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

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Understanding 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

• Results/Outcomes

• 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.