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DIY consumer research

Getting a bead on your customer base is no small task. Neighborhoods gentrify. Dining tastes evolve. Lifestyles can move the pendulum-like whims of diners from a hamburger and fries to a pineapple chicken pizza in a blurry moment. How's a restaurateur to cope? With data—lots of data. And guess what. You can gather the data you need on your own. No big research house—or big budget—required. We've assembled the expertise of consumer researchers and restaurant owners alike to get you rolling on your own do-it-yourself consumer research. 

Getting a bead on your customer base is no small task. Neighborhoods gentrify. Dining tastes evolve. Lifestyles can move the pendulum-like whims of diners from a hamburger and fries to a pineapple chicken pizza in a blurry moment.

How's a restaurateur to cope? With data—lots of data.

And guess what. You can gather the data you need on your own. No big research house—or big budget—required. We've assembled the expertise of consumer researchers and restaurant owners alike to get you rolling on your own do-it-yourself consumer research. But better get started quick, your customer base is changing right now.

FOCUS GROUPS
Last month John Powers opened his overhauled restaurant, a $4.5 million effort based on 20 months of research through multiple focus groups. Powers learned what kind of food the area's clientele was interested in and how much they were willing to pay for it.

During one focus group, Powers brought different types of meat, including high-end steaks. He asked people if they would be willing to pay $10 extra for a steak entree if it meant getting a higher quality cut of beef. "They all answered yes."

The groups also taught Powers about the community's needs, mainly that people wanted fine dining options. Powers soon realized that these groups were telling him there was an untapped market waiting. Focus groups are powerful things—if done right.

Have eight to 10 participants. Any more and the group may get sidetracked or run out of time. Any less and the momentum that's built through group discussion may be lost. Focus groups should last for at least one hour but no more than two.

Have a restaurant manager observing where participants can't see him. With restaurant staff in the room participants might skew their answers to please the staff member. With the manager observing the moderator can verify all topics are being covered. If the facility doesn't have a two-way mirror, halfway through the session the moderator should report initial reactions to the manager.

For the moderator's sake, write out how much time should be spent on each topic. It's best to record the focus group with an audio if not a video recorder.

Try to find a site that's easily accessible, comfortable and that doesn't have distractions, such as large windows with passing foot traffic outside.

Determine what type of information you want to find out. For Powers, that meant testing food items and wines, and asking opinions about the style of his restaurant.

Decide the best customers to include. Powers was interested in what regulars thought. Fast casual chains, where clients are likely to visit their restaurant and competitors regularly, might choose clients who can compare the two.

Once you have secured participants, send a reminder two days before the event, with location, time and with another mention of the incentive, whether it's a free meal, small stipend ($50 is standard) or some other item. Participants should be told of the event at least twice.

Focus group moderators should always be a neutral party, not affiliated with the restaurant. Pros cost anywhere from $1,000 to $5,000. Can't afford one? A friend who's a well-organized, effective public speaker will probably do the trick.

Moderators should be supportive but constructive. Don't cut answers short—that will discourage opinions. But don't let tangential discussions meander. If three people express the exact same opinion, state that you've recorded their comments and now you'd like to move on.

Most experts agree that it's best to conduct the meeting off site. That keeps opinions and discussion more neutral. Just make sure if food will be sampled, that the restaurant is close by.

Try to form focused, easily understood questions that elicit thoughtful answers such as, "If there was one item on our menu you would add, what would it be?" Or, "Is there one particular experience as a diner at our restaurant that stands out—either positively or negatively."

SURVEYS
Want fast and inexpensive feedback? a survey—in person or online—may be the best way to get it. Two years ago, Ryan Osborne wanted to make changes to his restaurant. But not without consulting his customer base first. Tired of "throwing money away on advertising in the wrong areas," Osborne, director of marketing for Shake's Frozen Custard, in Fayetteville, Arkansas, decided he needed to know his audience more intimately to better spend the $12,000 slated for advertising each year. With the restaurant's oldies theme, the company assumed oldies stations and local newspapers were the advertising vehicles of choice.

