What’s the number one factor people use to choose a restaurant? Food, price, location? Nope, restaurants miss this all the time. With focus on the economy right now, it’s tempting to manipulate prices to get, or keep business. But if price were the main concern in food choice, everyone would be eating from the value menu at Taco Bell.
 |
| Photo credit: Rick Audet |
Choosing a Restaurant: The Facts
In the November 2007 Issue of Harvard Business Review, Richard D’Aveni presented the facts in Mapping Your Competitive Position (pay to download). The facts are these: 73% of price variation in restaurants is driven by the customer experience. D’Aveni defines a restaurant customer experience as “a combination of decor, taste of food, and service.”
Even more startling was that cuisine accounted for just 3.5% of price variation and location for only 2.5%. What about prices and restaurant choice? D’Aveni did a study of reviews in the Zagat restaurant guide and found that the lowest ratings fell on lower-tier priced restaurants. While these numbers are not definitive, they are indicative of what drives a restaurant choice. Let me illustrate with a personal story.
Choosing A Restaurant Experience
I recently dropped by a local Japanese hibachi-grill restaurant to make reservations for a party of four (I was in the neighborhood). Three teenage girls engaged in some heavy texting occupied the hostess stand. One of the teens informed me that they do not accept reservations for parties of four. Why? Well, it’s inconvenient for them. They seat a minimum of six at the hibachi grill. The teens tell me that I can come tomorrow evening at 8 or after and that the wait probably will not be too long.
One block away is a competing Japanese steak house, so I decide to check it out. Our party really wants the hibachi-grill experience. It’s a smaller, more intimate place. Decorated a little hokey, but at least they’ve made an effort. A lady approaches me and asks if she can help. Her English is imperfect. She has trouble speaking, but not understanding. I decide I like this, it seems more authentic. She gladly accepts my reservation and writes my name in the book. Yes, part of the decision was convenience, but it was combined with an expectation of experience.
The Most Popular Restaurant in Town
The most popular restaurant in Waco, Texas is George’s. In this video on branding, Owner Sammy Citrano describes George’s as “a neat little old place.” His secret to success is “keeping the focus on being a fun place.” George’s is most famous for being “Home of the Big O,” an 18 ounce frosty mug of cold beer. Notice that Sammy does not mention price one time in the video. In fact, people like to go to George’s to have, as Sammy says, “a big ol’ time.“
Yes, it’s tempting right now to focus on price. However, if people’s main concern really is to save money on food, they will choose to stay home and eat. Customers that are concerned about the economy and still choose to go out? They want to forget the economy for an evening. So don’t remind them by placing emphasis on your prices.
Instead, try something different than your competitors. Don’t lower the prices. Raise the experience and become the most popular restaurant in town.
More resources on the customer experience:
Marketing Basics: The Customer Experience
Find the right benefit and raise your price
Zingerman’s And The Customer Experience
For updates on new articles: Receive The Marketing Spot by Email or 
Get The Marketing Spot in a blog reader