CINCINNATI — Too many menu items. Not enough selection. Too healthy. Too unhealthy.
Restaurant customers aren’t easy to please. In the crowded fast-food and casual dining segments, patrons can afford to be picky.
“Loyalty is demonstrated by customers voting with their feet and their wallets in choosing whether to dine in a restaurant,” said Pete Miles-Prouten, senior vice-president of consumer markets at dunnhumbyUSA, a consumer research firm. “That long-term loyalty is the big prize here.”
In the showdown for stomach share, top chains face increasing challenges — pricing pressures, higher labor and food costs and discerning customers, to name a few. A key to standing out in the crowded industry is connecting with consumers through personalization, feedback and rewards.
“Some of the best brands are turning pain points into opportunities to listen and actually build relationships with customers in a true sense,” Mr. Miles-Prouten said. “Social and, particularly in this space, mobile have had an enormous impact on the ability of a brand to actually interact with their customers and get to a place where customers are providing ongoing input into menu design, into what promotions work for them, into what items they want to see at different points of the day, in how they order them, how they consume them.”
Researchers from dunnhumbyUSA measured consumer opinion of dozens of fast-food and casual dining chains. In an on-line survey, more than 40,000 participants were asked to rate restaurant brands on seven factors, including menu assortment, price, overall experience, feedback, promotions, loyalty and rewards, and communications. The company ranked the top 10 fast-food and casual-dining brands based on the results.
“We did research within the industry to look at what really drove loyalty and engagement amongst customers, and these seven pillars have emerged as the key drivers of that,” Mr. Miles-Prouten said. “So, this is really in the words of the customer with what’s important to them, not just us.…
“Within that, it’s around sets of questions on those seven pillars that really look to stress their level of excitement and satisfaction with that given retailer in those areas, and it’s designed to look more broadly than wait time or food quality or ingredients, but really at the overall experience of dining there.”
T.G.I. Friday’s topped the list of casual-dining restaurants, followed by Texas Roadhouse, LongHorn Steakhouse, and Bonefish Grill.
Among leading fast-food chains, In-N-Out Burger rated highest, ahead of Chick-fil-A, Culver’s, Subway and Whataburger.
“In-N-Out is clearly making a difference from an experience and price side of things,” Mr. Miles-Prouten said.
For fast-food chains, price and promotion are key factors for building customer loyalty. And speaking of loyalty, programs that foster consumer engagement and personalization are lacking in the category, the researchers found.
“We see pockets of brands doing lots of innovative things,” Mr. Miles-Prouten said. “What we don’t see in this space overall as much as we do in other industries is really looking at how to embed loyalty into the center of everything the business does.”
In casual dining, the menu matters. Top-rated brands offer a balance of signature dishes and exciting new items. According to dunnhumbyUSA’s report: “High-scoring companies don’t have the longest menu, just the items their customers want.”
In this sector, the experience may be as important as the food, the researchers noted. Texas Roadhouse and Bonefish Grill ranked favorably among consumers for ambiance and an enjoyable dining experience.
DunnhumbyUSA did not analyze fast-casual brands because the segment is not as clearly defined. Also, fast-food and casual dining restaurants are more competitive and may require more insight into how they perform against customer expectations.“In general, this move toward delivering an experience and more of a two-way street with customers is where the business is going,” Mr. Miles-Prouten said. “Those guys that really stand out in experience, feedback and loyalty are the ones that tend to bubble up to the top of the list in the survey this time around.”