Restaurant rivalries: Which coffee, Mexican food, and burger brands keep customers happy?

Will you get the better breakfast at Starbucks or Dunkin’? Does Chipotle or Taco Bell have higher quality Mexican food? Which burger joint has the fastest service?

While the ACSI can never answer these questions definitively, we can tell you what customers think about everything from food quality to store speed to mobile ordering.

When we look at scores for some of the biggest restaurant rivalries in the business, we get a new perspective on what’s working and where these brands could focus their efforts to improve customer satisfaction.

Starbucks vs. Dunkin: Top coffee brands face off on food

Last year, Starbucks and Dunkin’ were dead even in their overall ACSI customer satisfaction scores. This year, Starbucks inched up 1% to take the lead, 79 to 78.

In terms of beverage quality, Starbucks and Dunkin’ tie, but Starbucks has a slight lead in the variety of beverages. Where things get interesting is in the food. Both restaurants have been putting more resources behind their food offerings.

At its annual shareholders meeting in 2018, Starbucks revealed its intention to double its food business by 2021. Dunkin’ recently beefed up its breakfast options, debuting a new Egg White Bowl and Sausage Scramble Bowl to compete with the likes of McDonald’s, Taco Bell, and Panera, not to mention Starbucks.

Starbucks has a small advantage over Dunkin’ on food quality according to customers, but customers give Dunkin’ better marks for variety of food as it edges out Starbucks. These results aren’t in the same echelon as the two brands’ drinks, but it will be interesting to see how the scores evolve as both brands continue to expand and enhance their food menus.

One area where both are especially strong is mobile. Starbucks stands out for the quality of its mobile app, while Dunkin’ is close behind. Customers also give Starbucks higher marks for the reliability of its mobile app compared to Dunkin’.

Chipotle vs. Taco Bell: Digital and delivery from top Mexican food chains

Chipotle’s overall ACSI score plummeted in 2016 following its food safety crisis, and still hasn’t returned to its pre-crisis score, but it has shown incremental improvement, rising 1% this year to a respectable score of 80. Its same-store sales are also improving, up 10% in the first quarter of 2019. Taco Bell now sits at 75 after a 1% gain of its own.

Despite its struggle to return to its pre-crisis ACSI score, Chipotle still outstrips Taco Bell in food quality. And while Taco Bell has a strong showing in order accuracy, Chipotle again ranks higher.

Both restaurants are moving quickly to cater to a new generation of mobile-first customers seeking convenience. Both brands have launched delivery options — Taco Bell through GrubHub, Chipotle through DoorDash — and are ramping up digital operations.

But when rating mobile apps, Chipotle again is the clear winner, scoring high for both the quality and reliability of its mobile app, with Taco Bell lagging behind in both categories.

Wendy’s, Burger King, Red Robin, or McDonald’s: Who has the fastest fast-food burger?

Red Robin, in the full-service restaurant category, has the highest overall ACSI score among the four burger restaurants at 79. Among fast-food chains, Wendy’s leads with a score of 77, followed by Burger King at 76. McDonald’s sits at the bottom of all fast-food restaurants at 69.

When it comes to courtesy, the scores tell a similar story. One thing you don’t often see in the service industry is high scores for courtesy. But these burger joints are serving up a different trend.

Red Robin scores high for courtesy, followed by Wendy’s and Burger King close behind with respectable scores of their own. McDonald’s, however, lags the field in a distant fourth place.

McDonald’s has been trying to modernize its operations, adding self-order kiosks, digital menu boards, and curbside pick-up for mobile orders. So far those efforts haven’t improved its overall ACSI score, but did it do anything to improve its speed in fulfilling orders?

Not according to customers. McDonald’s scored well below the category average for speed of checkout or delivery. The fastest burger is from Wendy’s, but Burger King and Red Robin are close behind. Unlike the standout courtesy scores, the store speed for all four burger chains is pretty low across the board.

Does competition bring out the best of the brands?

Every one of these restaurants is making moves to improve and expand their menus, better cater to changing consumer tastes, and advance their mobile technology and delivery capabilities to serve customers the way they prefer to order and receive their food.

While brand rivals certainly fuel the strategy to some degree, restaurants should also make sure they’re listening closely to their customers, who are ultimately the only judge that matters in the competitive restaurant industry.

What franchises need to know about managing customer satisfaction

Franchises allow entrepreneurs to try their hand at business ownership while gaining the huge advantage of working off a proven brand and operating model. But it’s not always smooth sailing. Sometimes the lines of business are blurred and miscommunication about who is responsible for what can lead to customer satisfaction issues.

