The Future is Now: Are you giving customers the experiences they demand?
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The Future is Now: Are you giving customers the experiences they demand?

The Future is Now: Are you giving customers the experiences they demand?

It’s been said that serving your customers is the same as serving your business. It’s a simple equation, but one that shifts over time as expectations change. McLain Hoogland, president of Hoogland Restaurant Group, understands how drastically the sand can move underfoot. At one time, his family owned nearly 900 Family Video stores, where people could walk the aisles, pick out a movie, and take it home.

“Family Video was really well known for customer service. That’s what set us apart from everybody else. It was the more traditional customer service, face-to-face customer service.

Somebody walks in the door, the bell rings, and somebody’s looking at you in the eye,” Hoogland says. "We wore ties. We were a little bit fancier video store at the time than Blockbuster, which had the raggedy blue shirt that everybody knows.”

Everybody also knows streaming killed the video store, but Hoogland and his family adjusted. In 2010, they connected with an up-and-coming franchise called Marco’s Pizza. Hoogland Restaurant Group now owns and operates approximately 120 restaurants throughout the Midwest, and times have changed again. In the early days, online sales accounted for 20–25% of orders.

“We’re not getting that many phone calls anymore,” Hoogland says. “With DoorDash and Uber Eats, we’re almost 70% online. You’re not really interacting with a human anymore. You’re interacting with the machine. Their only touchpoint is really a delivery driver, and at that point, they don’t want to chitchat with the delivery driver.”

People still call in, and when customers come to pick up their orders, employees are expected to be friendly and courteous. But there’s been a shift partly driven by Covid-19. Business owners and customers had good reasons to avoid face-to-face contact, and that has driven the emergence of artificial intelligence (AI) and other rapidly evolving technologies.

According to a 2023 report in Forbes, 97% of consumers say customer interactions affect their brand loyalty. In addition, 61% say they’re willing to pay more for good customer service, and 88% say the customer experience means as much to them as the product or service.

The numbers point to the importance of providing high-quality experiences, but customer expectations aren’t static things. They shift from person to person and from sector to sector. In the pizza world, speed, taste, and accuracy rule the day. However, some customers choose meals or experiences exactly because they offer the opportunity to slow down.  

Andrew Brennan is co-owner of Quaker Hospitality Holdings, which owns 20 Penn Station East Coast Subs in Cincinnati and Dayton, Ohio. He says the sandwich brand has taken a slow and steady approach to change that preserves the company’s core business. 

“People forgot what it’s like to really have a pleasant dine-in experience and sit down and have a nice sandwich delivered to them. They don’t know what they’re missing,” Brennan says. “Dine-in has come back significantly, and we’re not keen to abandon that model.”

That’s not to say that Penn Station leadership is against change. “Fast-casual customers have many different ways to get products and get food, and that continues to evolve whether it’s the app or online or drive-thru or pickup,” he says. “That’s definitely an accelerated and fundamental shift that I think is here to stay.

Successful franchisees have always found new ways to serve their customers because tastes and expectations change, and sometimes, guests don’t know what they want until someone offers it to them. In short, taking care of customers and anticipating their future needs are moving targets for multi-unit franchisees. 

“As an owner,” Brennan says, “you try to evolve and slowly adapt to changes in customer expectations or industry trends,” Brennan says. “At the same time, we like to control our product and control how our customers access our brand.”

Power to the people

Traci Nocito, the owner of two Hand & Stone Massage and Facial Spa locations in Pennsylvania and two in South Carolina, has a front-row seat for the AI revolution and the difference it can make. Hand & Stone’s scheduling system allows clients to book their next pampering sessions without help from staff members.

“It definitely gives them more control because they don’t have to call in. They don’t have to wait for someone to schedule them. They can go right on our Hand & Stone app and schedule their appointment,” Nocito says. “It does make it nice because they’re not having to wait to have someone call them back. They’re not having to wait for a human. It just automatically does it for them.”

Of course, the human connection hasn’t gone out of style for everyone. Nocito says younger clients, especially Generation Z, get the most use out of the scheduling app. Others still prefer to talk to someone.  

“I think we have to have an avenue for each type of customer, so I don’t think I will go completely AI, but I think there’s room for it,” Nocito says. “I think we need to grow with the clientele. We have to give them what they’re looking for. Also, if they’re looking for that human touch, we need to give them that. If they’re looking for a bot to use, we give them that.”

Technology advances also allow franchisees to provide more personalized service. Well-written loyalty program software can easily sort through piles of data points before a staff member can say, “How may I help you?” Adam Saxton, co-CEO and owner of The Saxton Group, oversees 72 McAllister’s Deli locations. He says the restaurant’s app is making sure customers get what they want.

“It does understand what your preferences are. It understands what you like to order, how loyal a guest you are, and how frequently you visit,” Saxton says, “and then your offers and rewards are customized for you.”

One of the overriding rules for The Saxton Group is to serve guests in the most convenient way for them. That can include dine-in, online ordering from the table, online orders for pickup, and third-party deliveries. The app takes the idea of loyalty rewards and customizes it for each guest. As Saxton says, chocolate chip cookies are great, but they’re not everybody’s idea of a reward.

“We get to know them, so we can reward them in a way that is meaningful to them,” Saxton says. “It’s expanding that old promise of McAllister’s genuine hospitality where we really get to know our guests and want them to get to know us. It’s just taking that same service model and that same promise that we’ve had to our guests since we started and expanding that into the digital space.”

