2008 Headlines
Sachin Gupta Wins Best Paper Award for Cornell Hospitality Quarterly
Study Examines Revenue Consequences of Satisfied Restaurant Customers
May 21, 2008 | Ithaca, NY | 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 ( http://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 one 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 School 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).
