Restaurants wish to build repeat business, however to do that they must continue to get new diners to try their restaurant. How does that usually happen? In a May 1998 Restaurants USA article called "Drawing Diners to Your Door" it states that "The two most popular sources of restaurant information for consumers, however — restaurant reviews and word of mouth"
and goes on further to say:
"According to Tableservice Restaurant Trends — 1998, more than four out of five consumers are likely to choose a tableservice restaurant that they haven't patronized before on the basis of a recommendation from a family member or a friend."
Source: Restaurants USA
In the Internet age, the effect of these two pieces: restaurant reviews and word of mouth, are magnified. Restaurant reviews are archived and available online for anyone to find when they search for a restaurant. The same is true for "word of mouth" or comments posted by customers.
Restaurant reviews can be good or bad, however research has found that "word of mouth" tends to be negative. A new book from the Harvard Business School Press "The Ultimate Question: Driving Profits and True Growth" states:
"Detractors, meanwhile, are responsible for 80 to 90 percent of the negative word of mouth, and the cost of this drag on growth should be allocated to them. Perhaps the easiest way to estimate the cost is to determine how many positive comments are neutralized by one negative comment and how many potential referrals have therefore been lost. This number can be accurately determined only through customer interviews, but for an initial estimate it's safe to assume that each negative comment neutralizes from three to ten positives."
Source: Harvard Business School
How much negative word of mouth is usually spread? In a Wharton article titled "Beware of Dissatisfied Consumers: They Like to Blab", their research on retail shoppers showed:
"6% of shoppers who experienced a problem with a retailer contacted the company, but 31% went on to tell friends, family or colleagues what happened. Of those, 8% told one person, another 8% told two people, but 6% told six or more people."
The same article goes on to say that the financial impact of negative word of mouth on retailers is the following:
"Overall, if 100 people have a bad experience, a retailer stands to lose between 32 and 36 current or potential customers, according to the study."
Using this research, it is easy to see how negative word-of-mouth of a dissatisfied restaurant customer can affect the ability of a restaurant to attract potential new diners. Also when this negative word of mouth is posted on the internet, which is more likely with the proliferation of blogs and increased computer literacy, it can become tightly associated with a restaurant when someone uses Google to search for it.
For example: The Brown Pelican Restaurant in Santa Barbara
A web site SantaBarbara.com allows the general public to comment about their dining experience at restaurants. One comment posted at 2/20/06 is titled: "Truly bad service", while another comment goes on to say "The service is AWFUL. My girlfriends and I had to track down our waiter several times."
Now when you search for "Brown Pelican restaurant" in Google (click here), the link to these comments on the SantaBarbara.com web site is the 2nd result.
WaiterBell Angle: Dissatisfied customers are more likely to talk than satisfied customers, and those who use the internet to post their opinion can have it appear in the search results when someone looks up the restaurant online. This can be like having a negative review on a restaurant's virtual window when people walk by online. What are the effects of these online negative reviews? How many new restaurant customers are being lost? How many potential repeat customers are being lost? WaiterBell lowers the risk that a customer leaves a restaurant dissatisfied because of accidentally neglectful service.