Reviews, Revenue, and Reputation

A colleague of mine, Ed, was kind enough to invite me out to lunch recently.  Since my husband and I work out of the house, we tend to go out for lunch virtually every workday, and I feel like I know every restaurant within a 20 minute driving radius.  I also consider myself somewhat of a self-proclaimed dining critic.  So when Ed mentioned a place of which I’d never heard, I was excited to experience some new cuisine.  The place was downtown and located next to a parking lot, which, for Dayton Ohio, is definitely a plus for location.  The décor and ambience were trendy and upscale, the food was fantastic, the staff was friendly and courteous, and the prices were reasonable.  Considering the large number of people who work downtown, I was shocked that the place wasn’t packed.  It has all the qualities of a great restaurant, so what’s the problem?Dinner Party

Doing a little investigation, the restaurant is a sole-proprietorship and only has the one location.  According to its Facebook page, which has a professional cover photo and is updated fairly frequently, the venue hosts live music, parties, food and drink specials, and again, has all the qualities of a successful place.  So what gives?  It turns out that, while I had a phenomenal experience, several patrons over the past couple years did not and expressed their disdain on Yelp.com and Urbanspoon.com.  Now, just to be clear, the restaurant received more excellent reviews than poor ones, but I wondered if these few shared negative experiences could make such an impact.  The answer:  Yes they can.Disdain

According to a 2011 study from Harvard, a one-star increase in Yelp rating leads to a 5-9 percent increase in revenue.  Independent restaurants drive this effect; ratings do not affect restaurants with chain affiliations.  Additionally, consumers respond more strongly when a rating contains more information and these online reviews are becoming more influential for a business’ reputation.  Considering that some of the negative online reviews were a bit lengthy, it appears that they could be inhibiting my newfound restaurant’s success.   So what can be done to fix this?

For starters, the restaurant owner should implement a policy of regularly checking these sites, or find someone who will, and address any negative comments promptly by contacting the poster via email.  95% of unhappy customers will return to your business if an issue is resolved quickly and efficiently.  In this email, the patron’s complaints should be acknowledged, addressed professionally, and then offered a free meal or other reasonable item with an invitation to “see how we’ve changed” or similar wording appropriate to the circumstances.  Make sure to put an expiration date; people are generally driven by deadlines to act.  Happiness

Secondly, restaurant servers should start encouraging patrons to write a review on Yelp, Urbanspoon, and the restaurant’s Facebook page….and the servers should be explicit with naming the actual sites.  Research shows that 71% of people agree that consumer reviews make them more comfortable that they are buying the right product/service and that 70% of people consult reviews/ratings before purchasing.  Finally, the owner should NOT worry about those few negative reviews.  Why?  Because it’s likely that every business will, at some point, get a few negative reviews–in fact, a couple of these in a large pool of good ones lends credibility. People generally understand that everyone makes mistakes every now and then.

Considering my experience with this restaurant, I think I’ll have to go back and share my thoughts with the owner.  Who knows where it might lead…a consulting job or just making a good connection…either way it’s an excuse to enjoy some delectable cuisine.Delicious

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