Click Here for great Idaho Potato Recipes!

NPD: Diners Are Loyal to Quality, Not Deals

Filed under Promotion, Research

Source: The NPD Group/”Defining Value Today: How Consumers Choose to Eat Out”

Diners are acutely price-conscious now but their dining preferences may be less strongly determined by promotional or price offers than some operators appear to believe. The NPD Group’s new report, “Defining Value Today: How Consumers Choose to Eat Out,” finds that loyalty keeps many diners returning to their favorite spot no matter what.

The study finds that 42% of consumers say they go to the same place regardless of whether or not a promotional deal is offered. This isn’t the result of “brand inertia,” where diners simply would rather not change their habits. In fact, NPD finds, loyalty is a choice driven by perceived quality and an inclination to define value as more than price.

Loyalty isn’t the majority position, however. More than one-third of consumers say they look for bargains, with 26% saying they switch among restaurant choices depending on promotions and another 9% saying they simply dine wherever is cheapest. Nearly one in five respondents (19%) said they seldom eat out and the remaining 4% said none of the answers was applicable.

“Consumers choosing where to dine is subject to some of the same pricing and deal pressures as other retail categories, but there remains large segments of the population for whom ‘value’ is much more than the lowest prices,” says NPD Restaurant Industry Analyst Bonnie Riggs. “Given this, operators will want to execute different marketing campaigns to appeal to a broad base, while remaining relevant to those seeking out the lowest price and best deals.”

6 Responses to NPD: Diners Are Loyal to Quality, Not Deals

  1. Charlie Hopper

    The only thing is, a tiny voice in my head always asks me (and I never know what to tell it), “Those people who say they switch around based on promos–are they just saying that because they want to be the kind of person who is smart with their money and they’re saying something they HAVE done but don’t always do? And in the end do they just grab their keys and drive to one of the places they always go regardless of promos, but kind of don’t ‘count’ it because they’re just ‘grabbing a bite’ at a nice, familiar place?” The tiny voice in my head is kind of rambly and doesn’t say things concisely, but I always have to think about what it’s saying…

  2. Good artilce.

    Excellent Customer Service goes a LONG way in repeat business and customer loyalty.

    This study shouts loud and clear that cheapest isn’t the majority’s first choice. When was the last time you had too much customer service?

  3. It’s tough to mix terms like “loyalty” and “promotional deal”.
    For example, I’ve never chosen an airline for a promotional deal….but I make sure I get loyalty points every time I fly.
    I think that’s the big difference – when I’m deciding where to eat, if I get points at one restaurant and don’t at the other, I always lean towards getting points!

  4. Ivan

    We think loyalty is an integral part of a restaurant’s success that is frequently under represented in their marketing efforts. It’s harder to get 10 new customers to come to your restaurant than it is to get 1 old customer to come 10 times a year. This effort is cumulative and should be embraced more often than it is.

  5. As a Chef, it’s really hard now a days to find “quality” unless you pay a premium for it. It’s totally amazing how many people have recommended me restaurants for me to try, and turn out to be a let down because of either poor quality, service is substandard, or the freshness of the food is not to par. This can all be solved through keeping your employees trained and the proprietors and managers being more hands on in both the front and back of the house. However, the issue here in this article is loyalty to quality. As an individual in this industry, there is more there than just the quality. It’s all about the experience as a whole. It starts right when someone walks in. Are you greeted with a smile, is the server knowledgeable, do they know the product, is their uniform clean, are the prices fair, is the food of good quality, did the manager come by to see how your experience was, were your drinks refilled in a timely manner, were the restrooms clean?
    There are a few things that owners fail to keep in their philosophy of good business. Is the product consistent? Are my employees taken care of? Are the menu prices fair and of good value? If the establishment runs its business right, the loyalty will come no doubt about it…because it is good! Personally, I dont want a “deal”. I want a good experience!
    Lee Ewing
    Culinary at Home L.L.C.
    The Culinary Institute of America

  6. John

    It is the whole experience, BUT quality of food goes a long way with loyal customers. After being in restaurant management for 18 years and now on the supplier side, I see and deal with people everyday that want the cheapest thing I have no matter what the quality is and there is no changing them. With the inexperienced owners and Chefs(or those who claim themselves to be of which there are a TON out there opening restaurants and Im not sure why- you can send me your money and NOT have all the stress and headaches lol) that are all about “What my food cost is” are losing the battle of putting butts in seats.
    With rising cost, you HAVE to look at the whole picture. Some of my best customers have 40-50% food cost (I know that ludacris right??) but you know what- they GROW 30% every year! They understand how serving quality food is very important to the whole picture / experience and they also know they can make it up on the alcohol sales. For those of you out there that want a large profit on everything you sell….your dreaming, it will never happen and I will watch you all close your doors. Take it from someone who has been involed in all aspects of hospitalitiy, either take some classes or ASK FOR SOME HELP / INSIGHT in understanding how the whole process works. There are those of us out there that have the knowledge and are willing to help you.
    Also, pick a supplier and PARTNER with them, if you have more than two you are waisting more time and money then your saving and please do us all a favor and stop going to Walmart / Sams Club and Restaurant Depot (and all other types of these stores), I understand if you need something in a pinch, but if I want grocery store food I will stay at home.

    I wish everyone a prosperous 2013!