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[24 comments]

Local restaurants pass/fail personal loyalty test

July 7, 2014

As I've written before on this site, if a retailer wants my loyalty, they need to earn it. Two recent experiences at local restaurants presented a particular challenge. My visits could have resulted in the short-term loss of revenue for both, but the respective reactions of the restaurant staff means one has earned my business going forward and the other has lost it.

Let's start with the negative so we can end on a high note. Last month, our youngest child had her "stepping up" ceremony as recognition of having completed kindergarten. Her graduation, as she called it, was a big deal to her, but having landed on the same day as her big sister's birthday and near her brother's graduation from high school, she felt it was a little underplayed by the family.

Being a "tell it like she sees it" kid, she told us she would like a family dinner to celebrate her achievement and she would like to help bake a cake to commemorate the occasion. We thought her request reasonable, so we set aside a weekend day for the cake baking and decided it would be nice to have the family dinner out at a local restaurant.

When we arrived at a local brick oven pizza place, we were informed we would be charged $3 per person if we ate the cake in the restaurant. Even after explaining the nature of our celebration and how the cake came to be baked, we were told there were no exceptions and our choice was to pay $21 to eat our own cake.

Despite my urging otherwise, we sat down to eat since it was a busy weekend evening. When it came time for dessert, we did not ask for plates for our daughter's cake. We all got a good laugh when the waiter asked if we'd like to see the dessert menu. I won't speak for the other family members, but this restaurant, which I patronized four to six times a year before this incident, will not be getting any more of my business.

Now to the other story: About a week after the birthday cake incident, I was out running errands around town and ran into my wife and daughter who had just come from getting a drink following a dance class. It was getting near lunch and my wife suggested we get a bite to eat. Our daughter asked if we could visit a nearby café that specialized in crepes.

Here we were, with their two almost full drinks in hand, walking into another restaurant. Instead of giving us a hard time about the drinks, which were clearly labeled as being from another business, the owner said it was no problem. People in our town, she said, walk around and go in and out of shops and restaurants. It was normal to see patrons walk in with a drink from a deli or coffee shop. Should she get upset when they could be walking into other shops with her drinks to go? It made sense to me as does a return visit to Paris Café in Cranford, NJ.

Discussion Questions:

Do most retailers and other businesses grasp that emotional loyalty is key to deeper customer engagement? Why do you think many businesses, as in one case here, take a short-term view of their relationship with customers?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How successful are most retailers and restaurants in developing emotional loyalty with their customers?

Comments:

Sorry, I'm not sure the one being unreasonable was the restaurant, George. You wanted them to do it your way and, when there was a price attached to it, you balked. Most restaurants have a corkage fee, this is not much different. You could have gotten what you wanted and just paid the fee, or called ahead to check.

This is such a rare and isolated case, I can't see the practical implications for the restaurant.

I'd like to turn the question around, why do you think a customer takes a short-term view of a restaurant and expects any request outside of stated policy, not "free equals death to their loyalty?"

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Bob Phibbs, President/CEO, The Retail Doctor

Most retailers do make a strong attempt to connect emotionally and build loyalty with their customers. Where they get challenged in their busy worlds is in properly discussing and training their associates about customer relations. In the hospitality business it can be especially challenging, as the turn-over rate of associates can be as high as 300 percent per-year.

Nevertheless, the manager of the first restaurant wasn't quite at the top of his/her game. Instead of providing an added $21 "service charge," the manager should have asked George's young "graduate" if she would like some ice cream, on the house, for her cake.

One of the primary reasons that consumers choose a particular restaurant is the knowledgeable, friendly staff. This is the hospitality business with which we all interact on an ongoing basis.

Common sense, alas, is not often common enough.

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Roger Saunders, Managing Director, Prosper Business Development

I have to disagree with Bob on this one. The restaurant may have a "policy," but how often does this sort of situation arise requiring a policy in the first place? Not often, I'm guessing. And isn't there room for exceptions to such hard-and-fast rules in the first place? The larger point is that any service provider needs to be especially careful not to be penny-wise and pound-foolish, at risk of chasing away regular customers like George.

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Dick Seesel, Principal, Retailing In Focus LLC

No—most small businesses do not understand loyalty or why they are deserving of their customers. They seem to hit a certain level of success and the business kind of goes into autopilot and they lose site of who and what keeps the doors open for them.