Just like individual store locations are part of a bigger corporate entity, franchises are responsible for maintaining their own guidelines while adhering to a certain overarching standard by the franchisor.

In this post, we break down some of the most frequently asked questions and share high-level observations about how you can maintain — and improve — satisfaction in a franchise environment.

Q: In a franchise system, who is responsible for managing customer satisfaction? Is it the responsibility of the franchisee or the franchisor (or both)?

A: It’s both. Ultimately the franchisee needs to be successful, but guidance comes from above. Franchisees must adhere to corporate guidelines that can’t be changed, such as signage and regulations, but can still be thought of as individual storefronts within a larger system. While the franchise model is technically different than a store brand model, the customer satisfaction aspects are no different for a store that isn’t franchised. There’s still a manager for each location, and they’re still responsible for profits, services, employee training, etc.

The model isn’t influencing customer satisfaction — whether you’re in a corporate environment like Home Depot or a franchisee like McDonald’s, it’s the same kind of things that create a satisfying experience.  

Q: Should the franchisor assist franchisees with satisfaction, particularly in local markets? If so, how?  

A: The franchisor should provide standard best practices and procedures required of all franchisees to ensure an enjoyable experience. It’s also recommended that franchisors share guidelines that ensure uniformity in the quality of experiences. For example, Chick-fil-A is really controlling, right down to its waffle fries, which need to look and taste exactly the same to all customers.

While the franchise may be “local,” it still has to adhere to national standards.

Q: How can the franchisor incentivize franchisees to improve satisfaction?

A: Customer satisfaction should be incentive enough. As the ACSI has found across all industries, higher customer satisfaction leads to higher profits. However, there wouldn’t be anything wrong with incentivizing customer satisfaction even more.

Q: Could low satisfaction with individual franchises impact the brand’s reputation or satisfaction, and vice versa?

A: It’s likely the reputation of one franchise location would be too small to impact the overall brand. Isolated customer incidents, like food poisoning at one location, most likely won’t impact customer satisfaction on a larger scale — at least in terms of ACSI — because not enough customers would’ve directly experienced the issue.

Individual locations might influence satisfaction if the incident is substantial enough or spans across multiple locations. For example, numerous Chipotle locations served tainted pork that made their customers sick, and we did see this impact satisfaction across the board.

Q: How do franchises ensure uniform and consistent satisfaction? Do they need to cater to certain geographic preferences, or are there other ways to stand out while still ensuring brand standards are in place?

A: It makes business sense for a franchisor to look at the customer satisfaction of their franchisees. Corporate could perform detailed surveying based on objective measurement for every location to identify the top performers and then pull best practices out of that location as a model for all others. The same could be done for the bottom performers to identify harmful practices and share those within the system.

There are differences in customer satisfaction based on geography, so surveys could reveal even more about regional discrepancies and tastes.

Q: Should franchisors have uniform satisfaction measurement tools across locations? How else can they ensure consistency?

A: Franchisors should absolutely set the standard for satisfaction. The key is to establish criteria like courtesy of staff, food quality, cleanliness, accuracy of orders, etc. and then implement the metrics across all franchises. This will help franchisors benchmark, identify best-in-class performers to be emulated, and identify under-performers to target for specific improvement strategies. Measurement should ideally occur monthly, but at the very least quarterly.  

Furthermore, it’s advisable for franchisors to not only measure, but also enforce customer satisfaction best practices. There needs to be a way to ensure consistency of brand standards across all franchisees. One way to ensure consistency might be to revoke a franchise if they aren’t consistent with standards, or at least give them a warning and step in to evaluate what could be improved. There’s also the option to take additional disciplinary action, like a fine, if there are multiple infractions.

Q: Does customer satisfaction among franchises differ across industries? For example, retail franchises vs. restaurant franchises?

A: There are always nuances in satisfaction from industry to industry, but overall there are some key observations that ring true for most organizations. The major franchise industries are hotels and fast food restaurants, so that helps narrow down the demographics a bit.

Q: What’s the number one thing franchises need to keep in mind regarding customer satisfaction?

A: Like any company, franchises need to focus on employee satisfaction. Customers will have the same expectations at each franchise location, so franchisees need to be prepared to satisfy them — and employees are on the front lines, so they need to be adequately trained and supported. Happier employees tend to result in happier customers, which means better bottom lines.

Q: Can you give an example of a franchise system and how customer satisfaction is impacted across multiple locations?

