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Social Media Influence on Restaurant Patrons

Caught an interesting article on VegasInc.com about social media in the restaurant industry and effective it is in attracting customers. You might be surprised by some of these findings. I was.

  • adults who use Instagram has doubled in two years from 13 percent in 2012 to 26 percent in 2014
  • 62% of Americans say social media has no effect on buying decisions
  • the average restaurant has a mere 3 percent engagement rate on social media
  • social media, online reviews tend to have a greater effect on smaller, higher end restaurants

The article goes on to bash Yelp, calling it the yellow pages with pictures and that most of the reviews lack substance with more focus on smaller, personal things vs. the food or the service. We’ve talked a lot about Yelp this year and most of the feedback about Yelp from restaurant operators tends to be negative.

While social media seems to be less effective in restaurants, what they found works best is old fashion schmoozing and coupons.

  • inviting people to try food
  • boast about your staff
  • make regulars feel special when they show up
  • stand behind your product
  • ask guests to come back and bring their friends
  • 90% of people said a coupon will influence their buying decision
  • 78% said word of mouth will influence their buying decision

The article concludes by saying that you need to know your audience. A lesson here can be taken from JC Penny when tried to go the Nordstrom route and not have any sales. It flopped big time. Their clients are accustomed to sales and deals so when that stopped so did the shopping. They quickly changed back. Know what your customers want and make sure you give it to them.

I have copied the full article below.

If you build it — a social media bridge to restaurantgoers — they will come, right?

Not so fast.

Social media is all the rage: The Pew Research Center reports adults who use Instagram has doubled in two years from 13 percent in 2012 to 26 percent in 2014.

But a majority of Americans — 62 percent — say social media has no effect on their purchasing decisions. In the restaurant industry, the Sprinklr Social Business Index reports the average restaurant has a mere 3 percent engagement rate on social media.

That means restaurants would be better off ratcheting down their social media expectations and connecting with consumers offline. Offline word-of-mouth, from face-to-face or phone conversations, has a significant advantage (50 percent vs. 43 percent) over online interactions with respect to purchase intent, a Keller Fay Group TalkTrack study found.

The good news is there are lots of ways to engage customers offline, including stellar food and service, loyalty programs, friendly hosts and servers, charity work and community involvement.

The perks and pitfalls of social media

Armand Iaia, regional manager for the Chicago-based restaurant consulting firm Cini-Little International Inc., says social media messages often are perceived as just another form of advertising.

“Many people are immune to this kind of advertising and do not pay attention to it. I don’t,” he said.

But Gary Worden, a restaurant operator and publisher of Restaurant Startup and Growth magazine, said social media can play an important role for smaller restaurants. Good reviews can boost business.

“Independent restaurants particularly seem to generate a good number of reviews that can have an effect on prospective guests and guest visits,” Worden said. “The higher the restaurant menu prices or if the guest has friends or a special occasion, the more influence the social media reviews can play a role.”

Examine the source

Still, “while social media will influence people and help or hurt the innocent, I say examine the source,” said Steve Nachwalter, CEO of the Nachwalter Consulting Group in Las Vegas. “In human decision-making, there are always internal representations made in regard to how each individual receives and processes information.”

Yelp, which publishes crowd-sourced reviews about businesses, by definition is subjective and therefore can harm businesses if reviews are negative — even if they are unfair.

“Logically, we can’t punish the chef for a mistake the waiter made and subsequently bash a restaurant that has amazing food,” Nachwalter said. “In the same vein, a less-than-great place receives five stars because the hostess is hot or because the greeter made them feel special.”

Nachwalter said he viewed Yelp as “an online Yellow Pages with photos.”

“I don’t pay too much attention to individual reviews because I’ve seen too many unprofessional and untrue reviews,” he said. “I’m not in a position to judge people one way or the other, but I am intelligent enough to know when someone is bashing a place over personal nonsense.”

What can be a more effective method of attracting and maintaining customers is schmoozing.

Restaurant owners “should invite people to try their food,” Nachwalter said. “People are visual, so show pictures. Talk about your staff, make them real and personal. Stand behind your product and make everyone aware of your presences in the space. Make regulars feel special. Make a big deal when they come in. Mention bringing their friends. Ask directly for referrals.”

