Title: The Sole Proprietor, an upscale seafood restaurant in Worcester, Ma, sought innovative methods to enhance and track customer loyalty. Research suggests that incentive based customer loyalty programs are an innovative and successful tool for such
1Understanding and Improving Customer Loyalty at
The Sole Proprietor Kimberly Ramsdell
(Management), Eric Ruscitti (Management),
Advisor Professor Michael B. Elmes
Methods/Process
The Sole Proprietor, an upscale seafood
restaurant in Worcester, Ma, sought innovative
methods to enhance and track customer loyalty.
Research suggests that incentive based customer
loyalty programs are an innovative and successful
tool for such customer-relationship-management
initiatives. Two focus group sessions and an
electronic survey with a sample of The Sole
Proprietors customers suggest that a
well-managed loyalty program would facilitate
increased guest loyalty.
Results/Outcomes
Abstract
- Research uncovered the new concept of customer
loyalty programs for restaurants. A study in
2004, showed that 50 of table-service customers
would be more likely to patronize a restaurant
that had a loyalty program1. Therefore, we tested
whether the same was true for customers of The
Sole Proprietor. - Three methods were used to gather customer
opinions regarding satisfaction, loyalty, and
specifically, a loyalty program for The Sole
Proprietor - Focus group with loyal customers
- Focus group with satisfied but not loyal
customers - Electronic survey of all customers
- The electronic survey was used to capture
substantial amounts of data in a short time while
also filtering results into a database making
analysis more efficient. Focus groups were used
to generate a conversation since the electronic
survey can be limiting since it is not a two-way
discussion. - Results from the focus group and electronic
survey were analyzed using quantitative as well
as qualitative techniques to
capture key themes from the responses.
- Loyalists are twice as likely to provide
enthusiastic referrals and to agree that The Sole
Proprietor sets the standard for excellence - Only 4 of respondents are loyalists compared to
25 defectors - By transitioning defectors to loyalists, the
restaurant will have more repeat visits,
increased referrals, and very satisfied customers - Over 90 of loyalists and defectors would join a
loyalty program at The Sole Proprietor - Incentives of interest include free items,
discounts/coupons, preferred seating and special
members only events
The Sole Proprietor is a top-tier seafood
restaurant located in Worcester, Massachusetts.
The owners are always seeking innovative and
unique tools to help compete in the growing
restaurant industry. In the years between 2002
and 2004, the number of restaurants in the United
States increased by 14,0001. Such a variety of
restaurant selections has caused restaurant
owners and managers to seek new ways to
anticipate customer behavior and create a loyal
customer base.
Background
Conclusions/Recommendations
- Innovative Solution
- Implement Clever Returns vendor operated loyalty
program - Program utilizes automated system of email or
post mail communications with members - Rewards are automated and members can track using
a members website - Restaurant can track ROI and other measures with
customized reports - Other Solutions
- Create a larger waiting area away from already
seated guests - Offer drinks and appetizers to waiting guests
- Email updates on new specials
- Raffle contests
- 177 respondents answered rewards/ coupons/
discounts would increase their loyalty
- Project Goals/Objectives
- Primary
- Understand what makes customers loyal
- Determine of loyal customers
- Seek innovative techniques for tracking loyalty
- Understand difference between satisfaction and
loyalty - Implement methods to improve loyalty
- Secondary
- Capture guests overall opinion of restaurant
- Further analysis showed that there are 2 customer
segments of interest loyalists and defectors - Loyalists are members of focus group one and
others that answered Very Satisfied and visit
8-11 times/3mo - Defectors are members of focus group 2 and 25 of
survey respondents that answered Satisfied and
visit 0-7 times/3mo
Acknowledgments Madeleine Ahlquist, Robb Ahlquist
(Owners) Michael Donovan (Marketing
Specialist) Kevin Hunt (General Manager) Dave
Anderson (WPI CS Student)
References
Hobler, Randolph. "Late to the Table Restaurant
chains lack loyalty programs." June 15, 2006.