A: Take Papa Johns, for example. One thing to consider is that any challenges with corporate or the brand don’t necessarily impact customer satisfaction ratings; that doesn’t change the pizza quality, and that’s what matters more to customers.

Ultimately, customers aren’t aware of whether they’re being served by a franchise or a corporate branch, nor do they really care. It’s important for any business to create a uniform, pleasing experience to meet the customer’s expectations.

 

Every location and person representing the brand — whether at the franchisor or the franchisee level — is responsible for maintaining a certain set of standards to ensure customers are happy with the service.

If you’re a franchise interested in understanding more about these satisfaction nuances or how you can improve customer service among your franchised locations, please reach out to Tina Dettloff at tdettloff(at)theacsi(dot)org.

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How wireless carriers can save 25% of their lost revenue by improving customer satisfaction

For the first time, as we noted in our inaugural Wireless Service and Cellular Telephone report, we posed the following question to consumers: “How much do you spend, on average, each month for your wireless service?”

A simple question, really. However, when analyzed alongside customer satisfaction and customer retention data, we gain an entirely new perspective on just how much customer satisfaction can impact wireless carrier revenue. This new Customer Segment Value (CSV) model speaks volumes.

Our study breaks consumer spending on wireless phone services into nine different segments:

  • $1-$25
  • $26-$50
  • $51-$75
  • $76-$100
  • $101-$150
  • $151-$200
  • $201-$250
  • $251-$500
  • $501 and above

The model used to analyze this data enables us to differentiate customer groups based on how much each spends on wireless services, as well as the differences in customer satisfaction and customer loyalty. This information, plus sample proportions for each group, gives carriers insight into which customer segments will likely generate (or save) the most revenue with increased customer satisfaction, and where service improvements will most move the needle for those customers.

Here’s what we discovered.

Which wireless customers are more satisfied and more loyal?

Data from the different CSV groups shouldn’t be expected to perfectly reflect actual spend segment proportions for a company, but it does give us a better understanding of what customers in this sample look like from a spending standpoint.

We discovered that, at the industry level, more than 25% of customers fall in the $26-$50 spend range and 55% spend between $1 and $75 on their wireless bill each month. However, under 10% of respondents spend between $201 and $500 monthly, and just 1% spend more than $500 per month (thereby limiting our ability to analyze this data completely).

The data also identifies the leaders and laggards in ACSI and retention across the CSV groups. The “lower spend” segments – $1 to $75 – are more satisfied, more loyal, and have lower churn rates than almost all other groups, with only the very highest spending customers – the tiny proportion of those spending more than $500 each month – experiencing higher churn. For customers spending more than $76 per month but less than $500, ACSI scores and retention rates drop considerably.

The most valuable wireless customers

We then multiply the monthly annual per-customer spend by the number of customers in each CSV group to find the revenue and relative contribution to total revenue for each segment in the sample. If you’re familiar with the 80-20 rule, you won’t be surprised by the results.

The $1-$25 group accounts for nearly 15% of the total customers, yet only contribute 2% to overall revenue. Meanwhile, the $251-$500 group consists of under 5% of the respondents but contributes more than 17% to total revenue. Based on both its sample size and mean customer spend, the $101-$150 segment, which accounts for a little less than 14% of the total customers, contributes the most to the total annual revenue at a little under 19%.

The customer segment responsible for the biggest revenue losses

We then use our churn rate estimate and the per-customer spend estimate for each segment to estimate how much potential revenue carriers lose each year.

Due to its high spend, low ACSI score, and high churn rate, over 20% of potential revenue is being lost from the $251-$500 segment. The $101-$150 group is also losing almost 19% of potential revenue.

As it were, close to 70% of the total revenue lost each year is among customers spending $101 or more per month.

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Targeting the top to save 25% of revenue

According to this study, companies can “save” the most revenue lost due to customer defection each year with a five-point improvement to ACSI for the $251-$500 segment – close to 25%. One idea to increase satisfaction: Carriers could provide these customers with a wider variety of plan options, something that’s clearly lacking based on our data.

The same five-point improvement for the $101-$150 spend segment would provide just under 23% in revenue saved, the second largest in annual savings.

There’s more where that came from…

This study focuses on the wireless industry as a whole. However, the CSV model can be used more specifically, and can provide the data for more complex types of Customer Lifetime Value (CLV) modeling.

With this information on spending, companies can better target not only which groups are more or less satisfied and loyal, but also understand which groups are most important to focus on to improve satisfaction and loyalty in a way that will most likely yield the biggest economic return.