Restaurants are perceived as some of the most straightforward and simple businesses in the world, which has major implications for sales growth, according to a new “2013 Global Brand Simplicity Index” from Siegel + Gale.
The New York-based global branding firm has found that when consumers view businesses as simple, they’ll be more likely to return or spend more money there.
“Depending on the industry, up to 29 percent of people are willing to pay more for simpler experiences and interactions; the amount they are willing to pay varies by industry but is significant,” the report said.
U.S. restaurant customers also said they would be willing to pay as much as 4 percent more for a dining-out experience if the offering were simpler. According to Siegel + Gale’s estimates, that could mean the potential for more than $3 billion in annual sales growth for the restaurant industry.
Siegel + Gale’s report also found that 75 percent of consumers are more likely to recommend a brand because it provides simpler experiences and communications.
“[Simplicity] brings clarity instead of confusion, decision instead of doubt, and the rewards are real,” the report said. “Simplicity inspires deeper trust and greater loyalty in customers and clears the way to innovation for employees.”
Siegel + Gale measured brands’ perceived simplicity by surveying more than 10,000 consumers in seven countries and asking them to rate those companies’ levels of simplicity or complexity in their products, services, interactions and communications. The resulting index scores ranged from roughly zero to 1,000, and restaurants like McDonald’s, KFC and Pizza Hut kept pace with other global brands like Amazon.com, Google and Aldi in terms of being viewed as simple.
As an industry, restaurants had the third-highest overall simplicity index score in Siegel + Gale’s global rankings, at 734 out of 1,000, placing behind Internet search companies and electronics manufacturers. The restaurants that placed among the 92 simplest brands in the study’s global rankings were McDonald’s, KFC, Pizza Hut, Burger King, Subway and Starbucks Coffee, at Nos. 4, 5, 10, 11, 15 and 17, respectively.
Succeeding with simplicity
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The report also took a look at what factors helped restaurant brands place higher in the simplicity rankings.
“Not surprisingly, [McDonald’s] gets high marks for speed and convenience,” the report said. “But McDonald’s also wins points for its accessible menu, transparent pricing and clear, concise messaging. And as concerns about obesity rise, McDonald’s is moving forward with redesigned packaging to include QR codes linked to nutritional information.”
Despite the food safety and avian-flu scares that have set KFC back in its crucial market of China this year, the brand still moved up 15 spots to No. 5 on Siegel + Gale’s global simplicity rankings, the report noted.
“[KFC’s] straightforward lineup of food and pricing, paired with roadside ubiquity and a successful online-coupon program, made KFC a favorite for many with an appetite for simplicity,” the report said.
Pizza Hut, which like KFC is a division of Louisville, Ky.-based Yum! Brands Inc., also received high marks from surveyed consumers about the brand’s accessibility and convenience, Siegel + Gale reported.
“With its memorable ads and made-to-order menus, it easily rises above the competition,” the report said. “Now, the brand’s website provides a completely fresh online experience, including the ability to place orders through Xbox Live.”
Winning over the domestic audience
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When focusing just on survey respondents from the United States, Siegel + Gale’s report found that restaurants performed even better as a category than they did in the global rankings, placing as the No. 2 industry with a index score of 844.
In the domestic rankings, restaurants placed behind only Internet search companies as a category. The individual brand rankings also shifted when accounting just for domestic consumers.
While McDonald’s was the top-scoring company among restaurants once again, ranking No. 3 with an index score of 897, Subway and Dunkin’ Donuts were right behind at No. 4 and No. 6, respectively.
Starbucks Coffee leapt ahead of the field to finish at No. 10 in the domestic rankings, followed by Pizza Hut and Burger King at No. 11 and No. 13, respectively. KFC fell to the lowest-scoring restaurant in the United States at No. 14, with an index score of 776.
Even though those giant brands have succeeded in earning loyal customers through their straightforwardness and transparency, Siegel + Gale’s report said there is potential for further simplification and thus further sales growth in the restaurant industry.
The report said brands could improve their measures of simplicity by providing “remarkably clear and unexpectedly fresh experiences” to stand out from the muddle of competitors with complex offerings.
Contact Mark Brandau at email@example.com.
Follow him on Twitter: @Mark_from_NRN