A customer walking out of your restaurant unhappy, without voicing their dissatisfaction, can have devastating consequences for your business. When this dissatisfaction turns into a one-star review and negative word-of-mouth, the financial impact can multiply quickly. Let’s examine the potential losses from just one such experience and explore how Instorereviews.com can help mitigate these losses.
Step 1: The Negative Experience
Imagine a customer has a poor dining experience but leaves without informing your staff. As a restaurant owner, you lose the opportunity to resolve the issue before it becomes public.
Step 2: The One-Star Review
Once home, this dissatisfied customer posts a one-star review online. According to Forbes, 94% of consumers have avoided a business at least once due to negative reviews (CMG Local Solutions, 2023). This statistic underscores how critical managing your online reputation can be.
Breaking down the cost:
- Average meal cost in the U.S.: $33 (National Restaurant Association, 2023).
- Lost customers from one negative review: 30 (CMG Local Solutions, 2023).
The financial loss from just this single review, factoring in a typical 30% overhead, would be:
- 30 customers x $33 per meal = $990.
- Subtract $297 (30% overhead) = $693 in profit lost.
Step 3: Word of Mouth
In addition to the review, the dissatisfied customer shares their negative experience with others. Research shows that dissatisfied customers typically tell 9-15 people about their bad experience, with 13% telling more than 20 people (Customer Thermometer, 2023(
- )). Using an average of 15 people, we can estimate that if just 5 out of those 15 people decide to avoid your restaurant based on this feedback, you would lose:5 customers x $33 per meal = $165.
- Subtract $49.50 (30% overhead) = $115.50 in profit lost.
Step 4: Total Cost of One Negative Experience
When we combine the losses from both the online review and word-of-mouth, the total financial loss of a single unresolved negative experience is:
$693 (from the review) + $115.50 (from word-of-mouth) = $808.50 in profit lost.How Instorereviews.com Can Help
Instorereviews.com offers a proactive solution to mitigate these losses. We provide real-time negative feedback alerts, allowing restaurant staff to receive immediate notifications when customers are unhappy. This gives your team the opportunity to address dissatisfaction in the moment, improving the customer’s experience and reducing the risk of further negative reviews or word-of-mouth damage.
If Instorereviews.com helps you avoid just one negative experience per month, you could save:
- $808.50 per incident.
Over the course of a year, this would result in:
$808.50 x 12 months = $9,702 annually.Factoring in the Cost of Instorereviews.com
The cost of Instorereviews.com is $99 per month. Over the course of a year, this amounts to:
$99 x 12 months = $1,188 annually.
Subtracting the cost of the service from the savings, your net annual savings would be:
$9,702 (annual savings) – $1,188 (service cost) = $8,514 in net annual savings.
Conclusion:
Unresolved negative experiences can have a significant financial impact on your restaurant, both through online reviews and word-of-mouth. With Instorereviews.com, you have the chance to engage with dissatisfied customers and address issues before they escalate. Even if you prevent just one negative incident per month, the net annual savings of $8,514 demonstrate how valuable Instorereviews.com can be in protecting your restaurant’s revenue and reputation.
