Web Exclusive | August 2010 | By Jordan Melnick

Local Heroes Top Golden Arches

In a recent survey, local brands, fast casuals, and (of course) Chick-fil-A rank at the top of consumer satisfaction list.

Chick-fil-A, Chipotle, and Panera Bread rank among the best quick serves in the country in customer satisfaction, according to a study J.D. Power and Associates released on Tuesday.

The 2010 U.S. Restaurant Satisfaction Study evaluated consumer responses to an online survey that measured four aspects of customer satisfaction: price, environment (ambiance, cleanliness, convenience of location/hours), meal (quality/taste of food, meal presentation, portion size), and service (speed, wait staff courtesy/friendliness). 

“These are the four major axes,” says Jim Howland, senior director of the hospitality practice at J.D. Power and Associates, a marketing information services firm based in Westlake Village, California.

The study focused on 10 large markets, and restaurants received first-, second-, and third-place rankings based on their overall score out of 1,000 points. The average in the quick-service sector was 700 points.

Chick-fil-A got the most first-place rankings, topping the list in three markets: Houston, Atlanta, and Washington, D.C. It also placed second in the Los Angeles market. 

Chipotle placed in eight of the 10 markets, by far the most of any other restaurant. It ranked first in the Boston and Phoenix markets and second in the Chicago, San Francisco, Phoenix, and Minneapolis-St. Paul markets.

Chipotle spokesman Chris Arnold credits the company’s service model, which features several points of interaction between customers and employees, for its good showing in the study.

“When you order at a Chipotle, you’re in contact with a lot of people,” he says. “It’s an experience where customers are very involved, and that creates more of an opportunity to make an impression.”

The Denver-based chain was one of four Mexican grill concepts to place in the study. The others were Qdoba, Rubio’s, and Baja Fresh. 

Panera Bread took first place in the New York/Northern New Jersey market and also placed in Boston and Washington, D.C.

Not surprisingly, the study found that price was the most significant determinant of customer satisfaction in the quick-service sector. But service and environment combined were as important as price, indicating that even in a bad economy, consumers are looking for more than a good deal.

“You can’t think, ‘Well, if I focus on price, I can let these other things slide,” Howland says. “You still have to focus on environment and service, bearing in mind that in tough economic times, people are looking for value.”

While customers gave the country’s largest brands relatively low satisfaction scores, they gave high marks to the “local heroes.”

What is surprising about the study results is not the companies that scored high for customer satisfaction but the companies that didn’t place in any market. These included some of the biggest names in the industry: McDonald’s, Subway, Burger King, and Wendy’s. In fact, of the top 10 quick serves in terms of 2009 sales, Sonic was the only company to rank in any of the surveyed markets.

While customers gave the country’s largest brands relatively low satisfaction scores, they gave high marks to what Howland calls the “local heroes.” Chick-fil-A, for example, topped the list in Atlanta, where the company opened its first location in 1967. 

California-based In-N-Out Burger, meanwhile, took first place in the Los Angeles and San Francisco markets.

“A company like McDonald’s is large and plays all over, but there was opportunity for these smaller, more regional players to excel in their local areas,” Howland says. “There’s a loyalty aspect to it.”

Conversely, Howland says, companies that did well in their hometown markets may not enjoy a good reputation across the country like McDonald’s does.

“There seems to be a regional aspect to some of that loyalty,” Howland says. “It may not extend to other areas. You know, if In-N-Out Burger went to Atlanta tomorrow, it would have to generate some awareness.”

The study’s results drive home the industry’s guiding principles: Customers expect good food, competent servers, and a pleasant environment—all at a good price.  

“The takeaway is you really have to focus on all of these core things,” Howland says. “You can’t just put all of your eggs in one basket.”

Besides evaluating customer satisfaction, the study also found that half of the quick-service customers surveyed order the same meal each time they visit a restaurant chain. That compares to about 30 percent for family- and casual-restaurant customers. Just more than 40 percent purchased combo meals offered by the restaurant chain during a recent visit.

The study also analyzed social media conversations about quick serves in different demographic groups. The results show that teens (ages 14–18) and early careerists (22–29) discuss the convenience of these establishments more than Gen Y moms, who tend to focus on quality. The discussion among Gen X and Boomers “centers around providing themselves and their families with a treat or reward by visiting a quick-service restaurant,” according to the study press release. 

While McDonald’s did not lead any market in customer satisfaction, it is nonetheless a hot topic on the blogosphere.

“Among all five demographic groups, McDonald’s is the quick-service restaurant chain that garners the greatest volumes of online discussion,” the release said.

This sort of “tribe analysis,” Howland says, can help restaurants that are trying to capture a certain elusive market segment. 

“If you know that Gen X moms is a category you want to be speaking to with a particular product or offering, then an ability to pull that group out of the data and see what they’re saying can be very useful,” he says.

To view the quick-serve rankings in each of the 10 markets included in the study, click here.