARD INITIATIVES THAT DRIVE CUSTOMER LOYALTY

So now you know what value means to your customers and you have a system in
place to collect their real-time feedback. The next step is to put this
information into action. Here are a few examples of targeted ways restaurant
brands can differentiate themselves from competitors and win customer loyalty.


THINK OUTSIDE THE BOX TO ACCOMMODATE NEW CUSTOMER EXPECTATIONS

It’s not that consumers aren’t spending money—they’re just spending less of it.
And if restaurants continue to operate in the way they always have, they run the
risk of losing business. It’s up to brands to come up with creative ways to
pivot and meet customers’ evolved demands.

Lower priced restaurants have an opportunity to wow customers who may be trading
down from more expensive alternatives. Brands that can deliver higher than
expected quality and a great customer experience are more likely to convert
those trading down to more frequent users of their brand even after the economy
improves.

Higher-end restaurants also have an opportunity to drive traffic. This can
include offering lower cost menu items and offering specially bundled or paired
items at a lower price to help retain those tempted to trade down. Offering
lower priced items has allowed some brands to keep regular menu items and prices
intact for customers with less financial concerns.

It’s also important to pay special attention to promotion-based customers and
work to create an excellent experience for those customers who visit due to a
value offering. Performed successfully, you can convert a promotion-driven
customer into an experience-based customer and create a customer for life.

There will always be a market of consumers seeking satisfying experiences that
make their lives more fulfilling. Delivering on these experiences is one way to
ensure your brand survives the challenges ahead.


OFFER REWARDS YOUR CUSTOMERS CARE ABOUT

There are several ways you can reward customers for their business and promote
return visits. Here we are going to focus on two: loyalty programs and feedback
incentives.

LOYALTY PROGRAMS

Loyalty programs have long been a go-to tactic brands use to keep customers
coming back. Whether it’s a simple punch card or a point system tracked in a
branded app, giving customers a little something extra for choosing you is a
great way to entice them to choose you again.

Loyalty memberships can also foster a sense of “exclusiveness” by giving members
an inside track on things like special promotions, LTOs, new menu items, etc.
It’s also a way to increase sales (even if they’re coming in to redeem a free
item, there’s always an opportunity for upselling.)

Promoting its loyalty program paid off for Krispy Kreme Japan. When the brand
launched an initiative to ramp up membership, it not only increased its loyalty
program by 4X, it improved customer satisfaction on key service standards, drove
a 5-ppt increase in Intent to Return, and saw a YOY sales increase.

FEEDBACK INCENTIVES

Using incentives to solicit customer feedback does two things: 1) It ensures
your experience management program provides an accurate read on your brand’s
day-to-day customer experience by garnering a representative sample; and 2) It
provides customers with a reason to come back.

Some common incentives include free item with purchase, BOGO, and $ off (either
with a minimum purchase or without parameters).

Here’s where our clients have seen success regarding their incentive offering:

 * By testing a variety of incentives across regions, an SMG client determined a
   higher-value free item with a minimum purchase led to stronger sales than a
   lower-value free item given away without a purchase.
 * A QSR brand discovered when customers do return to redeem their incentive,
   they purchase 3 additional items on average—offsetting the cost for operators
   by boosting average ticket size.

Again, the trick is finding what works best for your brand. Work with your CX
vendor to execute incentive best practices and determine what lands best with
your customers.


BE SMART ABOUT TECH INVESTMENTS

Not too long ago, most restaurant brands didn’t put a lot of effort into their
omnichannel strategy. Digital ordering was dominating the retail world, but
omnichannel restaurant ordering simply wasn’t in much demand—until the pandemic
accelerated the need for off-premise ordering and forced restaurants to rethink
their digital offerings.

Today, mobile apps have come a long way and are a huge presence in
the restaurant industry, with 3 in 4 customers reporting using app ordering to
place their digital orders.

But as a KPI, total number of downloads pales in comparison to
actual usage metrics. Of the 83% of consumers who have at least one QSR app
installed on their phones, more than one in three had not used a restaurant app
to place an order in the past 30 days.

To evolve past being a novel touchpoint, QSR apps must provide a convenient,
seamless, and satisfying customer experience. But too often, brands are falling
short. Today’s consumers keep running into app-related issues (e.g., limited or
no customization offerings, limited menu options, glitchy tech), creating a
barrier to convert downloaders into repeat users.

Brands that are able to iron out these issues and provide a more seamless
digital experience will have the advantage. Our research shows mobile apps can
actually be great for business and bring in incremental visits—in fact, when a
customer doesn’t experience a problem from a mobile app, 25% are more likely to
visit the restaurant more often.

As more brands make headlines with app-exclusive menu items and promotional
campaigns, a longer term strategy focused on user experience and customer
engagement metrics must be in place to ensure your digital ordering channels
deliver ROI.




STAY ON TOP OF CONSUMER TRENDS TO STRENGTHEN THE CUSTOMER EXPERIENCE

Solidifying customer loyalty is not an easy feat right now. With a more
discerning eye on value, consumers are being more selective about how they spend
their discretionary funds—and unfortunately, that’s having a big impact on the
restaurant industry.

While this presents a bigger challenge for restaurant brands, it’s not an
impossibility. Consumers are still spending money. They’re still going out to
eat. Maybe less frequently and maybe with a smaller budget, but it’s happening.
Brands able to pivot and provide customers with the little extra value they are
seeking will be the ones to snag up a bigger piece of the visit share pie. We
will continue to navigate this ebb and flow of consumer spend and keep brands
aware of noteworthy changes in trends. Our most recent report, 4 trends that
will impact the restaurant customer experience in 2023, is a great resource for
restaurants as they iron out their CX strategy for the upcoming year. Be sure to
download your complimentary copy.

FEATURED RESOURCE

EXECUTIVE BRIEF

HOW THE GLOBAL ECONOMY IS IMPACTING CONSUMER SPEND IN SPA + WELLNESS

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Despite our very best efforts to allow anybody to adjust the website to their
needs, there may still be pages or sections that are not fully accessible, are
in the process of becoming accessible, or are lacking an adequate technological
solution to make them accessible. Still, we are continually improving our
accessibility, adding, updating, improving its options and features, and
developing and adopting new technologies. All this is meant to reach the optimal
level of accessibility following technological advancements. If you wish to
contact the website’s owner, please use the website's form

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