When You’re Ready, We’re Here: Using Gift Cards to Boost Sales
It’s no secret that restaurants nationwide are hurting as we combat the spread of COVID-19. Some have closed completely for the time being, while...
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The risk of poor reviews may cause some establishments to shy away from digital ordering. While this is a legitimate concern, there are proven strategies restaurants and c-stores can implement to bounce back from a poor review and solidify customer loyalty.
Paytronix has published The Order & Delivery Report 2022, which details this trend and the data surrounding it. This blog and the ones that follow will highlight findings from that report, as well as sheds new light on recently acquired data.
What’s in a review?
It’s important to consider the potential implications of a review. Not surprisingly, customers who give the restaurant or c-store a rating of 4.9 or higher are most likely to return. While 1-star ratings may not be the most pleasant to receive, they’re not necessarily indicative of a customer’s behavior, as customers who leave 1-star ratings are as likely to return as those who leave a 2.4-star rating. Customers leaving a 1-star review may be acting in the heat of the moment or reacting without consideration, or may even be leaving simple reviews to speed through the process. Reviews with more nuance are typically written with more scrutiny.
The best indicator of whether a patron will return is if they received exemplary food, service, and value. Customers who give 5-star reviews in those particular categories are the most likely to revisit, and the three categories correlate with likelihood to return almost exactly.
However, as the ratings drop, value becomes more important than both food and service. At 1- and 2- star ratings, customers are more forgiving of poor food and service experiences than they are if they feel their dollar was not well-spent. Customers require high marks across the board to give an establishment a top rating, but they will be satisfied knowing they got their money’s worth even if the food and service are marginal.
Saving a customer relationship
A poor review should be viewed as an invitation, not a dismissal. Our data indicates restaurant and c-store operators can provide positive guest experiences in the wake of a bad review. To salvage the guest relationship after a less-than-stellar review, offering a coupon may be the best move a restaurant or c-store can make. Not only does it improve the chance a guest will return, but the marketing investment for this type of incentive makes sense. Time is of the essence when a customer has a poor experience. The Paytronix FEEDbackSM tool relays customer reviews to the store manager immediately. The store manager can then change a quality control issue and send a guest recovery coupon and message right away. By implementing a guest recovery coupon strategy for online ordering, restaurants and c-stores can win back up to 13% of customers who left a 1-star review.
Moreover, the coupon results in an average increase in Customer Lifetime Value (CLV) of $9.20 – a 4x return – meaning that as long as a restaurant or c-store’s profit margins are greater than 25% (as we know from experience most are), then the coupon is more than worth its cost.
No one wants to see a 1-star review. But with a planned coupon strategy and the right technology to put control in the front-line manager’s hands, brands can flip the script and help turn negative reviews into profitable customers.