Employees can help if they have been trained on how to connect with customers and how to give them the experience they want.

“It all starts at who represents your brand,” Nachwalter said.

Explore the workplace

Whereas digital advertising appears to do little to influence consumer dining decisions, customers have a harder time turning down rave reviews or good deals.

Almost 90 percent of people surveyed by WorkPlace Impact said a good old-fashioned coupon influences them, while 78 percent said word of mouth did.

Since Americans spend a large share of their lives at work, the workplace becomes a natural venue for people to share opinions, experiences and recommendations with co-workers — including about where to eat.

“A lot of the decisions (people) make about dining are made while at the office,” said Tara Peters, director of marketing at WorkPlace Impact.

Peters’ firm helps restaurants reach workers during the workday with the goal of attracting new customers.

“When we are running a marketing program for a restaurant client, we will send their materials to businesses close to their restaurants” and have employers hand out coupons to workers, Peters said. “Employers in our network love giving their employees these perks. ”

Know your audience

Despite the power of face-to-face interaction, restaurants aren’t about to abandon social media, which means it is important owners learn to view it accurately and use it wisely.

Making social media more effective comes down to knowing your audience, Nachwalter said.

“The top restaurants don’t offer coupons, just like heart surgeons don’t offer two-for-one,” he said. “Decide what your audience wants, and give it to them.”

Restaurateurs also have to take negative comments in stride and trust people will see through insincere reviews.

Nachwalter recalled one eatery with amazing reviews.

“There was still a lady who did not love it,” he said. “Her reason was because, even though she loved the food, the flower they make out of gelato did not look floral enough. So she gave them one star.”

Scientific Trick to Increase Server Tips

I was watching this YouTube video, a summary of Robert Cialdini’s book Influence.   They talked about experiments that were run in restaurants and how the server’s used the rule of reciprocation to increase tips. The reciprocation principle recognizes that people feel indebted to those who give them a gift.  The social obligation to return a gift is overwhelming in some cases, even if the original gift wasn’t wanted.  This may have been the origin of giving mints or fortune cookies when presenting the bill.

Screenshot 2015-08-09 08.41.41

Here are the results of the experiments:

  • When people were surveyed and asked if they received a mint would they tip more – most people said no, but the experiment showed that tips did increase.
  • Giving diners a single mint increased tips by 3%
  • Giving diners two mints quadrupled tips by 14%
  • This is the most interesting stat:
    • If the server gives the table one mint and walks away
    • Stops and returns to the table and says “For you nice people here is another mint.”
    • Tips went up 23%.
    • It wasn’t what was given but how the mints were given that increased the tips.
  • The key to reciprocation:
    • Give First
    • Ensure what you give is personalized and unexpected.

I encourage our restaurant manager’s to run this experiment in their own restaurants and we would love to hear how it works.

Norm Macdonald Takes Over as the Colonel

I caught an article on entrepreneur.com about KFC bringing in Norm Macdonald to replace Darrell Hammond in their attempt to revive Col Sanders as part of their latest marketing campaign. The author focusing more on the marketing aspect of the change, but he’s a little harsh on some points. Probably trying to get some shock value out of the article.

Both Norm and Darrell are funny and are hardly “marginal talent”, but everyone is entitled to their opinion.

A couple of interesting points that he brings up in the article:

  • YUM has invested $185 million in to turning KFC around
  • In the 80’s Burger King invested $40 million into the failed campaign, Herb
  • A recent survey showed that 20% of people hate the new Col Sanders campaign
  • 60% of millennials have not eaten at KFC

I don’t know that KFC and Pizza Hut are performing as horribly as the author makes it out to seem, but I don’t know that for sure. I have copied the full article below. We’d love to hear some of your thoughts on the article.

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The sky is falling, and KFC is trying to make chicken salad out of chicken scratch.

KFC, a unit of Yum Brands, has switched the actors who portray company founder Col. Harland Sanders, swapping in marginally talented Saturday Night Live alum Norm Macdonald to replace marginally talented Saturday Night Live alum Darrell Hammond.

