The Year of Re-Engaging Restaurant Customers

2024 will be one of the most challenging years in recent history to run a restaurant.

As a restaurant owner, you’re facing loss to your bottom line through every expense on your budget sheet. As costs of labor, food, rent, and swipe fees increase, you’ve been forced to pass some costs along to the consumer.

On the flip side, from the guest’s point of view: Prices at restaurants continue to climb more rapidly than those at grocery stores, and customer service has diminished. Consumer confidence is at a record low (i), credit card debt is at its highest rate in 20 years (ii), and 70% of consumers say it’s too expensive to have “fun” (iii). They feel they’re paying more for less. And with more choices than ever as new restaurant openings proliferate (iv), the battle for share of stomach is as aggressive as it’s ever been.

Where’s the hope in all this?

We believe that restaurants will always maintain a vital role in the well-being of society. Even within a hyper-digitized economy, people still need tangible community. Restaurants exist to create joyful experiences and help fill the human need for connection. So when we attended the 2024 GuestXM Best Practices Conference recently, we did so looking for learnings that can help our clients continue to do just that. As takeaways from the conference, here are three principles for restaurant success in 2024.

1. Make dining with you “worth it.”

Here’s an “ouch” for any restaurant owner: Only 33% of consumers say their last restaurant visit was “worth it” (iii). The main issues? The unprecedented cost of dining out coupled with a decline in hospitality, quality, and consistency.

According to GuestXM, 52% of limited-service customers and 47% of full-service customers report feeling somewhat to extremely surprised by check totals when they dine out. During her session, Lisa W. Miller — consumer insights and innovation strategist, and author of THE BUSINESS OF JOY — spoke to this, saying nearly 2 out of every 3 consumers polled said prices have gone up “too much.” (iii)

Given that restaurants with lower PPA/PTA growth experienced a 1 pt advantage on comp traffic (iv) as compared to those with higher PPA/PTA growth, not only are customers frustrated with rising prices, but they’re changing their behavior as a result.

All the talk of price becomes exhausting, we hear you. But the value equation for guests is not just about cost. Providing a “worth-it” experience is about what customers receive for their money, and ultimately what they want is trust, connection, comfort and abundance. (iii)

• Trust: Consistent food quality
• Connections: Friendly and prompt service
• Comfort: Clean and comfortable environment
• Abundance: Enough food for the money + discounts

Consumers are looking for hospitality in all senses of the word. An analysis of full-service restaurants’ online reviews showed that restaurants with a higher positive to negative hospitality mention ratio achieved nearly 2 more comp traffic points and .7 more comp sales points. (iv)

When it comes down to it, consumers believe they’re paying more at restaurants for less than an ideal experience. Restaurants that defy this belief by going above and beyond to deliver quality food and outstanding service re-establish trust in restaurants through consistency, and identify surprise and delight opportunities that create memorable joy will be the ones to win the fight for traffic.

2. Evolve with conviction.

As Velvet Taco CEO Clay Dover aptly stated in one of the event panels, “There’s a difference between evolving and floating around. You must have a strong conviction about the moves you make.” Brands leading the industry know wholeheartedly what they stand for and who they serve. They aren’t jumping on marketing bandwagons; they’re listening to what their customers want and then delivering on it.

So how do you find your “in?” Customer research is the obvious answer. But don’t overlook the stakeholders who are both invested in your brand AND know your guests best: Your frontline staff. They can tell you what customers ask for. What brings loyal patrons back. And what gets in the way of success.

Invite your crew members to share observations and contribute new ideas regularly. Open the door for unfiltered feedback and create space for the vital voices of those closest to your customer. You’ll gain meaningful learnings while deepening team members’ feelings of belonging – a core tenet of the type of company culture behind leading brands.

Secondly, study mass culture. Where could your brand intersect with marketplace trends? When bartaco observed the rise in wellness culture and “sober curiosity” among Gen Z, they found an opportunity via a new zero-proof mocktail menu. Bartaco created value for alcohol-free customers through upscale, flavorful concoctions that still deliver upon the restaurant’s “vacation vibes” experience.

3. Level-up your GM.

We won’t belabor this one. We don’t have to tell you about how vital your GM is; they’re your right arm. The challenge presented by former KFC US COO Monica Rothgery is that many GMs are too busy doing everyone else’s job to do the job that’s theirs: growing the business.

According to Rothgery – who has more than 30 years in the restaurant industry including four years overseeing 4,000 KFC units – developing your GM to his or her full potential is an unlocking move. When your GM is equipped to effectively lead their team, champion sales targets, and focus on enhancing customers’ experience, the ripple effects reverberate. What does this look like?
• Provide true leadership training (not just job training)
• Establish meaningful daily and weekly KPIs with tangible metrics tied to them
• Create incentives for hitting said KPIs
• Make space for GMs’ voices and ideas to be heard
• Allow them the time and resources to focus on growing your business

When restaurant leaders invest in your GMs, you’ll save costs through higher retention rates and accelerate growth in a way you never have before.

A final takeaway

As we heard from established industry leaders at the Best Practices Conference sessions and engaged with participants, we were encouraged by the sense of optimism in the room. Yes, 2024 is one of the most challenging years to run a restaurant. But you, who elect to be part of this industry, are resoundingly resilient. And if anyone can run a restaurant in 2024 — it’s you.

Sources via Black Box Best Practices Conference, 2024
i University of Michigan
ii New York Fed Consumer Credit Panel / Equifax
iii Lisa W. Miller & Associates Back to Joy Research
iv GuestXM Market Intelligence

JENNA OLIVER is an account director at LOOMIS, the country’s leading challenger brand advertising agency and a top Dallas advertising agency for digital, social, mobile and user experience. For more about challenger branding, advertising, and marketing, leadership, culture, and other inspirations that will drive your success, visit our blog BARK! The Voice of the Underdog and catch up on all of our posts.

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