Returning from the Casual Dining Show, I couldn’t help but feel concern for an industry I’m relatively new to. Coming from a career spent analysing data in the consumer goods retail sector, I know only too well the challenges businesses in town centres and retail parks face and, even as I write this, more big names are in danger of joining a long list of retailers disappearing from our high streets such as Comet, Courts, Focus, Phones 4 U and Blockbuster – remember going to get videos most weekends? How times have changed!

Of course staff costs, business rates and leases are issues restaurant operators face as well and already this year we see tough times affecting Byron, Jamie’s Italian and Prezzo among others.

Coming from a retail sector that had never seen so many empty shops while leisure venues remained more robust (source Local Data Company), I find it interesting to see how the places we choose to spend our time in are changing. Rather than browsing in a stack of shops, it seems the retail parks of the early 2000s are being replaced with leisure parks, where there are still superstores but also more cinemas and places to eat. Of course having all these restaurants in a row means the consumer has a lot of choice when thinking about dining before or after their visit to the shops or cinema. However, with all that choice comes increased competition.

The worrying thing about all this bad news regarding shop and restaurant closures is, of course, it signals tough times ahead. Jobs are under threat and with consumer confidence at minus 10 for February, according to GfK, the competition for a share of consumers’ disposable income will become fiercer, not even allowing for Brexit!

For the Restaurant Marketer & Innovator (RMI) Bootcamp I was lucky enough to deliver a short presentation on some insights I’d found from my first couple of months working in the industry. The good news, against a backdrop of challenging times, is the data revealed some opportunities, the largest one being a chance to convert a “passive” guest into a “promoter”. For those unfamiliar with these terms, when asking a customer “how likely are you to recommend this venue to your friends, family or colleagues?” the customer’s score out of ten helps us categorise the “detractors” (scoring zero to six and likely to be unhappy with their experience), “passives” (scoring seven or eight and although having had a good experience are not going to shout about it) and “promoters” (this is where you want your customers to be, scoring nine or ten and the type of people to return more quickly, work their way through your menu and bring friends back next time).

When looking at data from our Feed It Back platform, in just six months (June to November 2017) we saw almost a third of the spend we track from EPOS-linked guest feedback from passives. It was a pleasant surprise to see this being a much bigger opportunity than the detractors, which was at 10%, showing there is a lot of great work being carried out by our clients regarding guest experience. The passive spend figure, when extrapolated up to cover our entire client base, is estimated at a huge £20m for this period and obviously the entire industry spend would be much higher.

When a guest fills out the short Feed It Back survey in the venue or when they get home, they rate the venue on food, drink, cleanliness, atmosphere, service and value. While, as expected, passives are scoring a little lower than promoters across all these areas, the interesting thing is the gap between a passive score and promoter score is much larger when looking at value. Passive customers seem a lot harder to please when it comes to value and therefore the challenge for operators is to make sure the customer feels they have had good value for money at a time when consumer confidence is low and wallets are being squeezed.

The value challenge

Looking at the feedback we get from guests across our client base, it seems the passives are certainly more price-sensitive, while the other important thing is they are very aware of the competition. A lot of the comments referenced how, even though these people were out for a treat, they didn’t feel the value of an extra option or they were aware of a better deal elsewhere. A big positive, however, was several customers leaving positive feedback mentioned good service and even referred to times when they had been upsold. The customer, and the passive customer more so, is well aware of when they are being upsold and they are fine with it as long as it’s done right and they feel they receive good value for money. This is surely an opportunity for operators to drive the best revenue performance in these challenging times.

Time is Money

We regularly see wait times being referenced in negative comments, and speed of service is consistently the number-one topic in our Guest Recovery system. A lot of positive feedback and staff mentions we capture also include words such as “quick” and “efficient” – reviews that reference how long it took to get seated or for a dish to arrive are common. This is something we also saw in a study of TripAdvisor reviews we carried out for RMI, a sample of data looking at 37 different restaurant groups’ reviews in 2017. Our sample included more than 148,000 reviews covering upwards of 1,400 venues in the UK.

In total, 7% of the reviews we analysed referenced a wait time in hours or minutes. When we looked only at the terrible reviews (one out of five rating), this 7% rose sharply to more than 25%. This TripAdvisor analysis backs up what we’ve seen in the Feed It Back system and it certainly seems clear that in our increasingly time-poor lifestyles, no-one wants to be kept waiting, even in leisure. In an increasingly competitive market place, it’s going to be so important for venues not to lose customers due to sloppy processes or delays on either side of the pass.

In conclusion, there are some dark clouds hovering over the overall market place, with some more turbulent times to follow no doubt. However, our guest feedback data shows a lot of customers are currently out for having a good time and the opportunity is to push those good times into great times, resulting in more visits, more loyalty and more revenue.