The news has been awash with unflattering headlines about the casual dining and fast casual categories, including stories like “America’s casual dining ‘heydays are over’” and “Why Sit-Down Chain Restaurants Are Struggling.” That’s not all surprising as there have been so many bankruptcies as well as notices of en masse closures in this category. The list of companies that have been casualties of this trend includes well-known brands such as Red Lobster, TGI Fridays, Buca Di Beppo’s, Denny”s, and BurgerFI, among others.
Yet, despite the flood of bad news, there are some good news stories in these categories such as Chick-fil-A, Texas Roadhouse, and Outback Steakhouse. These companies are holding their own and expanding while their peers are shrinking and going out of business. For example, in a 2023 report Texas Roadhouse was identified as the fastest growing steakhouse in America as well as the fastest growing restaurant brand in the world. Meanwhile, Chick-fil-A per unit revenues are 2.5 times industry icon McDonald’s.
So, what are they doing differently? A recent study sponsored by The Customer Obsession Advantage (COA) and SLD has some answers. The COA/SLD study collected nearly 2000 ratings for 18 companies in these categories and found that customers were much more likely to return and repurchase from companies that got top tier ratings on at least one of four Customer Obsession practices:
- They almost always deliver the outcome I was seeking
- Employees feel free to do whatever it takes to resolve a problem
- Food tastes fantastic
- The price I pay is definitely a great value
These practices literally define what it means for casual-dining and fast-casual establishments to deliver on their brand promise, and in the study Chick-fil-A, Texas Roadhouse, and Outback Steakhouse far outpaced their peers in obtaining top tier ratings on these practices. Plus, they led the field in the overall percentage of customers who “Absolutely will do more business within the next 12 months.” Meanwhile, Wingstop, TGI Fridays, and Starbucks lagged the field in top tier ratings for the four Customer Obsession practices and on the overall percentage of customers who return. Overall, there is a 19-point gap between Chick-fil-A and Starbucks in terms of customers who return and repurchase even though coffee drinking is a daily habit.
The table below demonstrates how the brand promise leaders are differentiated from the brand promise laggards in terms of getting top tier ratings from customers on the Customer Obsession practices.
| Pct. of Top Tier Ratings for Customer Obsession Practices | |||||
| Restaurant | 0 | 1 | 2 | 3+ | 1+ |
| Chick-Fil-A | 39% | 22% | 25% | 15% | 62% |
| Texas Roadhouse | 45% | 19% | 17% | 20% | 56% |
| Outback Steakhouse | 51% | 21% | 11% | 17% | 49% |
| Wingstop | 54% | 20% | 15% | 11% | 46% |
| TGI Fridays | 59% | 16% | 11% | 14% | 41% |
| Starbucks | 66% | 16% | 10% | 8% | 34% |
Clearly there is a linkage between whether casual-dining / fast-casual restaurants deliver on their brand promise and the level of repeat business they get from customers. As such, the gap between the brand promise leaders and laggards represents an opportunity for struggling chains in these categories. For example, if a company is able to move the needle for just one of the Customer Obsession practices, they can double their percentage of repeat customers and if they move the needle for two practices, they can nearly triple their percentage of repeat customers. Only 13 percent of the customers in the study gave top tier marks for two practices so there’s a lot of room to grow.
| Number of Level 1 Drivers Rated ‘Outstanding’ | % Definitely Return | % People in Sample |
| 4 | 94% | 6% |
| 3 | 88% | 9% |
| 2 | 71% | 13% |
| 1 | 59% | 17% |
| 0 | 27% | 56% |
With that in mind here are some specific steps casual-dining / fast-casual chains can take to move the needle on delivering their brand promise:
Focus on the end-to-end experience. That includes touch points such as the welcome, ordering or order taking, wait time management, order fulfillment, checkout, and the farewell/invitation to return. Every restaurant visit is a total experience, and every experience is only as good as its weakest link. If all but one of the orders at a table arrives correctly, it changes the entire dynamic of the experience. If customers have an inordinately long wait before their order is taken, it puts a damper on the entire experience. Perhaps worst of all is if the food doesn’t pass muster for tastiness. That pretty much sinks the experience.
Chains should take a cue from Nick Saban, the greatest college football coach of all time, whose “Process” emphasized executing each play perfectly every time. Saban initially rose to prominence by using the “Process” to defeat opponents who were higher ranked and better resourced than his team was.
End-to-end experience also includes team member behaviors. Do team members consistently deliver service that makes customers welcomed, cared for and appreciated even on their “subpar” days? Do employees feel free to do whatever it takes to resolve a problem?
Additionally, end-to-end experience includes physical features such as curbside appeal, the host/welcome areas as well as overall ambiance and layout. Is the seating optimized for target audiences and for a diversity of needs? Is the lighting conducive to ordering? Does the layout support wait staff in managing wait time? Does the layout facilitate order fulfillment?
These are the plays casual-dining / fast-casual chains must execute perfectly every time to get top tier ratings for the Customer Obsession practices and to maximize their customer return rates. Human-centered design is often thought of as a strategy to be employed for software development, but this approach could be used with great effect to reinvigorate end-to-end experiences for casual-dining / fast-casual chains. That would deliver the jolt these chains need to get out of the doldrums, and you might have noticed that it isn’t all about price.
Marbue Brown is the author of the book “Blueprint for Customer Obsession” and founder of The Customer Obsession Advantage (customerobsession.net), a firm dedicated to helping companies achieve extraordinary business results through Customer Obsession. He is an accomplished customer experience executive with a track record of signature results at JP Morgan Chase, Amazon.com, Microsoft Corporation, and Cisco Systems.
Jean-Pierre Lacroix is President of Shikatani Lacroix Design (SLD.com), SLD is a global branding firm specializing in transforming customer experiences for financial institutions and retailers’ brands. He is an innovator, designer, strategist, futurist, transformer of brands for growth and has been instrumental in assisting top brands such as DQ, Pizza Hut, Boston Pizza and Chopped Leaf to remain relevant.
Dr. John Hughes is Chief Data & Analytics Officer at The Customer Obsession Advantage (customerobsession.net). He has been a trusted advisor to C-suite executives regarding CX data, analytics and insights at some of the most iconic companies on the planet, including JP Morgan Chase, Microsoft Corporation, Verizon, PNC, Citibank, A&E, BET, Expedia, and Kodak.