Relaxation for sale

When Ryan Manville was looking for a franchise to buy, he wanted one that technology would not disrupt. More than six years ago, he chose to team up with Spavia. He and his wife, Jennifer, now own three Spavia locations in New Jersey and one in Tennessee. 

“From a financial perspective, it works because it’s not a business that can be easily ‘Amazoned.’ I always use the term ‘Amazoned,’” he says. “An online retailer can’t do it, and we’re decades away from AI and robots being able to do a facial or a successful massage. Massage chairs are not really the same. I saw that it had longevity.”

His locations use bots to answer the phone and computers to handle the scheduling, but the spa business is about stepping away from the stresses of modern life. That includes leaving technology behind on the way to relaxation and rejuvenation.

“You get into a spa robe and slippers, and you put your life in that locker—the cell phone stays in the locker,” Manville says. “It just gives you a break from that overall barrage whether it’s texts or email or surfing the web or anything like that. It’s a respite from the modern world. It’s nice.”

The pandemic posed a potential existential threat to the spa industry, but as fears of infection have receded, people found they wanted to treat themselves. Both Spavia and Hand & Stone use a membership model, so clients get treatments each month, and they’re able to purchase massages, facials, or other services at reduced rates.

“It’s an easy sell for us. Everybody has to take care of themselves,” Nocito says. “It’s like people think of it as an hour out of their life that they can unplug once a month. Who doesn’t want to come take care of themselves an hour out of the month?”

Because customers don’t always know what they want until they get it, Nocito offers special deals to her members on a regular basis, so they can try different treatments. 

“They’re all offered a discount on Himalayan salt stones or CBD oil or whatever I’m offering. It gives them a taste of what we have to offer besides a Swedish massage,” Nocito says. “Whether it’s massage or on the aesthetic side, we do all kinds of little things throughout the month and the year.”

Manville and Spavia take a similar approach by offering new types of treatments on a regular basis. He’s found that a third of his members crave new types of spa experiences, another third will try new things here and there, and those in the third group like what they like and stick with it.

“We’re always on the lookout for new advancements with different treatments or even within the existing treatments to make those better,” Manville says.

Something new 

The restaurant business doesn’t sit still either. It might seem like pizza is pizza, but there’s always room for innovation, according to Hoogland. “Pizza is about speed, accuracy, and product quality, so we heavily focus on that stuff,” he says. “Marco’s has done a really nice job of looking for new things too. Nowadays, everybody’s looking for something new.”

The chain has a program called Tell Marco’s, so franchisees, staff members, and customers can offer complaints and make requests to the home office. From that feedback, Marco’s now offers the Pizzoli, a handheld pizza wrap with American cheese. 

“That was a direct reaction to customers,” Hoogland says. “Marco’s did a really nice job of saying, ‘What does the customer want?’ They want a handheld. They want a lunch product because who wants to go get a small pizza and have to take a nap after lunch in the middle of the day?”

Hoogland is a member of the Marco’s Independent Franchise Association, which provides another way for people at corporate to learn what’s happening on the ground. Franchisees of all sizes are represented.

“We’ve always considered ourselves very field-oriented,” Hoogland says. “We can’t make adjustments based off what we see and hear in the data analytics side of it. We have to be able to understand what the consumer wants, and the best way to do that is to listen to the people on the ground.”

Not every innovation is welcome. Taco pizza didn’t go over well with customers, which might have been just as well. “It was difficult to make,” Hoogland says. “You’ve got to have fresh lettuce. It didn’t work, but it was worth a shot.”

The corporate kitchen for McAllister’s Deli also likes to experiment with different menu options, but everything on the menu has to feel as though it belongs there, Saxton says.

“What McAllister’s likes to do is keep our core favorites on our menu that our customers love,” he says. “Instead of coming up with an entirely new menu item, we take a really great-selling menu item that our customers really love and find ways to enhance it or find a new version of that same item.”

For example, the Club is the best-selling sandwich, so McAllister’s created the King Club. It includes the same ingredients as the original but with bigger portion sizes. Saxton says it’s important to try new things while respecting the brand’s core food promise to customers.

“There are a lot of new diets going on or some new superfood or some new way of eating that everybody’s talking about,” Saxton says. “You can try to chase every food trend out there, but you’re not going to win. You’re going to end up looking at your menu and saying, ‘What is the identity of this brand? What do we stand for?’ It doesn’t have any kind of heritage brand value attached to it.”

Brennan says the leadership at Penn Station East Coast Subs was slow to embrace online ordering and third-party delivery. In the wake of the pandemic, the franchisor has been “forced to jump pretty quickly into expanding our capabilities there,” he says.  However, the company still believes in taking a conservative approach to change and never wants to race ahead and leave its customers behind. 

“Trends do evolve and sometimes trends become more permanent,” Brennan says. “Sometimes, though, you look at it with hindsight, and it was just a fad.”

With that said, some quick-service and fast-casual restaurants have been following Penn Station’s lead. The sandwich shop’s physical footprint is anywhere from 1,500 to 1,700 square feet, which results in lower rent costs and reduces the pressure to increase costs for guests.

“It is a pretty simple back-of-the-house layout,” Brennan says. “We try to streamline that as much as possible and be efficient with our behind-the-counter space, which allows us then to have as many tabletops as possible in the store.”

What’s next?

Over at McAllister’s Deli, new construction makes shelf space available for third-party and online pickups, so customers can get their food as quickly as possible. “You have a dining experience, you have a website, you have an app, and you’re on every third-party platform,” Saxton says. “What more can you do?”

That’s not a complaint. It’s an important question that successful franchisees will never stop asking because the best way to serve your business now and in the future is to serve your customers.

Published: March 23rd, 2024

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