Commentary: Customer intelligence drives loyalty

May 18, 2012
Commentary: Customer intelligence drives loyalty

By Ashish Gambhir

Chances are your restaurant incorporates a rewards program into your customer loyalty initiatives. With the average person having 14 loyalty cards, it seems to reason that rewards are an effective way to retain customers.

Unfortunately, customers are telling us the opposite. A recent survey by PriceWaterhouse Coopers found that only 1 percent of those surveyed ranked rewards programs alone as the top influencer of purchase.

While a rewards program should be integrated into any customer retention strategy, it is the brand experience that is shown to be the most critical driver of customer loyalty. As Walt Disney once said, "Do what you do so well they want to come back and bring their friends."

When companies deliver a distinctive experience, their customers will come back, increase their spending, and more than ever before – through social media – recommend the experience to others. In a recent poll, Loyalty 360, The Loyalty Marketer's Association, found 78 percent of customers believe having a great customer experience creates long-standing, loyal relationships. The Customer Experience Impact Report concurs, revealing a better customer experience is so important to consumers that a full 86 percent are even willing to pay more for it!

So, how do you create the brand-defining experience that will engage your customers and earn their loyalty? The answer to this question is found in online conversations about your brand.

There is little doubt the flood of online commentary may seem ominous. But, marketers need to realize that when it comes to understanding how to deliver a brand-defining customer experience, online conversations are the most robust source of insight. It is the next generation of a focus group. The unstructured, unsolicited real-time feedback gives brands the most comprehensive understanding of the customer experience they are delivering. The negative themes point out areas in need of improvement; positive comments highlight core competencies.

Since people share this information willingly, their feedback typically goes beyond a simple "like" or "star rating" and offers deeper insight into the aspects of their experience that are most important to them and to their overall satisfaction with a brand. By understanding the commentary, marketers get a closer look at the experience drivers that are impactful.

For instance, take a look at these excerpts from online commentary about restaurants:

"The amazing part of this dinner was the price. The food is reasonably priced considering they are a member of Braise, USA I thought it would be more expensive...which would not have mattered because it is worth it. We are still talking about how good that pizza was."

"And the happy hour can't be beat. Goes through 7pm on the weekdays, for those of us like myself who work til about 5 or 6 the extended hours are a big bonus!"

"The service was nearly the best I've ever experienced. Right as we were finishing a dish a new one was being placed at our table to enjoy."

"The restaurant is typically busy and the walls are concrete and glass block, less several curtains. The sound carries in the room and it is difficult to have a conversation across a table without yelling. Two people is a challenge and ten people requires extra-special effort to talk beyond the guest sitting directly next to you."

Going well beyond a simple star rating of the restaurant, these examples show the richness of information online customer feedback provides. Only in the details can marketers realize the true drivers of a customer's satisfaction.

While successful brands embrace the positive feedback, they also realize the value offered in the not-so-great reviews. Clearly, through negative feedback, specifics can be learned about to improve and attract more business and enhance reputation.

For example, despite consistently high scores from traditional feedback sources, a global restaurant chain suspected they were facing a decline in service. They partnered with newBrandAnalytics to assess this issue. By mining and analyzing the myriad posts about the brand online, we discovered that service was indeed declining for the trailing six months service, with frequent mentions of unreasonable wait times and inattentive staff. Digging deeper, we learned that a good portion of the service issues originated at the very beginning of the dining experience.

Armed with this insight, the chain implemented a new program to address and resolve many of the issues noted by customers about service: Staff were required to better introduce themselves to diners and management to stop by tables during the dining experience to personally greet the guests. The objective was to start the meal off right with a warm and genuine greeting.

In the quarter following the implementation of the greeting program, newBrandAnalytics studied loyalty feedback and uncovered that (1) customer's intent to return had doubled post the initiative and (2) waitstaff and management mentions emerged as two of the top five leading drivers in a customer's intent to return (neither were in the top five prior to the greeting program).

This example shows that converting the social media "feedback firehose" into a well organized, actionable database of information can help restaurants enhance the type of experience that engages customers and earns their long-term loyalty. Here are a few pointers to help you move successfully along the path toward customer intelligence:

  • Look past the star ratings.  Albeit measurable, an average star rating does not provide you with concrete insight. Go one step further and review the written comments for feedback upon which you can improve.
  • Look for themes.  Polarized feedback has a way of quickly spreading inside an organization.  When you come across a mention, take it in context with a few other reviews.
  • Use a mention online as a training opportunity. Just as you would share a customer’s in-person feedback with your staff, do the same with an online mention.  Identify what, if any, opportunities exist to better execute your brand’s standards.

Ashish Gambhir is co-founder of Washington, D.C.-based newBrandAnalytics, a provider of Social Business Intelligence solutions for the restaurant and hospitality industries. Its flagship offering, Social Guest SatisfactionTM, is used by thousands of restaurants and hotels. The company was recently named the Venture Summit Mid-Atlantic 100 Company of the Year.

Topics: Business Strategy and Profitability, Customer Service / Experience, Marketing / Branding / Promotion, Online / Mobile / Social, Operations Management, Staffing & Training, Trends / Statistics

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