Dynamics of Guest Loyalty

749 views

Published on

Lots of research has demonstrated that just because a customer feels "satisfied", they won't actually be "loyal". How can this be? And what can we do about it?

Published in: Business, Education
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
749
On SlideShare
0
From Embeds
0
Number of Embeds
5
Actions
Shares
0
Downloads
41
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Dynamics of Guest Loyalty

  1. 1. THE DYNAMICS OF GUEST LOYALTY IN THE RESTAURANT INDUSTRY A Presentation for Hospitality/Event Management Seminar September 8 th , 2010 with your host: Peter Straube!
  2. 2. “ Loyalty” means: <ul><li>Providing repeat business </li></ul><ul><li>Resistance to “switching behavior” </li></ul><ul><li>Giving company “second chances” </li></ul><ul><li>Less price sensitivity </li></ul><ul><li>Contributing “word of mouth” advertising </li></ul>
  3. 3. <ul><li>44% of new customers come because of a personal recommendation. </li></ul><ul><li>10% more come with a repeat customer </li></ul><ul><li>80% of guests in casual theme restaurants are repeat guests. (Source: National Restaurant Association) </li></ul>
  4. 4. Benefits of Loyalty: <ul><li>Increased revenues and growth rate (due to keeping customers) </li></ul><ul><li>Enhanced new customer base (from customer recommendations) </li></ul><ul><li>Greater efficiency and higher profits </li></ul>
  5. 5. Common Assumption: “SATISFACTION” = Meeting Expectations
  6. 6. The problem: <ul><li>Between 65% and 85% of customers who defect say they were “satisfied” or “very satisfied” with their former supplier. </li></ul><ul><li>(Source: Reichheld, 1993) </li></ul>
  7. 8. (insert loyalmaslow.bmp)
  8. 9. (insert loyalherzberg.bmp)
  9. 10. (insert loyalfigure2b.bmp)
  10. 11. (insert loyalhypothes.bmp)
  11. 12. The concept of “Mattering” * * A term coined by Morris Rosenberg at the University of Maryland
  12. 13. Experimental Approach Look for the co-existence of: <ul><li>1. Loyal Behavior </li></ul><ul><li>Indications of Affiliation and Social Connection </li></ul>
  13. 14. Focus Group Themes: <ul><li>The Basics </li></ul><ul><li>Trust </li></ul><ul><li>Personal Recognition </li></ul><ul><li>Individualized Service </li></ul><ul><li>Personal Relationships </li></ul>
  14. 15. Prescriptions for Building Loyalty
  15. 16. <ul><li>Raise awareness among staff & management </li></ul><ul><li>Hire people who have natural rapport-building skills </li></ul><ul><li>Teach and reward the learning and use of customers’ names. </li></ul><ul><li>Train and encourage employees to “read” their customers, and to personalize each service encounter. </li></ul>
  16. 17. <ul><li>Go out of your way to respond to service failures or customer complaints. </li></ul><ul><li>Empower employees to respond to customer problems without mgmt. approval. </li></ul><ul><li>Reinforce relationship-building through employee incentive/reward programs. </li></ul>
  17. 18. <ul><li>Invest in Employee Retention. </li></ul><ul><li>Adjust you guest feedback tools to measure for loyalty indicators. </li></ul><ul><li>Target the “right” customers. </li></ul>
  18. 19. Conclusions: <ul><li>If your guests are allowed to feel “anonymous” in your establishment, it will be almost impossible to gain their loyalty. </li></ul><ul><li>The concept of “Mattering” can be applied to any relationship: business/customer, business/employee, significant others, etc. </li></ul>
  19. 20. <ul><li>Group Challenge: </li></ul><ul><li>BRAINSTORM! </li></ul>

×