Restaurants are cornerstones of American culture. We gather around tables in celebration and in grief. Eating is not only a necessity, it’s a part of our culture. Americans spent some $863 billion on dining out last year according to the Restaurant Association. Comparatively, that’s more than the federal government allocated for defense spending last year. How that money is distributed across the more than one million American restaurants is all about where diners decide to go. More than ever before, people defined as Millennials, born between 1981 and 1996, and Generation Z, born between 1997 and onward, are the key diners for restaurants.
The generations, which jointly comprise more than 130 million Americans, have a collective spending power that reaches into the trillions. Yes, that’s a T. They are more tech savvy, cherish authenticity, and have the buying power to make or break industries.
Winning them over starts with getting them in the door. We talked with people in both generations to hear about how they make the important decision about where to eat and find out what it means for restaurant owners and marketers.
How Word of Mouth Impacts the Restaurant Industry
Long before online reviews and internet apps showed us which restaurants are nearby, people found out about restaurants when their friends talked about a great dining experience they had. Word-of-mouth, despite its vintage vibe and abandonment of everything technical, has always been and remains the biggest way people find out about new restaurants. One survey finds that 91% of diners visited a restaurant for the first time purely based on a friend’s recommendation.
“Honestly, it’s word-of-mouth from friends and people who have lived in the area forever.” – Julie, 26
“Definitely what my friends say makes the biggest impact on if I am going to try a new restaurant or not, or really if I even hear about a new place to eat.” – Ashley, 32
Research shows that the same is true for places to avoid with 2/3 of people saying they would skip a restaurant if a friend gave negative feedback about it.
“If some random guy online doesn’t like it, then okay, that’s normal, but my friends are different. When one of them says it’s bad, I definitely listen.” – Jennifer, 34
What This Means for Your Restaurant:
You don’t have to recreate the marketing wheel entirely. The majority of people still hear about new restaurants and decide where to eat the good, old-fashioned way—word-of-mouth. That said, don’t rest on your laurels and think younger generations will come. It’s still important to understand how Millennials and Gen Z are different than previous generations and tailor your business to their styles.
They value experience and authenticity above all. This means that your business can’t be just a place to eat. It needs to serve up a meal in conjunction with a memorable experience. Everything from your physical location, waitstaff, menu, and even the music you play should align with the story your brand is telling. It all ties together to give customers an experience they are willing to recommend to their friends and loved ones. It’s a page from the marketing playbook that has stood the test of time.
They Did It for the Gram: The Role of Instagram in Restaurant Marketing
Rainbow bagels, black ice cream, unicorn lattes…the Instagram food craze colored social media feeds for years. Restaurants the world over created highly photogenic dishes with little regard for taste in an effort to drive influencers in the door and social media mentions through the roof. The fad was just that—a fad. But the one thing that remains relevant is Instagram. The platform still has immense power in business promotion, particularly in influencing people’s decision on where to eat.
“Instagram is really my go-to for everything. If I want to know what’s going on in town or want to check out new restaurants, my first stop is Instagram.” – Micah, 24
“I want to be part of that experience [on Instagram]. I am most drawn to restaurants that have a cool vibe, are in a cool area of town, would it be a cool experience for me? If I am going outside of my comfort zone, it’s more for the experience for sure.” – Courtney, 31
Of the 116 million Americans on Instagram, 90% of them are Millennials and Gen Z. Getting them to follow your brand is one thing, but the biggest key is getting them to engage with it. Commenting, liking, sharing, and tagging are 84 times higher on Instagram than on other social media apps like Twitter. Younger generations, especially Gen Z, rely on Instagram for all business information. They think of it as an extension of your website.
“I heavily rely on Instagram for hours, menu options, specials of the day, especially during these times. Did they post what their hours are since they’ve changed? Did they post about curbside pickup?” – Tara, 29
“If their Instagram page is out-of-date, and the first post is like from Christmas or something, then I am not going. It says to me that they don’t care about keeping it current. What else do they not care about?” – Loree, 28
What This Means for Your Restaurant:
The onus is not on users, it’s on you. Keeping your customers fulfilled doesn’t stop when they leave your restaurant. It’s now a continual responsibility you have to customers. Keep them informed about your menu, specials you’re running, how you’re celebrating events, and what they should know about your brand and the experience you provide. Don’t forget Instagram stories, too. They’re a great way to allow people behind-the-scenes and to give them a flavor of what goes into making the front-end look so majestic. Be creative. Be authentic. Show people what makes your brand unique. You’ll be rewarded with a waitlist of customers yearning to add you to their social media page.
Translating Yelp Reviews to Restaurant Revenue
Giving feedback has never been easier for customers. Good or bad, they can post their thoughts about any business in a matter of seconds for the world to see through the Yelp app. The third-party application aggregates the star-rating customers give businesses and posts their comments. It’s high on the Millennial and Gen Z priority list when it comes to looking for restaurants.
“Yelp is great. It shows me where the restaurant is located in relation to where I am, what people think about it, and even shows me which dishes people like. It helps me know what to order when I try a new place.” – Hannah, 29
“I would say, for a lot of my friends, Yelp is the first place they look. They even look up reviews on certain dishes at restaurants on Yelp.” – Allie, 26
A Harvard study found that a one-star increase in a Yelp rating leads to a 5-9% increase in revenue for independent restaurants. That can translate into some big bucks. Although business owners have been known to shake their fists at Yelp’s rating system—in 2013, The Washington Post claimed that some 700 restaurant owners filed complaints against the company—customers say they not only pay attention to what others say, but how you react.
“If they aren’t too busy to respond to the reviews, then you aren’t too busy to keep the restaurant clean and other stuff. It shows me that you’re doing things correctly.” – Chris, 33
“If there is a complaint about a problem, it doesn’t bother me because mistakes happen. I want to see that the restaurant is trying to make it right though by offering them a free meal or comping a dessert or something.” – Lindsey, 29
What This Means for Your Restaurant:
This can be both a blessing and a curse. The good thing is that you are not a victim of other people’s online rantings because they happened to come in on an off-day for your staff. The part that you can control is how you respond. If you see a review that is below your standards, extend a digital olive branch. Apologize that the experience wasn’t the best and offer to make it right. Remember that your comments are public too, so getting defensive or responding with snide remarks will only hurt you in the long run. Lead with kindness and humility just like you would if the person walked into your restaurant, because you never know when he or she will.
Creating and Documenting Restaurant Experiences are the Key to Reaching Gen Z & Millennials
Getting new customers in the door is the challenge of every business. Restaurants are not alone in that. Most everyone still puts a lot of weight on what they hear from their social circles. In a way, Instagram and Yelp are merely a digital extension of that. People are reading what other people said and experienced at your restaurant and factoring those sentiments into their decision-making process. You can help craft that narrative in your favor by serving up the best experience to each customer, creatively crafting your brand on social media while engaging with your followers, and humbly accepting feedback from your customers. It doesn’t matter what the age, every customer wants to support a business like that.
TLDR: How To Win Over Millennials and Gen Z At Your Restaurant
- Your future success largely depends on winning over Millennials and Gen Z. Born after 1981, they collectively have the spending power that reaches into the trillions.
- Their decisions on where to eat are heavily influenced by word-of-mouth, Instagram, and the third-party review app, Yelp.
- Younger generations value experience and authenticity above all else. Restaurants should cater to their style and focus not only on delivering a wonderful meal, but a memorable experience.
- Restaurants can proactively craft a narrative by delivering memorable experiences, a highly curated Instagram page, and graciously responding to online reviews.