Written by Emanuela Lertora
The bars and restaurants sector is often affected by new trends in terms of locations (emerging urban hotspots or new popular holiday destinations), types of cuisines (vegan, ethnic, free-from etc.), and by social media influencers and on-line reviews that can shift customers from one place to another, in a already challenging and congested market. Proactively engaging and remaining connected with customers is an effective way to develop and protect brand loyalty, and is the key differentiator for successful food and beverage commercial enterprises.
How bars and restaurants can stay in business? What works and what doesn’t
WORD OF MOUTH
Personal recommendations and on-line review are strongly influencing customers behaviour in terms of choosing the locations to dine-out, ordering a takeaway, drinking a coffee or meet-up with friends. While advertising might persuade consumers to try something new, it doesn’t seem to be effective as a long-term strategy. Positive reviews and recommendations through word-of-mouth are better tools to build brand loyalty. However, operators should keep in mind that poor reviews have a greater impact on the business than good reviews, therefore the key to success is to looking for ongoing opportunities to engage with customers.
Top-quality service is a key element in generating positive reviews. Eating out is as much about human interaction and personal experience as it is about food. In a sector characterised by high levels of staff turnover delivering a best-in-class customer service can be challenging, operators should focus on retaining, incentivise and training their employees to assure the deployment of good services best practices.
DEALS AND PROMOTIONS
Deals and promotions can help to attract customers keen to try new venues or a new type of cousin. However, once operators start offering deals to consumers they find it difficult to withdraw them without adversely affecting the business. While promotions are good in getting people through the door, don’t work as well in the long run. For this reason, more businesses are now moving to more customised incentive campaigns that offer instant gratification, such as on-the-spot discounts and offers.
With high levels of smartphone penetration, social media is playing a growing role as both an influencer and a tool for customer engagement. According to the Arab Social Media Report 2015, 88% of the Middle East’s online population uses social networking sites daily, with 5% of users spending more than 4 hours per session. Nearly two-thirds of regional social media users regularly use social networks to get recommendations on products and services. In order to keep the business successful, operators should find ways to bond and remain connected with their customer base by investing in social media capabilities, along with data and analytics, to gain consumer insight and promote their brand evolving digital economy.
A market research study conducted by KPMG found out that Michelin stars are not a major influencer for customers. Fine dining is seen as a choice for special occasions or for food connoisseurs, it’s basically a niche in the market feed by its own unique customers base.