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Making diners happy is the number one way restaurants can differentiate and drive sales.

Is Customer Service the Cure for the Restaurant Recession?

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How employees interact with consumers may make the difference in their decision to dine out.
By Josh Ostrega June 2017 Expert Insights

The full-service restaurant industry is in a state of stagnation.

For the past few years, traditional sit-down eateries have faced a two-pronged problem. The first is economic: Saddled with higher living costs, consumers are tightening their budgets, and eating out is often the first discretionary expense to get the axe. The second challenge comes in the form of competition from the ever-expanding ranks of both fast-casual restaurants, like Chipotle, and app-based food delivery services, like Postmates and Seamless.

Eateries that depend on sit-down business are feeling the impact. As a report by The NPD Group revealed, patronage at full-service restaurants dropped by 2 percent in 2016. In the same report, the NPD revealed that the total number of independent restaurants per 1 million people had fallen by 4 percent compared to fall 2007. These declines represent “the most significant drop in total U.S. restaurant counts since the recession of 2008,” according to an NPD product management director. Unfortunately for independent restaurateurs, the industry may be facing a recession of its own, as restaurants continue to post lower sales figures quarter after quarter, according to Moody’s Investors Service.

In an uncertain restaurant economy, owners must take proactive steps to remain competitive. But their strategy shouldn’t seek to emulate the fast casual or sharing economy models; instead, it should play to a unique quality the in-restaurant experience offers: quality in-person service. Here are three ways restaurants can harness and strengthen customer service to flourish in an otherwise stagnant industry.

1. Avoid Automation and Promote Personalization

Some restaurants are looking to tech solutions like automated order kiosks to replace traditional human-based tasks. But while this push for automation may work for fast food chains, it doesn’t make sense for establishments built around the in-restaurant experience. When it comes to full-service restaurants, the human touch is not an expendable asset. Instead of solely investing in automated tools, restaurants should make a commensurate investment in their people, prioritizing measures that help workers provide more personalized service resulting in a greater customer experience. Rather than looking to automation as the strategic differentiator, restaurants should view top-tier customer service as the element that sets them apart from their competitors.

2. Prioritize Better Training

Restaurants with the best customer service project a clear and distinct brand image that is consistent across all employees. But successful branding isn’t something restaurants can just stumble into; instead, it’s the result of carefully structured organization and seamless training. For full-service restaurants, the recipe for a successful brand image begins with quality service. By developing well-defined easily digestible training that include targeted interactive content and post-training assessments, restaurants can ensure that their employees provide a uniform caliber of service—one that communicates a strong brand message.

3. Commit to Your Employees

Creating a more personalized and engaging restaurant experience is as much about employees as it is about customers. Restaurants with poor working environments—think unpredictable hours and constant staffing shortages—can expect frequent employee turnover. As a result, they’re left with a transient staff that’s not invested in building the brand or delivering its message to customers. Conversely, restaurants that demonstrate commitment to their employees through measures like better shift management and schedule flexibility can build a base of long-term workers that is equipped with the skills and knowledge to be true brand ambassadors.

As a full-service independent restaurant owner, you can’t afford to flexibly alter your pricing structure the way grocery stores can. But in the midst of a stagnant industry, you also can’t miss opportunities to be proactive. By prioritizing better and more individualized customer service through better trained and more engaged staff, restaurants will succeed, and customers will be motivated to spend on the pleasure of the in-restaurant experience. 

Joshua Ostrega is the chief operating officer and co-founder of WorkJam, an employee engagement platform for the service industry. A tech entrepreneur at heart, Joshua is passionate about pushing forward new ideas and reshaping products and services to take on new global opportunities. At WorkJam, Joshua is responsible for the management and day-to-day operations of the company. Joshua graduated from McGill University with a Bachelor of Commerce.