Imagine this: It’s Monday morning. You are nervously preparing the coffee you need.
Today, you will pour over data to convince your CFO to approve your budget.
You know that customer experience (CX) is more than just a buzzword. It’s a critical driver of restaurant traffic and revenue that you need to invest in.
The challenge? Turning those statistics into a narrative that speaks the CFO’s language.
But no sweat— with our comprehensive CX and financial performance data, we got you.
So let’s save you some time, break down the data, and get your CFO on board.
Data Talks: Better Customer Experience = Better Business
Analyzing customer feedback reveals valuable insights into what customers truly want.
This isn’t just theoretical; it’s backed by hard numbers.
Over the years, our data has consistently shown that improved customer experience translates into tangible growth.
In 2023, we broke down the term “hospitality” in full-service restaurants(FSR) using our AI.
We categorized online reviews with positive attributes (“welcome,” “friendly”) and negative ones (“rude,” “unprofessional”). Based on these terms, we calculated a “hospitality” net sentiment score (NSS).
The results? Restaurants with stronger NSS outperformed the rest of the market by 2.4% in sales growth and 1.8% in traffic growth.
And in a separate analysis, we explored the link between overall NSS and growth in traffic and sales.
The results? In Q3 of 2023, full- and limited-service brands with improved NSS experienced higher growth in both areas.
It’s clear: CX isn’t just about happy customers; it’s about profitable growth year-over-year.
Sizzling Six: What Makes a Guest’s Experience?
This change is due to years of inflation-driven price increases. Traffic growth is now a more reliable performance indicator.
For the most frequented restaurants using reviews, we found six key factors of the dining experience:
- Food
- Service
- Ambiance
- Beverage
- Value
- Intent to return
And food, service, and value were the main drivers for increasing traffic.
Service: In FSR, service is paramount. Those with the highest traffic had 5% better net sentiment in service than their peers. This data also showed significant gains in attentiveness, experience, and speed.
Food: Quality is key for FSR. On the contrary, limited-service patrons prioritize temperature. However, the critical differentiator across both sectors was portion size. Portion size even had high-traffic units scoring substantially better.
Value: More than food and service, value is a significant traffic driver. This has been especially true during economic uncertainty.
Restaurants with improved value sentiment saw 1.5x higher sales growth and 8x higher traffic growth.
5-Star Restaurant: The Impact of Reviews
Star ratings are often a potential customer’s first impression. A quick Google search, and there they are: impossible to ignore.
Our data showed over 1.4 million reviews on platforms like Google and Yelp, and Google stood out as the most influential.
Improvements in Google’s average star rating (ASR) correlated with higher sales and traffic growth.
For instance, limited-service restaurants with a 3.0-or-lower ASR experienced 23% worse traffic than their peers.
A Taste of Success: Using CX to Serve Up Better Business Results
CX is not just a soft metric; it’s a strategic financial difference-maker that propels success.
The data doesn’t lie: there is a very clear relationship between financial performance and CX quality.
To gain widespread buy-in to CX initiatives, you need to talk about it in these terms. In other words, “we need to focus on CX because it will generate X% more traffic and/or sales.”
And from there, you can start to use CX analysis to impact financial performance.
If traffic suddenly drops, for example, feedback data might reveal a surge in negative reviews about slow service. Leveraging that information can highlight where to focus improvement efforts.
Comparing customer feedback across locations helps identify best practices.
Likewise, analyzing competitors can reveal strategies to enhance performance.
In summary, customer experience insights are vital for pinpointing investment opportunities, resolving customer issues, and ultimately maximizing profits.
Embracing the constant flow of customer feedback can propel your business forward. Neglecting it can mean leaving your brand behind.
Learn more about how Black Box Intelligence helps you quantify the value of CX improvement.