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How to reduce operational costs in your restaurant

Voice of the customer programs can help operators streamline operations and better manage labor
Photograph: Shutterstock

When McDonald’s introduced an all-day breakfast menu in 2015—which ultimately led to a 5.7% jump in the chain’s fourth quarter same-store sales—it wasn’t based on a hunch that it would be a success. It was due to their deep efforts to listen to the customer and turn these insights into revenue-generating opportunities—something referred to as listening to the Voice of the Customer, or VoC.

With customer preferences continuously changing and competitors introducing new offerings, the only way to truly cater to your customer’s needs is by listening to them and implementing changes based on their feedback. However, a proper VoC program isn’t just a tool to help increase sales and return visits. It’s also a way to help reduce costs.

What is a VoC program?

Implementing a VoC program means listening to what customers have to say about an establishment and implementing changes to improve the overall experience. It’s tailoring each experience to match customer expectations to ensure a positive response. This can be done through in-store/mobile surveys or through direct conversations with customers.

Though VoC is becoming a more recognized approach to improving the customer experience, it’s still not being utilized effectively. Today, only 29% of firms with VoC in place systematically incorporate insights about customer needs into their decision-making processes. It’s a missed opportunity for improved satisfaction and identifying operational efficiency.

How VoC can reduce operational costs

Operational costs can easily run wild, but VoC can help. From hiring new employees and restocking inventory to delivering training and ensuring adequate staffing, if there’s a way your establishment can reduce operating costs while enhancing the guest experience in any sort of way, it’s a triumph.

First, implementing a VoC program helps save costs by identifying opportunities for streamlining operations. By leveraging a mobile/in-store survey with KPI-driven questions, operators gain insight into a business’s strengths and weaknesses, such as time to serve, quality of food, restaurant cleanliness or employee attitude. Given the responses, operators can effectively allocate financial resources, staff and time to areas of the business that are rated more poorly than others. This increases customer satisfaction in real-time and leads to a greater revenue stream in the long run.

Second, a VoC program can reduce costs related to employee turnover. The key to any successful business is retaining your best talent, and retaining your best talent means engaging them and ensuring they are happy at work. According to The National Restaurant Association, restaurants on average are losing somewhere around $150,000 per year due to employee turnover alone.

A proper VoC program will provide elements of gamification in the workplace that makes teams excited about providing excellent service. By doing something as simple as rewarding team members when they get a positive response, you “enhance positive patterns and increase quality or productivity of actions“. It’s a promising way to ensure team members have fun at work and stay engaged.

A VoC program can also help you be more strategic in how training is deployed. If a VoC program has the tools to identify the specific areas of the experience that are failing, operators can be more precise with training programs that are focused on what matters most to the guest experience, as opposed to costly and timely comprehensive review training covering all elements of operations. This equates to less time and money being spent on broader topic or skills training and shorter, as well as more precise, training on what has the greatest impact on the customer and their intent to return.

Finally, a VoC program will help operators retain current customers. Losing a customer is a huge drain on any restaurant budget because current and loyal customers drive the restaurant’s revenue stream, are easier and more cost-effective to market towards and require very little persuasion. Adopting a VoC program ensures that the preferences of these customers are always number one, strengthening the relationship between consumer and the brand. In fact, according to Gartner, companies that actively engage in a VoC program spend 25% less on customer retention than those that don’t, increasing customer retention rates by 5% and increasing profits from 25% to 95%.

Getting started with an effective VoC program

To successfully start designing a program, it is best to focus on the most basic requirements of any VoC strategy.

  • Measure multiple touch points: A strong VoC program should be able to measure the customer journey at any touch point. Whether it be at the point of purchase or well after a customer has left, operators should have visibility into every aspect.
  • Make it easy to use: A VoC program should be designed with customer convenience being top of mind. That means the questions customers are asked should be short, easy to answer and non-obtrusive.
  • Enable free-form comments: Free-form comments are a great way to fully understand the customer. By enabling them, operators can identify common trends while allowing the customer to fully express themselves. If relying on technology, make sure the vendor has analytical tools to help mine these comments to determine trends which help explain the “why,” above and beyond a simple rating.
  • Make it real-time: With technology evolving and social media becoming more ingrained in our lives, customers have come to expect real-time communication. Teams should be trained to answer any inquiries within the first three minutes of it being received. Again, if relying on technology, be sure they can alert managers in real time and have communication vehicles in place to respond and recover the customer quickly via text, email or social media.

 

Once operators have started to receive feedback data from multiple sources, they can then analyze and implement changes to help ensure a positive response from customers. This is the biggest area of failure for most restaurants—they collect the data, then do little with it. Brands such as A&W Canada and McDonald’s are prime examples of companies using a VoC program and immediately acting on the insights to make changes, which is helping them stay ahead of the competition, increase customer loyalty and find ways to reduce their overall operating costs.

This post is sponsored by Benbria

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