More than 110,000 restaurants — an estimated 17% of the US total — closed over the past year as a result of the COVID-19 pandemic. Those that survived had to get creative, adapting rapidly to lockdowns, capacity restrictions, supply chain disruptions and staff shortages. Now, declining COVID-19 cases and expanding vaccination efforts offer a glimmer of hope for the industry’s comeback.
However, even after most people have been vaccinated, COVID-19 and its consequences will remain with us. According to a Nielsen survey, nearly one-quarter of people say they’ll spend less at restaurants in the future, both because of lingering fears over the virus and because the pandemic dramatically changed consumer behavior. For restaurants, this means that the changes required to survive the pandemic were just the beginning of a broader shift.
To attract diners and remain competitive in the post-pandemic world, restaurants need to focus on the three basic elements that customers care most about: safety, value and experience. Although health measures frequently seemed pitted against profitability and customer enjoyment over the past year, there are several changes that restaurants can make so that safety, value and experience reinforce one another rather than conflict.
Customers want safety, value and experience
As researchers at the School of Hospitality Business at Michigan State University’s Eli Broad College of Business, we have studied how customers choose restaurants and develop loyalty to specific eateries. Our research and that of others has repeatedly shown that the in-restaurant experience and customer perceptions of value significantly impact where people choose to eat.
However, safety has always been important to customers. Our research prior to the pandemic found that how safe diners feel in a restaurant is even more relevant than value for determining customer satisfaction and loyalty to a specific eatery. The COVID-19 pandemic only amplified the importance of safety: A recent survey found that customers are willing to spend twice as much at restaurants that prioritize safety and cleanliness.
Over the past year, many restaurants struggled to provide a safe environment while still offering good value and experience. Safety measures like operating at reduced capacity, purchasing PPE for employees or investing in expensive upgrades, such as ventilation systems or outdoor seating, negatively impacted restaurants’ bottom lines. Some restaurants were forced to raise prices or change their menus, while others instituted COVID-19 surcharges that quickly alienated customers.
Restaurants that prioritized experience at the expense of safety haven’t fared well either. The CDC found that COVID-19 cases tend to rise after areas relax rules around in-person dining. As a result, establishments that lack social distancing or don’t enforce mask policies make consumers anxious. In addition, restaurants are now being judged explicitly on their pandemic response: Yelp allows customers to leave reviews about an establishment’s COVID-19 policies and displays these above normal feedback.
Four ways to increase customer satisfaction
The good news is that safety, value and customer experience don’t need to conflict with one another. Here’s how restaurateurs can combine these important aspects to attract customers and build a restaurant experience designed for the post-COVID-19 world.
The best place to start is with social distancing. It’s one of the most effective ways to prevent the spread of COVID-19 and 69% of consumers want to see it when they return to in-person dining. If done right, it can also enhance the customer experience by providing a quieter, more intimate dining environment. To avoid losing revenue, some restaurants, like Monty’s Steakhouse in Los Angeles, have experimented with placing dividers between tables rather than reducing capacity. These can range from budget-friendly wooden or plexiglass panels to stylish glass walls, and, in many cases, they can be installed without removing a single table.
Restaurants can also switch from multi-use physical menus to touch-free digital ones, which more than 40% of Americans want in their post-pandemic restaurant experience. Contactless ordering is simple and inexpensive to implement — all it takes is a free QR code generator and a sticker on the table — and it creates a more seamless experience for customers. Additionally, digital ordering systems help restaurants increase check sizes by cross-selling items, free up waitstaff for other tasks, and enable loyalty programs that incentivize repeat customers. QR codes have long been popular in Asia, and during the pandemic, even upscale New York restaurants like Jean Georges and Daniel began using them.
Moreover, restaurants should ensure that customers are aware of the investments they are making to create a safer, cleaner space. For example, if staff has been vaccinated, a new ventilation system has been installed or the number of tables has been reduced for social distancing, restaurants can let customers know with a sign on the door or placards on tables. In a Deloitte survey, 80% of people indicated that knowing about a restaurant’s enhanced cleanliness or safety measures would motivate them to dine out more. So the more visible a restaurant’s safety measures are to customers, the better.
Finally, restaurants should continue investing in alternatives to in-person dining like to-go meal kits, online cooking classes, curbside pickup and delivery. Forty percent of people say they plan to continue using takeout and delivery after the pandemic, and these services offer diners who remain anxious about safety a way to enjoy their favorite restaurants. At the same time, they give restaurants more touchpoints with customers, which provides a subtle nudge to visit and increases customer loyalty. For example, Lettuce Entertain You, a Chicago-based restaurant group, has offered virtual events throughout the pandemic that combined meal kits and cooking classes to keep customers engaged.
To reengage customers with in-person dining, restaurants need to combine safety, value and experience in a way that reflects customers’ concerns in the post-pandemic world. These priorities have frequently seemed in competition with one another over the past year. However, there are a number of inexpensive changes that restaurateurs can make that will simultaneously help customers feel safe, boost restaurants’ value proposition and provide a better experience for diners. Restaurants that successfully focus on the basics will see higher customer satisfaction and greater customer loyalty.
JaeMin Cha and Carl Borchgrevink are faculty members of the School of Hospitality Business.
