Consumer Trends | May 2012 | By Denene Bronx

Market Research Tools Get Futuristic

Quick-service brands are ditching traditional market research in favor of new technologies to gather real-time customer feedback.

In today’s social media–driven world, customers have come to expect to have their voices heard quickly. And many quick-service operators are taking advantage of this by breaking away from outdated market research tactics like focus groups and surveys and utilizing technology to solicit valuable customer feedback.

Whether operators invest in sophisticated customer-feedback-management software through their POS systems or in-store kiosks, use video-game-like virtual worlds to test changes, or capitalize on popular social media outlets to hear from customers, the goal is the same: Use technology to gather feedback and improve the business in real time.

“Focus groups and surveys were an effective approach to gathering information from customers, but somewhat skewed because it was always an ‘asked, then answered’ scenario,” says Brendan Kownacki, a communications consultant for Black & Orange, a Washington, D.C.–based fast-casual burger restaurant.

“Technology provides an open forum where customers are comfortable sharing thoughts and opinions when they are not solicited, and this means a natural reaction. Technology lets people react in the moment and off the cuff, so you get a very real representation of what people are thinking. All businesses want to hear positive reactions to their brand, but that is not always the most productive business decision, so it can be useful to get a very raw reaction from your customer base.”

Kownacki says Black & Orange turns to social media for customer feedback, maintaining a dialogue with its fans and asking them what they like and don’t like. Other quick-service brands have opted to employ social media for feedback purposes, as well. Taco Bell, for example, uses its Taco Entourage online community to gather recommendations from its biggest fans.

Ann Arbor, Michigan–based Domino’s Pizza launched its Think Oven tool in 2011 on Facebook to encourage fans to submit innovative ideas. Its Facebook page has an “Ideas” section where customers can submit any ideas they have for the brand. There is also a “Projects” section, where the company asks fans for opinions on specific items. The company’s first project campaign asks fans to submit ideas for a new employee uniform.

“Social media has become a place where people feel comfortable being honest,” says Domino’s spokesman Chris Brandon. “We love this avenue of hearing what our customers think, not to mention it’s a place where people know if they reach out to us, we will respond.”

Modern methods like this for gathering feedback save operators valuable time and help them keep up with customer demand in real time. That’s true for Las Vegas–based Capriotti’s, a sandwich shop with 75 locations in 12 states, which now utilizes its POS system to encourage customer feedback. The POS includes a soft solicitation on every receipt to complete a survey.

“Before this, we were really flying blind,” says Ashley Morris, Capriotti’s CEO. “We weren’t gathering a lot of data. I don’t think that limited data we were getting would be as effective compared to what we’re getting now. So for us, this is a far better way to gather data.”

Morris warns operators that failing to utilize technology to engage with customers is a lost opportunity. “First and foremost, if you’re not doing this now, in some capacity, you’re way behind the rest of the restaurant industry,” he says. “The data is so invaluable that you just don’t know all the ways you can use it until you have it. If there is any chain that doesn’t have it, they should really be looking into it because it’s a game changer, for sure.”

Through modern technologies like social media and various POS tools, operators can access immediate feedback on attributes like individual store cleanliness, menu options, speed of service, and food quality—feedback that comes directly from a customer motivated to share their experiences. This information can be used to measure store problems, trends, and guest loyalty.

Some new technology is even helping operators test major brand changes like menuboards, pricing, and promotions. InContext Solutions is one market research provider that creates virtual worlds in which retailers can apply changes to video-game-style versions of their stores. Real customers are then asked to explore those environments and answer questions about their experience, which InContext Solutions measures and uses to help its clients make changes.

“When you do it virtually, you can make a ton of changes very quickly without having to build anything in the real world,” says Bob Gillespie, CEO of InContext Solutions. “You can get a ton of people in a short period of time, and you can really isolate the one thing that you’re really concerned about and get both behavioral and attitudinal information from a large group of people.”

Gillespie says tests in real stores don’t just take a long time to vet, but results can also be skewed based on any number of outside factors, like store location or weather.

