A call for satisfaction

Editor’s note: Gene Stefaniak is marketing research director of Long John Silver’s Restaurants, Inc., Lexington, Ky. ZR Silk Tasby is director of restaurant support at Long John Silver’s Restaurants, Inc. Bruce Westcott is executive vice president of Alliance Research, Inc., Crestview Hills, Ky.

“Our work to increase customer satisfaction levels, along with our co-branding and new Long John Silver’s activities, proves that our strategy isn’t just to bring ourselves up to regular fast-food standards. It’s to bring our facility and customer service systems to a level that’s above and beyond the quality of other fast-food restaurants.” – Kevin Armstrong, president, Long John Silver’s Restaurants, Inc.

The directive from the corner office at Long John Silver’s headquarters was clear and straightforward: develop a program that would elevate the customer experience, measure performance, reward excellence and build business. With essential management support, a cross-functional team was assembled for the task. This included restaurant operations, marketing research and information technology personnel at Long John Silver’s, and Alliance Research as consultant and vendor for the measurement program.

Long John Silver’s, a quick-service seafood chain based in Lexington, Ky., recognized the simple but key drivers of its future success:

  • A typical heavy user spends $8,500 at Long John Silver’s during their lifetime.
  • A light user’s lifetime spending at Long John Silver’s is nearly $2,000.
  • Growth means serving valued loyal patrons, and a host of new, first-time customers.
  • Satisfied customers compound their value through word-of-mouth interaction.
  • A satisfied customer becomes a repeat customer; repeat customers become heavier users.
  • Every customer encounter represents a chance to accrue or to forfeit substantial future equity in the business.

To be actionable, the program had to be store-specific and to reflect Long John Silver’s organizational and geographic responsibilities across the 1,250-restaurant chain. From a measurement standpoint, this dictated large-scale and cost-efficient data collection. The plan also had to recognize stand-alone stores as well as a growing number of A&W co-branded stores with a different product mix, as well as franchise restaurants with different, or even the absence of, supporting technology.

Reinforcing the program was an incentive bonus plan for the Long John Silver’s store management force structured to tie financial reward to high customer satisfaction performance and error-free customer experiences. With the organization geared to the new incentive bonus plan, the demand for a steady stream of detailed information was predictable. Surprising in the evolution of the program was just how quickly and thoroughly the management force became engaged in and committed to the program, and how dedicated they became to leveraging every available nugget of information to achieve their goals.

Evolution

Long John Silver’s began by undertaking a rigorous review process of alternative methods, research designs, application concepts and vendors, through which Crestview Hills, Ky.-based Alliance Research was selected as its program development partner.

At first, the measurement task was framed in terms of traditional CSM evaluation, identification of strengths and weakness, and general scorekeeping for the program. Alliance Research was charged with designing and administering the CSM component using Alliance’s interactive voice response (IVR) technology. Automated graphic reports were generated monthly at the restaurant level and in a “roll-up” hierarchy through Long John Silver’s operations management levels. This extended from the individual store manager to local market DMA (designated market area) managers through regional and division vice presidents up to system-wide evaluation.

As a pilot program was launched in 300 company restaurants, it became apparent that while the measurement aspect of the program was well received, restaurant managers and higher levels of Long John Silver’s management wanted more than a report card. The program needed to better isolate the exact source of problems, and to provide ways to intervene in the event of a poor customer experience. To maintain occasion timeliness, two important methods of solving problems had to be deployed:

1. A focus on dealing with product, service and facility problems at the point of delivery, drilling down to the problem source, and;

2. Exercising proactive service recovery with dissatisfied customers, and those expressing any defect in their experience.

The program was re-engineered to provide a broader spectrum of information and a sophisticated set of mechanisms to fuel and reward proactive improvement, while at the same time maintaining the integrity of the measurement component. The restructured program puts Long John Silver’s operations personnel at the “controls” of the customer experience by:

  • focusing on ongoing and systematically gathered feedback from customers;
  • providing managers with the tools to understand the specifics of a product or service defect;
  • providing immediate information about a defective customer experience, in order to intervene to recover the customer.

Importantly, reports are available on an instant real-time basis through a password-protected Web site hosted by Alliance Research. This allows for instantly generated e-mail notification of DMA managers and restaurant managers each time a customer reports an unsatisfactory experience or, conversely, one in which they were “delighted.”

The process

The resulting process uses a variety of technologies in tandem to achieve program goals.

Invitations to participate are issued to a cross-section of Long John Silver’s customers through a central point-of-sale (POS) receipt system in company-owned restaurants. The number of invitations printed is in direct proportion to the number of receipts issued on an nth-transaction basis. Franchisees either use a POS receipt system or issue printed cards with instructions for participating. Invitations are issued in English and in Spanish, and the IVR script gives the option of completing the interview in English or Spanish.

