With the advent of digital consumer technology, it’s easier than ever for retail and restaurant brands to collect customer satisfaction data through post-purchase surveys and other techniques. Many brands have taken advantage of this new capability to understand not only the quality of the customer’s experience, but also the reasons why a customer visits a location.
While customer satisfaction is an important driver of a brand’s growth and performance, it’s not the only factor that influences success. Ultimately, retail and restaurant executives need a holistic way to evaluate location performance to make the right unit-level investments.
In this blog post, we’ll provide three different scenarios to illustrate how you can get more out of your customer satisfaction data and better evaluate performance.
Scenario 1: High Customer Satisfaction, Low Sales
Imagine you have a location with high customer satisfaction scores, but low sales. The marketing campaigns you are running are producing strong results across the rest of the network. Competition in the trade area is average. Operations are running smoothly. Why are sales low?
The answer may lie in the types of consumers in the trade area. By combining your customer data with outside data sets to create a customer profile, you can identify who your brand’s best customers are and where consumers who share that profile are located. If a location doesn’t have the right concentrations of the right types of consumers, then it will struggle.
For locations in this situation, reassess your site placement and look for opportunities to relocate the unit to a better location.
Scenario 2: High Customer Satisfaction, High Core Customer Density, Low Sales
When a unit has high customer satisfaction scores, high concentrations of your brand’s core customers in the trade area, but low sales, it can be difficult to identify what’s causing sales to slump.
The low sales volume may be due to factors such as:
- Poor signage
- High competition in the trade area
- Low marketing budget
Locations with these factors are good candidates for household-level marketing campaigns directed to your brand’s best prospective customers. Using a highly targeted approach allows you to reduce the number of prospects you are targeting, which saves money, while increasing response rates and driving sales.
Scenario 3: Low Customer Satisfaction, High Sales
Occasionally, you may have locations that seem to defy the odds with strong sales but low customer satisfaction scores. If the customer satisfaction issue is not addressed, however, sales will begin to lag.
Employee engagement programs, training, and quality control are all important factors that contribute to customer satisfaction, but you should also consider the available labor pool in the area.
If a location is struggling with operations, but there aren’t enough of the right type of workers in the trade area to staff appropriately, then the unit will always have difficulty maintaining operational and customer satisfaction standards.
Consider studying the characteristics of your front-line work force. Before you select new locations, verify that the trade area has a sufficient labor pool to support the site.
The Bottom Line
While customer satisfaction data is a powerful tool, it doesn’t tell the complete story of a location’s performance. Combining your customer satisfaction data with other datasets can help you to design location-specific strategies to drive sales and improve profitability.
Learn more about how to improve your existing unit performance in our blog post, “Auditing Your Existing Portfolio of Stores: Do You Know Where You Stand Today?”