Often a lone employee can be the problem, but I believe in any business big or small, management sets the tone and it trickles down until it hits the customers. In the case of the homemade cake, this was complete blindness and lack of consideration for the customer, unless George's daughter is opening a bakery on the same block.

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Ken Lonyai, Digital Innovation Strategist, co-founder, ScreenPlay InterActive

I can see both sides in George's pizza restaurant experience. It was a special occasion and the family wanted to celebrate with the homemade cake. The restaurant, in George's opinion, should have not levied a surcharge for a customer bringing in a cake. Yet, restaurants regularly charge corkage fees for customers bringing in their own wine, and the family was told upfront that there would be a fee for bringing in the cake. Where does a restauranteur draw the line? Perhaps a call to the restaurant beforehand would have been in order.

Emotional loyalty does not necessarily mean giving a customer everything he wants. It's a fine balance.

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Max Goldberg, President, Max Goldberg & Associates

Welcome to the world of "for profit" in any way, even at the expense of future business. I have experienced the same "cake" type incident when out with family and friends. We made a similar decision and have stuck with it. That restaurant has not noticed, but we have not been back.

See, here is the problem. The restaurant does not know that you have not been back. So, to them, they have not seen a loss. It is only when the incident gets publicized on social media and it gets back to them. Then we might see changes.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

A big part of true customer loyalty is the customer's expectation of a positive experience. I know that every trip to Trader Joe's will be a happy experience, and that keeps me coming back. And I know that when I go to the grocery chain closer to my house, there will be only one checker, and a long line. Loyalty isn't about apps or coupons; it's about high expectations which are then met.

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Cathy Hotka, Principal, Cathy Hotka & Associates

Knowing the pizza restaurant George refers to negatively—he and I had lunch there a few years ago—I can confidently write that there are other reasons why my family doesn't eat there. The food is just average and the service is uneven at best.

Looking at the issue more broadly than downtown Cranford, I've seen a mixed bag in terms of customer engagement over the last decade, but a trend toward more intimacy and one-on-one marketing during the past year or two. I attribute this to training and the importance placed on attracting and retaining customers by management.

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Ron Margulis, Managing Director, RAM Communications

To Bob: Restaurants in our town, many of whom operate without a liquor license, make a point of letting patrons know they can bring their own bottle of wine to offset any competitive disadvantage with the establishments that serve alcohol. There is no corkage fee attached, because they know it would result in lost sales.

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George Anderson, Editor-in-Chief/Associate Publisher, RetailWire LLC

The first restaurant was very foolish indeed, as they usually should welcome this occasion as a chance to make the young girl feel special. Instead they acted like idiots, even after the folks spent plenty of money on pizza. What if the girl had a gluten allergy or was a diabetic, and needed something safe to share with her family. I have brought special diabetic desserts to restaurants several times, and actually made extra for the chef and the staff. We were treated well, and everyone had a great time, not to mention an extra tip for the effort.

The other incident was handled perfectly, and I applaud the fact that there are still businesses that use common sense, because in the long run, you will win.

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Tony Orlando, Owner, Tony O's Supermarket & Catering

Everybody understands corking fees, and I don't think any of us would bring in a bottle to a restaurant with wine on the menu. We also know not to bring a tuna sandwich from home and expect to sit down in a restaurant and eat it. This was a little kid's graduation party, for crying out loud. It wasn't going to set a precedent, and even if it did, you could create/enforce rules if it actually became a problem. Roger is spot-on; the restaurant should have given the kid a scoop of ice cream, on the house, and wished her congratulations. Sheesh!

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Warren Thayer, Editor & Managing Partner, Frozen & Refrigerated Buyer

So George, your town holds restaurants hostage if they charge corkage? Sorry, sounds like a fairly entitled enclave.

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Bob Phibbs, President/CEO, The Retail Doctor

Bringing food into a restaurant is just plane rude. Even if the owners say its OK, it's still rude. This has nothing to do with loyalty or building a relationship, and more to do with whining because someone wanted to get away with something for nothing.

David Livingston, Principal, DJL Research

Think Cheers; you want to go to a place where everyone knows your name (or if they don't, they fake it really well). Knowing a customer's name or at least recognizing them creates a bond that is stronger than just the items the retailer is selling.

As the article points out, these emotional bonds come into play when making a buying decision. In this case I doubt if the staff at the first restaurant knew George's name and they certainly didn't know how to fake it.

