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Effectively Serving Multiple Customer Types
Uncovering preference patterns boosts satisfaction.
For the rest of the November 2004 issue of CRM magazine please click here
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Most restaurants understand that the essence of their success depends on their ability to consistently meet or surpass their customers' expectations, build loyalty, and sprout sales growth. But what McAlister's Deli, a restaurant chain with stores primarily in the southeastern United States, didn't realize was that it had two very different kinds of customers. "We started to get involved with customer research and I learned about customer loyalty, great satisfaction, and the concept of tracking your best customers in terms of their experience in the restaurant," says Phil Friedman, CEO of McAlister's Deli. "And I learned about the value of building the brand loyalty with your best customers." Looking for a solution that could serve customer satisfaction indexing and customer loyalty in terms of sales and profit growth, McAlister's selected Service Management Group (SMG) to measure its customer satisfaction. SMG conducts approximately 50 surveys per month for McAlister's, averaging about 600 surveys a year for each McAlister's restaurant via an automated voice response system. "Service happens one customer and one restaurant at a time, so that's why we have to measure every restaurant," says Andy Fromm, president of SMG. A phone number is printed on receipts, which instructs customers to call and take a survey. As an incentive customers can earn savings off their next meal at McAlister's. "They call the 800 number, they take a five-minute survey, and they get a validation code for their receipt that they write on it, and that makes it a valid coupon that they can redeem," Fromm says. SMG prepared the survey results monthly (and continues to do so). This gave McAlister's a clear view of its customer segmentation. "We started seeing a real difference in how people responded to questions if they were take out or eat in customers," Friedman says. It allowed him to see what attributes appeal more to which subgroup. With the use of SMG's reports and the accessibility of real data, McAlister's can also identify problem areas for its restaurants, and in turn construct strategies to alleviate the issues. Friedman cites a franchisee whose restaurant was experiencing challenges. "We were able to isolate that his handling of the telephone for take out customers was very poor," he says. "He was getting low marks on that. This is a great example of being able to have a dialogue with our franchisee or operator with real data versus just general discussion, because we had the most recent results and could see where he was falling down."
Satisfied customers will usually return, but the recipe is to move somewhat pleased customers to a level of extreme satisfaction. Using survey results and financial analysis from 17 franchise groups, SMG determined that the highest performing franchise groups experienced a 3.5 percent increase in same store sales growth for a specific time period compared to the previous year. Middle performers achieved a mere .63 percent growth in sales, and the lowest groups actually lost sales. McAlister's also uses SMG to identify initiatives for the staff. "If table service is something they want to work on they can look at their scores and start using them to see how they're improving since they put an emphasis on it," Friedman says. "It's using statistics, using customer information to improve the restaurant, and making it specific to the experience in the restaurant." The Payoff As a result of using CRM, McAlister's Deli
  • has a better understanding of its customers;
  • uses customer feedback data to drive specific areas of improvement;
  • is building brand loyalty and generating incremental sales.
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