But what he found, after randomly asking 700 customers to fill out and complete a 10-question survey, and receiving 203 back, was shocking. The majority of diners weren't over 40, as Osborne had thought. In fact, most were under 40 and heavily female. The results spurred Osborne to change the colors and focus of his logo to reflect a younger audience as well as to change portion sizes, like a reduction in the 12-ounce Concrete, a milk shake, to one that's only nine ounces. For Osborne, a simple question-and-answer card revealed much about the tastes of his clients. To conduct surveys restaurant owners should consider the following.

Ideally, you should query 5 to 10 percent of your customer base, says Keith Bailey, president of Sterling Consulting Group, a customer service firm in Sausalito, California, and co-author of "Customer Service for Dummies." The best way to tap that 10 percent is to offer them an incentive—a free meal, a rebate on a food item or a gift thanking them for their participation.

Avoid restaurant jargon, acronyms or any other terms and phrases that may not be familiar to survey participants.

Before sending out the questionnaire, pre-test a small sample with a dozen or fewer customers to make sure there isn't any confusion about how the questions are worded.

Depending on the questions asked, yes/no answers may be more appropriate than open-ended responses. Use yes/no questions for basic information, such as demographics or eating frequency. Use open ended, or scalable questions for those that require more thought, or for those in which you want a more nuanced answer.

When asking respondents to provide answers on a scaled system, make sure to use an even listing of numbers. Experts suggest 1 to 6, for example, rather than 1 to 5. An even number of choices means those whose opinions are wavering have to weigh in on one side or the other. If you use 1 through 5, those who aren't sure of what they think will always circle 3, which doesn't tell you anything, since three is exactly in the middle of the scale.

Think paper surveys are old school? They're still a highly effective research tool. But for those who want to tap their customers in a different format, online survey services, such as SurveyMonkey, offer the newest—and some say fastest—way to reach customers, cheaply. On SurveyMonkey, for example, services start at $19.95 a month for surveys that bring in 1,000 responses or less. The same structure and response guidelines apply online as they do in person. Email surveys provide some advantages, however, in that they can require certain questions be answered, for example, or offer downloadable results for more specific analysis.

Make sure customers aren't surveyed more than twice a year—either online, in person, over the phone or through the mail. Any more frequently than that and they'll feel bombarded with tasks that could leave them with a negative impression and drive them away from your establishment.

Keep survey questions at a maximum of 12. More than that and customers will lose interest and won't take the time to answer.

Handing a survey out in person may be a faster way to get responses. Most patrons just won't mail back a response, even in a postage-paid envelope. For a greater number of responses, keep surveys short and ask customers to complete it when you bring the check. Make sure you state that their participation isn't mandatory, but that you're conducting a survey to help make their dining experience the best it can be.

Let participants know upfront how long the survey will take (5 to 10 minutes, for example), so their expectations are clear from the start.

ADVISORY PANELS
When farmer's diner in quechee, Vermont, wants to find out about its food, service or prices, it knows just where to turn: to farmers, who are the restaurant's suppliers and customers. But the diner—an advocate of rural farming—doesn't just pick their brains when farmers drop by for a meal. They proactively court them through advisory meetings, set up as potluck dinners at a manager's home. They are held every six weeks with 30 participants. That's when the quality of meals, staff services, products and other issues are addressed, along with suggestions for change straight from the customers' mouths.

"We learned that sometimes the half and half, for example, separates into fat globules, and that's feedback we're getting," says Tod Murphy, CEO of the diner with two locations in Vermont. Potluck dinner guests are "friends as well as business partners," Murphy says. That, and the fact that meetings take place in the casual environment of a participant's home amid an atmosphere of open communication, means the company gets honest feedback.

Start with those who eat out most often. Approach customers who visit your restaurant at least three or four times a month, if not more. It's ideal to find patrons who know your establishment well, but are also likely to visit other restaurants, to give you a sense of how you compare to the competition.

Make sure participants reflect a cross section of your clientele. They should cover various age groups, professions, household sizes and ethnicities. "You want young families, seniors, single folks and others to spread out your demographics," says John Bloomstrom at branding and communications company Northlich in Cincinnati.