It also shows the danger in having hard-and-fast policies. While they are easier to teach than the use of good judgment, they can result in losing business. That being said I created the following customer service equation: "Empowerment before education equals chaos." I use it as a cautionary statement for those retailers who don't teach their employees what it means to deliver good/great customer service.

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Steve Montgomery, President, b2b Solutions, LLC

Most retailers don't care about much beyond the immediate transaction.

Why not?

Can't really say, except that somewhere along the last 25 years or so finance became more critical than marketing in many retail organizations and financial rules don't bend—well—at least not in the customers favor.

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Ryan Mathews, Founder, ceo, Black Monk Consulting

No, my experience has been that restaurants in particular have devalued the role that loyalty plays in their business model, often choosing to be "penny-wise and pound-foolish" by following policies strictly. The ones that value their customers so stand out that we change our patterns to favor them almost immediately.

On the other hand, many smaller retailers outside of the restaurant industry seem to understand the connection between loyalty and success. I have experienced outstanding service and care from smaller shops and coffeehouses, and am pleased to recommend them whenever possible.

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Mark Price, Managing Partner, M Squared Group, Inc.

OMG—this is a pizza restaurant, not a five-star known for its desserts.

This reminds me of the days of the opening of first Barnes & Noble big stores. In Westport, Connecticut, there was a very nice local book shop. I forget the name. It was cute and everyone knew it. I am in there one day and the owner is complaining about the Barnes & Noble opening less than one mile away. "I will never be able to beat their prices," she lamented.

Meanwhile, there was another patron in the stacks, reading a book. The owner excused herself from our conversation and called to the other patron, "Either buy it or put it back, this is not a library."

The store, which had been in business for over 20 years, was closed within a year.

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Gene Detroyer, Professor, Independent

The pizza restaurant not only lost more business from George, but it also hurt its long-range future. George's little daughter probably will not patronize the place herself when she grows older. But wait: with such a lack of customer service and smarts, the restaurant won't be around when she is older.

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John Karolefski, Editor in Chief, CPGmatters.com

Whenever (not if) there is a problem with a customer, the goal is to do more than just fix or resolve the problem. The goal is to also restore confidence. The question to ask is, "Is what I'm doing now going to get the customer to want to come back next time?" That's a start. In conflict remember that you're not trying to win the argument. You're trying to win the customer.

Successful retailers are flexible. Guidelines are softer than hard rules. Customer-focused attitudes and cultures win.

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Shep Hyken, Chief Amazement Officer, Shepard Presentations, LLC

Ridiculous. This is precisely why some retail outlets fail. I would have left and not even given the pizza place my business that day either (of course I would have also let everyone I know hear about it on social media too). And since this is a "rare and isolated case," the pizza place could have made an exception! Short term thinking and lack of emotional intelligence = lost business.

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Brian Numainville, Principal, The Retail Feedback Group

Creating positive customer experiences is hit or miss across retailers, restaurants, and hotels. Organizations get the employee behavior they reward. Service quality is not easily measured, not often monitored, and not as valued as financial results for most organizations.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

If you want employees to drive customer loyalty, then you need to give them the wheel.

Unfortunately, formal employee training programs are designed to solidly ensure company performance and typically lack the flexibility to accept employee input or troubleshooting.

Forward-thinking companies like Zappos, Caesars, USAA and (my company) Air Miles, liberate front-line employees so that thy can become spontaneous customer advocates.

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Bryan Pearson, President and CEO, LoyaltyOne

This is a case of judgement by the store/restaurant management. The customer is always right, however, there has to be a limit to what the customer can receive. It's good business to make a personal offer to the customer when ever possible, especially in stores that cannot afford labor to service the customer traffic as well as they would like. When a one-on-one customer situation does arise, regardless of location format (QSR, full-service, etc.) the staff needs to be trained to be ready with a consistent response to inquiries.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

Courtesy, proper manners and reasonable expectations are qualities without rules and or reference for retailers in the good ole' USA, making the topic we have here highly subjective from any and all perspectives. I see customers all day and the anticipations they arrive with are always changing in new directions. These new expectations are sometimes seen as appalling to retailers that are unable to embrace change that serves a customers need with no detriment to the business or its patrons and vendors.

When management arrives at its highest level of tolerance for social behavioral evolution, the time to consider stepping aside for the benefit of the business is at hand and needs immediate action. This is not about the consumer, it is about the business and its growth, stability and future.

'gjarnoldjr'

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