Restaurant customer satisfaction report card

June 22, 2011 Updated Jun 22, 2011 at 8:24 AM EDT

By WKBW News

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Restaurant customer satisfaction report card

June 22, 2011 Updated Jun 22, 2011 at 8:24 AM EDT

Buffalo, NY (NRN-WKBW)

With consumers still cautious about spending their cash, restaurants have placed particular emphasis on service to differentiate a dining out experience from merely eating at home, and according to the new American Customer Satisfaction Index, or ACSI, that focus has worked.

Customer satisfaction scores collectively increased 5.3 percent to an average of 79 for quick-service chains, which include hamburger, pizza and coffeehouse brands. The average score for full-service restaurants was 82, an increase of 1.2 percent compared with the segment’s scores last year. The scoring is based on a 100-point scale.

Customers tend to be more satisfied with full-service restaurants by nature of having a more complete dining experience than at quick-service restaurants, said Claes Fornell, founder of the ACSI and author of “The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference.” But a dramatic improvement in satisfaction at quick-service chains should bolster the whole restaurant industry.

“Variety, speed, convenience and price define satisfaction with fast-food chains,” Fornell said. “In a weak economy, price plays a greater role than otherwise. Relatively speaking, this should be beneficial to the fast-food business. … The fact that customer satisfaction has jumped to a considerably higher level for fast food should boost the industry.”

The ACSI, founded at the University of Michigan and produced by ACSI LLC, measures customer evaluations of products and services available in the United States, spanning more than 225 companies in 47 industries.

In quick service, the four largest pizza chains continued to outpace larger rivals from the hamburger segment. Pizza Hut improved its ACSI score 4 percent to 81 and overtook the No. 1 ranking from last year’s top performer, Papa John’s Pizza.

Both Little Caesars and Starbucks Coffee improved their scores from 77 last year to 80 this year, tying for second place. Papa John’s followed with a score of 79, which was a 1-percent decrease from 2010. Domino’s Pizza’s score of 77 remained unchanged for the second straight year, despite a reformulated pizza driving gains in traffic and sales for all of 2010.

All of the pizza chains have competed with one another via price, the marketing aggressive deals like $10 and now $11 large specialty pizzas at Papa John’s and Pizza Hut, the latter of which also simplified its pricing structure to make all medium pies $8 and all large pizzas $10. Little Caesars continued to offer its Hot-N-Ready Pizza for $5, while Domino’s carried over a promotion for two medium, two-topping pizzas for $5.99 each. Domino’s also recently rolled out a carryout special of a large three-topping pizza for $7.99 Monday through Wednesday.

Of the other large chains in the quick-service segment studied by ACSI, Wendy’s had the next highest score of 77, followed by Taco Bell, which improved its ACSI score 3 percent to 76. KFC, whose score stayed the same as that of 2010, and Burger King, whose score improved by 1 percent, came in next with a ranking of 75. Rounding out the sector was McDonald’s, whose score of 72 trailed its competitors but also represented an improvement of 8 percent from a year ago.

“Since the gap to its competitors has narrowed, this may well be the sweet spot for McDonald’s,” Fornell said. “It’s not that the Golden Arches operation is so big that its revenue is immune to low customer satisfaction, but rather it is less impacted by low satisfaction compared with the competition.

“Convenience, kid appeal, location, low prices, and meeting customer expectations are the ingredients of success for McDonald’s,” he said. “Mix in a healthier dose of customer satisfaction, and the company’s near future looks better than it did a year ago.”

Darden Restaurants-owned Olive Garden and Red Lobster both scored a full-service segment-leading ACSI score of 82, though each brand’s score dipped slightly from 2010 — down 2 percent at Olive Garden and 1 percent at Red Lobster. Outback Steakhouse’s score rose 1 percent to 81, while Chili’s Grill & Bar’s score increased 1 percent to 79.

“It’s an indicator that Red Lobster and Olive Garden are two tremendous brands with very loyal guests,” said Rich Jeffers, spokesman for Orlando, Fla.-based Darden Restaurants. “We work very hard to provide an exceptional experience for every guest. If that focus continues, the results will continue to come from that.”

Fornell noted that full-service restaurants need to beat quick-service brands in customer satisfaction to justify higher prices.

“This they do, but not by much — 82 versus 79 — and their satisfaction lead is shrinking,” Fornell said. “Not only should this be a warning signal to the full-service outlets, but they also have a problem with lack of satisfaction differentiation within their own category.”