A customer PIN code is required to access a toll-free telephone number. The PIN identifies the restaurant where the purchase experience took place. Where receipts are programmed, a unique multi-digit code is created for each customer by encrypting the restaurant number and information about the transaction. For franchisees without central POS programming capabilities, the PIN gives a restaurant identification number.

The invitation asks customers to call a toll-free telephone number within 48 hours of the restaurant experience. The multi-digit code procedure assures that calls are timely because the transaction date and time are embedded in the PIN code.

As questions are asked by a pre-recorded voice, customers answer through the numbers on their touch-tone telephone. The information is captured in a continuously updated database that then dispatches e-mail notices to DMA managers and restaurant managers, and instantly updates all reports on the secure Web site. Long John Silver’s and franchisee personnel are issued secure passwords to the Web site to review automated graphic reports and a host of other information available for their restaurants.

To improve response rates, an incentive is offered. A word code is given at the end of the study. Customers record that word on their receipt invitation (or card) and present it at the restaurant to redeem their incentive on their next visit. The word code changes periodically.

Report components

The measurement and service recovery program has a number of important elements, all of which are triggered by customer comments in the survey:

  • Progress measurement. The “traditional” CSM report deliverable, shown in automated graphic representation, displays trends in each restaurant’s overall customer satisfaction and intent to revisit, and evaluation of facilities, and food and service delivery over time.
  • Benchmarking. All reports compare to measures for the prior period and to chain-wide measures, with tests of statistically significant differences.
  • Problem isolation. This component identifies problems and their sources in the customer experience through the use of follow-up “drill-down” questions. These questions are asked only if customers register a rating reflecting a defective experience.
  • Service recovery. In the IVR interview, customers opt in to agree to accept a call from a district manager if Long John Silver’s wishes to talk with them further about their experience. If the experience is poor, alerts are dispatched for customer follow-up and problem resolution. Prompt and earnest follow-up reinforces Long John Silver’s commitment to customer satisfaction. The Alliance Research database recognizes triggering events and gives immediate notification of unsatisfactory experiences by e-mail and Web site reporting through two channels:

1) RED Alert – Allows DMA managers to learn more about the problem and recapture the customer by notifying them of low overall satisfaction and providing them with the customer’s telephone number.

2) Manager Report – Notifies the restaurant manager of operational defects under the manager’s control and provides the customer’s telephone number, if needed, for further diagnosis and service recovery.

  • Monthly and quarterly summary reports. Through a secure reporting Web site, summary reports give continuously updated graphic information of all measures by individual restaurant, with line-item benchmarking comparisons to the prior period, as well as chain-wide performance on the same uniform measures. Also included are summaries of the proportion of customer occasions where RED Alerts or Manager Alerts have been issued, with detail of the problems encountered.
  • Roll-Up Reports – This element gives detailed and easy-to-read summaries of restaurant groupings rolling up to each market and to Long John Silver’s levels of management responsibility: DMA managers, regional vice president, division vice president and the Long John Silver’s chain in total. Access is secure to authorized personnel for restaurants within their jurisdiction only.
  • Celebration – This element immediately congratulates restaurant managers each time a customer reports a completely satisfactory and problem-free experience, reinforcing manager commitment to excellence and continuous improvement.

The results

In a matter of months, Long John Silver’s saw its customer service performance and manager involvement escalate. The concept stresses the manager’s top three tools for excellence as:

1. Leadership. Managers are reminded that when it comes to customer service, a restaurant’s team follows its manager’s lead.

2. Training. The first part of “excellence” is “excel” and, according to Long John Silver’s, that takes training. The importance of management is stressed through a key statement: “Each time the manager interacts with customers, a Service Excellence training session is in progress.”

“Just look behind you,” the company tells managers, “You’ll see your team noticing and eventually imitating your every action.”

3. Service management. Since customer-driven measurement gives a grade of sorts, Long John Silver’s tells managers to use it as a teaching tool. For example, a high number of dissatisfied customers means that managers are flirting with an “F,” and it’s time to hit the training and reinforcement books again.

Program expanded

The program has since been expanded to all company-owned stores, and is now offered to Long John Silver’s franchisees. With the support of this multi-directional program, Long John Silver’s has entered a period of growth and business success unprecedented in the company’s history. Here’s what a few Long John Silver’s managers have to say about the program:

“We’re so much better than our competition now that we’ve actually put them out of business. There are, or should I say there were, two other seafood QSRs [quick-service restaurants] in town. We put them both out of business. The reason? We serve a better product, and we treat our customers right!” - Scranton, Pa.

“We’re just nicer to our customers than most of the other restaurants around here. Their employees don’t care, and ours do. My customers come in and compliment me on my staff all of the time.” - Tyler, Texas

“It’s important to communicate with your guests if you want to be successful. Find out what you’re doing wrong and fix it, or find out what you’re doing right and keep doing it!” - Plano, Texas