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Top Cornell Hospitality Quarterly Article of 2007 Examines Revenue Consequences of Satisfied Restaurant Customers |
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Restaurant managers have long suspected that satisfied customers are a key to a successful restaurant, but until recently, no research study had established this profitable connection. |
A Cornell Hospitality Quarterly article published in August 2007 does exactly that and has been named the best article of CQ volume 48. The Cornell Hospitality Quarterly is available by subscription from Sage Publishing (www.sagepub.com).
'Guest Satisfaction and Restaurant Performance," by Sachin Gupta, Edward McLaughlin, and Miguel Gomez, analyzed the performance of three restaurant chains that recorded 80,845 customer visits and established the significant connection between customer satisfaction (as measured by intention to return) and increased sales.
The authors found that, for these three concepts, a 1-percent increase in customers' likelihood of returning would amount to as much as $1.3 million in extra sales (even though the daily increase in sales from satisfied customers is small). While the relationship would be different for other restaurant concepts, the principle is the same. When the likelihood that customers will return increases, so does revenue.
For the chains in this study, four factors drove consumer satisfaction meaning that managers should focus on those items. They are delicious food, an appropriate cost, a cheerful greeting, and attentive service. These attributes might be different for other restaurant concepts, but this analysis provides a means of focusing management's attention on the specific attributes that will improve customer satisfaction and subsequent sales.
The study employs a series of mathematical models to make its prediction regarding how the level of customer satisfaction with certain attributes of guests' dining experience affects the likelihood that they will come back. Those 'come-back' scores and other variables affect restaurant performance, as measured by sales and entrée counts.
Sachin Gupta, Ph.D., is professor of marketing at the Johnson Graduate School of Management at Cornell University. Edward McLaughlin, Ph.D., is the R.G. Tobin Professor of Marketing in the Department of Applied Economics and Management at Cornell University. Miguel Gomez, Ph.D., is an assistant professor of agriculture and consumer economics at the University of Illinois.
Finalists for best article of volume 48 were 'Visual Methods: Using Photographs to Capture Customers' Experience with Design,' by Madeleine Pullman (Portland State University) and Stephani S.K. Robson (Cornell University), and 'The Combined Effects of Physical Environment and Employee Behavior on Customer Perception of Restaurant Service Quality,' by Eileen Wall (St. Mary's University of Texas) and Leonard L. Berry (Texas A&M University).
About the Center for Hospitality Research
A unit of the Cornell School of Hotel Administration, The Center for Hospitality Research (CHR) sponsors research designed to improve practices in the hospitality industry. Under the lead of the center's 71 corporate affiliates, experienced scholars work closely with business executives to discover new insights into strategic, managerial and operating practices. The center also publishes the award-winning hospitality journal, the Cornell Hospitality Quarterly (formerly the Cornell Hotel and Restaurant Administration Quarterly). To learn more about center and its projects, visit www.chr.cornell.edu.
Center partners and sponsors: AIG Global Real Estate Investment, American Airlines Admirals Club, Davis & Gilbert LLP, Deloitte & Touche USA LLP, Denihan Hospitality Group, Expedia, Inc., Four Seasons Hotels and Resorts, Fox Rothschild LLP, General Growth Properties, Inc., HVS, InterContinental Hotels Group, job.travel, JohnsonDiversey, Inc., Jumeirah Group, LRP Publications, Marriott International, Inc., Marsh's Hospitality Practice, Mobil Travel Guide, Nestlé, PricewaterhouseCoopers, Proskauer Rose LLP, Smith Travel Research, Southern Wine and Spirits of America, Inc., SynXis (a Sabre Holdings Corporation), Taj Hotels Resorts and Palaces, Thayer Lodging Group, TIG Global, Travelport, WATG, and WhiteSand Consulting.
Center friends: 4Hoteliers.com American Tescor, LLC Argyle Executive Forum Caribbean Hotel and Restaurant Buyers Guide Cody Kramer Imports Cruise Industry News DK Shifflet & Associates ehotelier.com EyeforTravel Fireman's Fund Insurance Company Gerencia de Hoteles & Restaurantes Global Hospitality Resources Hospitality Financial and Technology Professionals (HFTP) hospitalityInside.com hospitalitynet.org Hotel Asia Pacific Hotel China HotelExecutive.com Hotel Interactive Hotel Resource International CHRIE International Hotel and Restaurant Association International Hotel Conference International Society of Hospitality Consultants (ISHC) iPerceptions KPMG Japan/Global Management Directions Lodging Hospitality Lodging Magazine Milestone Internet Marketing MindFolio PKF Hospitality Research The Resort Trades RealShare Hotel Investment & Finance Summit Resort+Recreation Magazine RestaurantEdge.com Shibata Publishing Co. Synovate The Lodging Conference TravelCLICK UniFocus WageWatch, Inc. WIWIH.COM
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