Why monitoring your reviews online matters?

It is something every restaurateur knows: good reviews boost takings while terrible ones can close you down. And, in an age when everyone can be an online critic, ratings have never been more important.

Work by two economists at the University of California, Michael Anderson and Jeremy Magruder, aimed to measure the relationship between online star ratings and customers’ purchasing decisions.

They found that a restaurant with a rating improved by just half a star (on a scale of 1 to 5) was much more likely to be full at peak dining times.

 

This was further backed up by Michael Luca, who published research in 2016, and found that a one-star increase in Yelp rating leads to a 5–9 percent increase in revenue.

Importantly, the two economists found that the increase in trade happened without any change in prices or the quality of food and service, confirming that it was the reviews that brought in the new customers.

The economists conceded that, while restaurants with strong reviews on the site did better business than poorly reviewed restaurants, establishing cause and effect was difficult.

“After all, restaurants that get good reviews are those that appeal to consumers and they would probably do well even in the absence of any reviews,” the pair write. However, they are confident the research is robust. They note that, when Yelp computes a business’s average rating (which ranges from 1 to 5 stars), it rounds off to the nearest half-star.

 

So, two restaurants that have similar average ratings can actually appear to be of very different quality to online viewers. For example, a restaurant with an average rating of 3.74 displays a 3.5-star average rating, while a restaurant with an average rating of 3.76 displays a 4-star average rating.

This, the economists claim, allows them to make important comparisons between restaurants that have different ratings — for example, 4 stars versus 3.5 stars — but are of nearly identical quality (for example, a 3.76 average versus a 3.74 average). Their conclusion? That half a star makes all the difference.

Furthermore, they found that the effect was more profound when alternative information was hard to come by, opening up the possibility that invented reviews could boost fortunes.

The pair write: “These returns suggest that restaurateurs face incentives to leave fake reviews, but a rich set of robustness checks confirm that restaurants do not manipulate ratings in a confounding, discontinuous manner.”

So what can you do about it?

We believe that there are 4 key steps to turning around social media performance.

  1. Inspect the data
  2. Incentivise your staff
  3. Be proactive and respond
  4. Address root causes

Inspect the data

To quote Louis Gerstner, ex-CEO of IBM :

“You don’t get what you expect, you get what you inspect”

… and the same is definitely true of social media scores.

Can you answer the following questions:

  • Which was my top performing store on social media this month?
  • How many likes do I get for an average post on Facebook and how did this month compare?
  • Do I have any critical reviews outstanding that I need to respond to?

If you can’t answer them within a minute or two — you need to work on your tools. Whether you invest in a solution to aggregate reviews for you, or have someone collate a regular report — you need to understand this data in some detail.

Incentivise your staff

Just making sure managers are aware of social media reviews will help — but there’s nothing quite like making social media scores part of an employee scorecard to help drive positive reviews. We’ve seen customers include an average review metric as 10% of a balanced scorecard impacting bonus at the end of each month. Of course, go to far and you could start seeing odd behaviours — an employee may push customers to make reviews — so use in moderation.

You can also run competitions, or have a “mention of the week” type award to rewards one-off performance.

Lastly, it’s important to role model the behaviors you want to see — make social media scores a topic at team meetings, and an important part of the day to day.

Be proactive and respond

 

Don’t just let negative reviews sit there — make sure you’re responding to them, and trying to remedy the situation. Customers are looking at the responses and well, and want to see an engaged restaurant.

Best in class restaurants can respond within a couple of hours — and it shows you’re thinking customer first. It’ll also help you get closer to the pulse of customer feedback.

Address root causes

Of course, you also need to listen to the content of customer feedback. Not all of it can be fixed with a staff incentive or by listening more closely.

Example of structural issues may be things like poor menu selection for vegetarians, or long wait times on certain days. Each of these comes with an obvious action that you can then decide to make if the reviews persist. Listening closely will help give you this feedback.

If you’d like to see how Tenzo can help you power all of the above — please get in touch for a demo.

Identifying insights – Areas data will give your business competitive advantage

Data is a gold mine of insights, which can dramatically add value to your business across the board and give a significant competitive advantage. But how is it that most businesses fail to use their own data (sales, reviews, etc) and miss out on the opportunity to gain insights, make better decisions and ultimately grow?

The aim of this article is to show you that clear data will always triumph over ‘gut’ led decision making. Businesses that use their data properly will always have a competitive edge as they can react faster, forecast better and gain real insight about their business activity.

Here are four benefits of using data in your business.

  1. Use social data to increase sales
 

Did you know that one star social media rating has been shown to drive 7% of additional revenue? By continuously monitoring the data from customer reviews on social sites like Yelp, Google Places, Facebook, Tripadvisor, getting alerted of bad reviews and reacting quickly, you will have a direct impact on sales.

Furthermore, focus on using your social data to raise your customer loyalty and engage more new customers instantly.

2. Use data to reduce your COGS

Data can add value by helping you accurately forecast your future sales. By analysing many factors such as weather, events and past sales performance it is possible to get an accurate forecast which in turn can help you adjust staffing levels, optimise opening hours and reduce wastage.

3. Data will highlight your top staff performers

In hospitality, there is a massive variability in staff performance — 150% variability in check size dependent on employee and a staggering 800% in speed of service. Analysing transactional data can help identify the top performers, ensuring that the best staff are scheduled at the right place at the right time.

4. Data will train better staff

By showing your front line team members data on average customer spend and speed of service you can train staff to perform to a higher level. Data analytics can help you give employees real time feedback on their performance. Furthermore, incentivising staff to outperform the benchmark, will increase sales.

In conclusion, the more data you collect from customers, from your sales and from your employees, the more actionable insights you will receive, which will significantly add value to your business. Developing a data analytics capability by using the best tools such as Tenzo is essential.

Tenzo is a platform that gives hospitality and retail businesses actionable insights from their real time data.