J.D. Power and Associates Reports:
Fostering Customer Commitment Can Lead to a Fourfold Increase in Customer Loyalty and a Significant Improvement in Profitability for Restaurants
In the Vancouver Market, The Keg Steakhouse & Bar and Panago Pizza Rank Highest in Customer Satisfaction in Their Respective Segments
TORONTO: 23 November 2010 — Elevating customer commitment from medium to high levels may result in a fourfold increase in returning diners, twice as many customer recommendations and substantially higher annual revenue potential for restaurants, according to the J.D. Power and Associates 2010 Canadian Restaurant Satisfaction StudySM released today.
The study includes satisfaction rankings for restaurant chains in two Canadian markets—Toronto and Vancouver—in two segments: family/casual and quick service. In each segment, four factors drive overall customer satisfaction with restaurants (listed in order of importance): price; service (including timeliness of order and wait staff courtesy and friendliness); meal (including quality/taste of food, meal presentation and portion size); and environment (including ambiance, cleanliness and convenience of location/hours).
“There are several key service standards that, if consistently delivered, have a significant positive impact on customer ongoing loyalty and commitment to their chosen restaurant brand,” said Adrian Chung, senior manager at J.D. Power and Associates. “Examples of such standards include delivering orders accurately, ensuring servers are able to adequately answer customer questions and providing food at the proper temperature. While these practices may seem simple, restaurants have ample opportunity for improvement. Among family and casual restaurants, 62 percent consistently perform all identified key service practices per customer visit, compared with only 22 percent among quick serve restaurants.”
Overall satisfaction with family/casual restaurants in the Vancouver market averages 710 on a 1,000-point scale. Among quick service restaurants, satisfaction averages 658.
Family/Casual Restaurant Segment Rankings
Family/casual restaurants are defined as establishments offering wait service and menu items that are moderately priced and are paid for after the meal. Most restaurants in this segment serve lunch and dinner, while some also offer breakfast. They may also serve alcoholic beverages.
The Keg Steakhouse & Bar ranks highest among family/casual restaurants in the Vancouver market with a score of 743 and performs particularly well in the environment factor. Following in the segment rankings are abc Country Restaurant (741), which performs particularly well in the price category, and Earl’s Restaurant and Bar (730).
The Keg Steakhouse & Bar also ranks highest in satisfaction among family/casual restaurants in the Toronto market.
The study finds that nearly 30 percent of customers of family/casual restaurants indicate their server did not provide explanations of menu items and specials.
“When servers fail to explain specials or adequately answer inquiries about menu items, not only is this a missed opportunity to interact with customers, but it may also be perceived as a lack of concern, which diminishes the chance of exceeding customer expectations and achieving incremental profitability for the establishment,” said Chung.
Quick Service Restaurant Segment
Quick service restaurants are defined as establishments offering inexpensively priced food that is ordered at a register or selected from a food bar. Meals are paid for before being served to the customer.
Panago Pizza ranks highest among quick service restaurants in the Vancouver market and achieves a score of 690. Panago Pizza performs particularly well in three of the four factors: environment, meal and service. Following in the rankings are Domino’s Pizza (685) and Tim Hortons (683). Domino’s Pizza performs particularly well in the price factor.
The study finds that approximately one-fourth of customers of quick service restaurants indicate they were not initially greeted with a smile by restaurant staff.
“Aside from price, the courtesy and friendliness of restaurant staff is the second-most-important area driving overall satisfaction with quick service restaurants,” said Chung. “Properly training staff to warmly and sincerely welcome customers may provide a boost to both satisfaction and customer loyalty.”
Other Industry Findings
The study also finds that:
- Approximately one-third of restaurant customers indicate they are visiting quick-service restaurants less often than last year, in attempts to eat healthier food.
- Among quick service restaurant customers, satisfaction declines significantly when the perceived wait to receive their order exceeds four minutes. Approximately 45 percent of customers at quick service restaurants indicate they waited four minutes or longer for their food.
The 2010 Canadian Restaurant Satisfaction Study is based on responses from 13,671 customers of more than 60 major restaurant chains who dined at a restaurant between May and September 2010. There were 5,157 respondents in the Vancouver market. The study was fielded between June and October 2010. For rankings for the Toronto market, click here for family/casual restaurants and for quick service restaurants.
About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, Web intelligence and customer satisfaction. The company’s quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.
About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a global information and education company providing knowledge, insights and analysis in the financial, education and business information sectors through leading brands including Standard & Poor’s, McGraw-Hill Education, Platts, and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2009 were $5.95 billion. Additional information is available at http://www.mcgraw-hill.com/.