It’s is an odd move. The idea that an actor change will make the ad campaign any easier to swallow is nonsense, since it isn’t the actor but the role that so many consumers don’t like. The real-life Harland Sanders was complicated, and he was authentic. Yes, Sanders lived his life as if he were in character, but he played that part well, far better than Hammond could and MacDonald can.

The new Colonel is a caricature, carefuly choreographed by the company and its creative hired hands. Instead of resurrecting the Colonel to lead KFC’s sales back to their former fried glory, the company has instead unleashed a childish pantomime that people old enough to remember Colonel Sanders don’t like and people too young to know him can’t possibly understand.

It’s tricky to exorcise the dead, which is why it’s so rarely done and why it always leads to bad consequences, whether it’s with a Oujia board,Pet Semetary or a $185 million investment from your parent company to spruce up your brand.

What’s more, KFC is trying to sanitize Sanders’ image, even though, in this day and age when many people glorify the role of the entrepreneur, it doesn’t need a comic cleansing. Harland Sanders had a string of failed businesses, left his first family in the dust, had a temper that caused him to brawl with associates, knew his customers better than his competitors and wore the same outfit every day to polish his image. Yes, before there was a Steve Jobs, there was a Colonel Sanders. The truth should be enough.

Yet, KFC, in a feint to its authentic roots, has opted to fake the history, focusing on the banjos and white limosuines, which belies the intelligence and vision that helped Sanders create Kentucky Fried Chicken in the first place — an intelligence that today’s consumers, particularly the sought-after millenials, can relate to and respect. Instead, watching these commercials is like buying a ticket to Paris and ending up in Epcot.

Bad ad campaigns have lasting impressions. The Colonel Sanders reboot is rapidly becoming the most ridiculed fast-food campaign since the “Where’s Herb?” fiasco of the mid-1980’s. There, Burger King spent $40 million, including a Super Bowl advert, to create “Herb,” a bald, middle-aged geek who had never been to Burger King. You got discounts if you ordered your Whopper and informed the counter worker that you weren’t Herb. (And fast-food workers nowadays think they’re overworked and underpaid?) You could win prizes if you found Herb in a restaurant. Trouble was, no one looked for Herb because smart families tended to avoid middle-aged, creepy men who hung out in Burger Kings. The campaign lasted three months, and they’re still teaching its lessons in college today.

Look, everyone makes mistakes, but most good leaders recognize that and learn from it. Sometimes big brands realize that their products are awful (New Coke) or shows like Saturday Night Live realize the talent sucks (Norm Macdonald). It is then incumbent on management to pull the plug quickly and focus resources elsewhere. In Lean Startup terms, you put out a minimum viable product, see customer reaction and decide where to go.

KFC, however, has decided to take its bad hand and double down. The company has said its research suggests that one in five people hate the campaign. Amazingly, during an investor conference in May, Yum Brands CEO Greg Creed said that was just fine with him.

“That’s better than 100 percent being indifferent,” Creed said, according to Food Business News. “And that really is what’s important. We had lost relevance in the U.S. Sixty percent of millennials had not eaten KFC.”

Not only that, but Creed said he was “very excited that this work is really distinctive and disruptive. And I am actually quite happy that 20 percent hate it, because now they at least have an opinion. They’re actually talking about KFC, and you can market to love and hate; you cannot market to indifference.”

Well, yes, but being hated doesn’t automatically make you relevant. It just makes you hated. Relevance equates to sales, but indifference and hate both breed people who would rather go eat at Chick-fil-A.

I suppose in some twisted ad-agency world being pleased with a campaign because it generates 20 percent negatives means you need to work harder to get that number up to, say, half. But the real world would say it’s time to rethink the mission. And KFC needs help. The only reason it isn’t the worst restaurant at Yum Brands is that the company is still keeping Pizza Hut on life support. Other competitors have credible chicken offerings. Fast casual is taking share from all traditional fast-food companies.

That means KFC has little room for error to continue down failing paths. The consequences are that, if it isn’t honest about the true disdain much of the public has for this campaign, sales will fall, customers will go elsewhere, franchisees will fail and people will lose jobs. That’s no laughing matter, even for people with a sense of humor so twisted they think Norm MacDonald or Darrell Hammond are funny and have millenial appeal.

Let Colonel Harland Sanders recquiescat in pace. It might be the easiest way for KFC to stop digging its own grave.

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