“We’re able to isolate the only thing that’s changing, which might be the menuboard,” he says. “When you’re trying to do testing in the real world, there’s so much noise around that data because there are so many things that could be changing.”

John Sperry, CEO of Mindshare Technologies, a customer feedback solutions provider, says today’s technology also gives operators the ability to provide corrective guidance to employees quickly to minimize the negative impact they might have on the thousands of customers coming in the door each month.

“One of the biggest struggles any quick-service manager has is the fact that he’s got a 200 or 300 percent turnover in a particular store. So they are constantly having new employees,” Sperry says. “The most important thing you can do is be sure when you have a new employee they know when they’re doing something right and when they’re doing something wrong.”

Like Capriotti’s, Wisconsin-based hamburger chain Culver’s uses guest receipts to encourage customer feedback. Culver’s implemented its feedback program, Guest Connect, using Mindshare Technologies’ software, last year.

At the bottom of Culver’s receipts is an invitation to complete a brief survey online or by phone. Customers who do receive a validation code for a free custard on their next visit. Jeff Bonner, vice president of operations and training for Culver’s, says the feedback can be used to commend team members for a job well done or to discuss opportunities for improvement.

“We look at it daily and determine actionable items and fix any problems,” he says. “We also have call-back requests. So an actionable item would be to, within 24 hours, call back a guest that had a poor experience and wanted to make it right. That’s very impressive to our guest, for somebody to call them back and utilize this information in real time.”

Responding to negative feedback immediately like this can improve the chances of retaining the customer. Sperry says that without modern methods for collecting customer feedback, many unsatisfied customers would be permanently lost.

“I think the big issue is that a lot of managers feel that, ‘I’m here all the time and customers can tell me a problem.’ But only one out of 10 customers that has a problem will tell the manager,” Sperry says. “What are you doing for the other nine customers who will literally walk out the door if you don’t have ways for them to sound off?”

Morris, whose Capriotti’s concept previously operated with limited feedback, says the customer feedback has helped boost the business at the sandwich company.

“We’ve gotten some unbelievable data,” he says. “We receive more than 50,000 responses per year. With that data, we have been able to make significant changes. We’ve been able to do things as easy as move menuboards around so that they are more readable. We’ve been able to increase the speed of service. We’ve been able to increase the taste of our product. Every store gets a log-on to their own particular data, and every day, in real time, the data that comes in can be viewed online.”

Logging on to Facebook or some other portal that gathers customer feedback every day might sound time-consuming for an already-busy operator, but the experts say it’s not. In fact, these types of technologies give operators control to gather and review data at their own pace.

“Some of our clients give only 15 minutes a week to our system,” Sperry says. “Some establishments escalate the actual alerts to a field level, where there is a dedicated group that handles callbacks so that there is not the distraction at the local store.”

Other operators take full advantage of the feedback to address customer issues within 24 hours. Sperry says it’s not uncommon for a store manager to respond to a customer’s complaint within 20 minutes. He says that the faster a manager responds to a customer, the more loyal that customer will be.

Kownacki confirms that time is of the essence with customers, and that operators will benefit from responding to negative feedback as quickly as possible.

“Quick service can mean less time in the restaurant, or in some cases a higher turnover of customers, so there isn’t always opportunity for the management to engage directly with customers about their experience and ensure quality,” he says. “Technology helps remove that gap of time or distance and provides an important avenue where the brand and the consumer can engage with one another about the experience, to the benefit of both parties.”

Sperry says that the most important thing for operators to remember is to not get bogged down in whatever technology tool they choose. He says some people tend to get caught up in fancy technological systems with more analytics tools than necessary.

“The most important thing is the fact that you’ve got a lot of turnover at your establishment,” he says. “You’re dealing with the problems of new employees when customers have problems. Go fix those. You’ll deliver a consistent product, and you’ll make money. It’s not as sexy as some of the heavy analytics, but it’s what makes a quick-service restaurant money.”