CustomersCount
BY JACK MACKEY
Data Delivers!
Rockets, dogs, mommas, and
gorillas in the mix
What changed last month in sales, costs, market share, and customer satisfaction? Data answers those questions for you. Data gives you history. But there is a higher level of business intelligence that answers questions such as: Why is this happening? or
What will happen next?
Insight—and foresight—spring from using data, statistical
analysis, and predictive modeling to understand why things are
happening and what will happen if current trends continue. Let
me share three powerful discoveries made by different franchise
concepts that improved their future.
items are the Projects (for product improvement). Because of their
high profitability, it is worth some serious effort to figure out how
to improve the taste and customer satisfaction with these items.
• Low profitability with high customer satisfaction: These
Opportunities have a different kind of potential. Can the price
be raised? Or is this item purposely designed to be a loss leader?
These items may be building traffic for high-profit bar drinks
and also qualify for heavy promotion.
• Low profitability with low customer satisfaction: These
are the Dogs. Shoot them. Take them off the menu.
The new menu strategy significantly improved sales, profitability, and customer loyalty.
#1: Ain’t no one happy if Momma ain’t!
Franchisees who operated portrait studios wanted to know which
customer segment was the most profitable and most likely to be
loyal. The franchisor included a number of demographic questions at the end of their customer satisfaction survey to gain information about age, employment, family
size, and ethnicity. This information was
linked to the transaction amount from the
POS system to determine the characteristics of the highest-spending customers.
This high-spending group was further
classified according to their ratings on
“Overall Satisfaction,” “Speed of Service,”
and “Selection of Products.” The segment
that was high spending and also highly
satisfied was expected to return often
and to spend more than other customers.
PROFITABILITY
DOGS
PROJECTS
In this case, Hispanic women with
full-time jobs and three or more children
were the highest spenders and the biggest
fans of the portrait studio… if these moms were happy (highly
satisfied). Armed with this business intelligence, the franchisor
developed marketing plans to help franchisees attract more of
these high-spending, highly loyal customers. That turned out to
be exactly the right move, and traffic soared.
#3: Finding the gorilla in the data
One casual dining franchise had low scores on “Overall Atmosphere.” To understand why, analysts selected verbatim customer comments from all surveys with below-average scores
in this category. Using text analysis, key words such as “Noise,”
“Cleanliness,” and “Crowded” were identified. Noise was mentioned most often by guests who gave below-average scores on
Overall Atmosphere.
The franchise also found that most guests associated noise
with the music being too loud. This was an eye-opening discovery because the senior management team had recently
instructed managers to turn up the music volume to give the
restaurant a more energetic feeling! When
the restaurant was crowded, managers
turned up the music so it could be heard.
But as the crowd thinned and ambient
noise was reduced, the remaining guests
experienced blaring music that annoyed
rather than energized them. The solution: the restaurant installed equipment
that sensed the ambient noise in the restaurant and automatically moderated the
music volume.
The text analysis revealed that the second-highest correlation was between noise and
“Family/Kids Being Too Loud.” As it happened, the restaurant had a special Kids Eat
Free promotion. They were deliberately building incremental
traffic without realizing the very negative impact on their core
client base. They quickly cancelled this promotion.
The company’s leaders learned the root causes of their Overall Atmosphere problems through text analysis of real customer
comments. They were able to make corrective decisions and take
effective action quickly—based on facts rather than gut instinct.
When big discoveries are made through analysis, it’s called finding the gorilla in the data.
These are just three examples. Leading franchise systems
drive hundreds of better business decisions by analyzing customer data. Check with your franchisor to see what customer
analysis they have.
ROCKETS
OPPORTUNITIES
CUSTOMER SATISFACTION
#2: Shoot the dogs and ride the rockets
One full-service restaurant concept needed to re-engineer their
menu to offer healthy choice alternatives. This meant adding
and removing items from the menu. By using profitability and
customer scores on “Taste of Food” to analyze each menu item,
a matrix with four quadrants was created:
• High profitability with high customer satisfaction: These
menu items are the Rockets. They make the most money and
create the most customer preference for the restaurant. Customers love these items, meaning the company gains repeat business and positive word of mouth that will drive future business.
Franchisees were guided to promote these heavily!
• High profitability with low customer satisfaction: These
SMG Vice President Jack Mackey helps multi-unit
operators improve customer loyalty and drive growth.
To request “Want Better Insights from Text Analytics?
Start by Eliciting Better Comments,” contact him at
816-448-4556 or jmackey@smg.com.