Once you've selected a panel of customers—between 8 and 10 people is ideal—send them a letter on letterhead thanking them for agreeing to participate. That makes the invitation official and says that you expect them to take their role seriously.

In the letter, spell out, in bulleted points, exactly what you expect of them, including how often they will need to be at the restaurant or how much time they can expect to dedicate to the research. For example, if you want them to complete two surveys and one face-to-face, state that clearly within the letter, as well as how long each survey and meeting will take.

With panel members, you may have to set up meeting times that are convenient to them, which may mean the rush of dinner, and your absence from the restaurant.

Like focus groups, it's smart to conduct these meetings away from your restaurant, so panel members don't feel pressured to give biased answers in your favor simply because they're sitting in your restaurant eating your free food.

Ask questions that spark an open dialogue and invite conversation, rather than yes/no questions. Because it's one-on-one, there's less need to be as specific with questions as in a focus group. But keep the questions somewhat focused in topic. The point here is to start broad and drill deep, since you have one person's attention for a half hour.

To keep the feedback fresh, rotate new panel members into the group regularly, keeping their participation limited to three to six months. Anything longer than that may feel like too much of a commitment.

For face-to-face meetings, make sure you record the event, so you have a method for reviewing comments at a later date.

Offer them an incentive to participate, such as a free monthly meal or discounts on their meals as long as they're a panel member.

Be very clear about how much time and effort their participation will require. Don't try to entice them onto the panel by saying you'll just want a few words from them now and again. If they're going to be required to sit down with you one-on-one and discuss the restaurant for 30 minutes once every three months, make that clear from the outset. That way they can opt out now if it's too much time and it will save you from an awkward conversation later on if you have to kick them off the panel.

DEMOGRAPHICS
When craig bothwell, owner and president of Bothwell Saxton Restaurants, a franchisee of McAlister's Delis in Tulsa, Oklahoma, needs to find out demographics on the cheap, he simply asks his real estate agent. "They're the best source for free demographic information," he says, since agents subscribe to very specific demographic data sources.

And for those trying to determine demographics to open a restaurant, Bothwell has an inexpensive strategy for that too. Go to a restaurant in the area you want to expand your operation to and see who comes in. "Sit there from 11:30 to 1:30, and if there's a line out the door and the customers are the same kind of customers that you're marketing to, you just figured out that that's a good location."

Sounds simple, but it works, he says, which explains the clusters of fast-food restaurants in many cities.

And there are still other ways to gather local demographic information on your own and on the cheap.

For starters, visit your local chamber of commerce (join if you're not already a member) as well as your Better Business Bureau for area demographics that provide everything from population to income data. Either one should have detailed business statistics on things such as dollars spent on white-tablecloth restaurants versus business casual restaurants.

Don't want to get chummy with your local bureau? You can find the same information online—thanks to the U.S. government. "The U.S. Census Bureau is so rich with data, you don't need to go anywhere else," says Elyse Gammer, operations officer for the Marketing Research Association, in Glastonbury, Connecticut. The Census Bureau provides gender, age, education, ethnicity, real estate values and scores of other information for various cities and areas on its Website.

One of the best pages on the bureau's Website is the State & County Quick Facts page (quickfacts.census.gov/qfd/index.html) that lists useful information, such as an area's mean driving time to work.

In addition, government sites, such as Quick Facts (www.fedstats.gov) offer a breakdown of business demographics by state.

If nothing else, approach your company like you would your home. For new restaurant owners or even those who haven't examined their region in great detail recently, John Bloomstrom, with branding and communications company Northlich in Cincinnati, suggests a combination of intuition and analytics. First cruise the neighborhood to get a sense of the types of businesses that are succeeding and failing nearby—that's a clear sign of what the population shopping there is like.

Ask your chamber of commerce contacts which types of businesses have folded and which have succeeded in the past year. Were they independent or chains? What types of households live nearby?

Finally, check out the County Business Patterns on the U.S. Census Webpage (www.census.gov/epcd/cbp/view/cbpview.html) for business patterns by zip code.

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