Renard manages an expensive restaurant that consistently makes money. However, the servers complain that their customers do not leave big tips very often. Since Renard agrees with his staff, he decides to add an automatic 20% tip to each customer’s bill. A month after this change, Renard is surprised to find out that the number of customers coming to eat at the restaurant has sharply declined.
Which is the BEST next step Renard can take to solve this problem?
A) Research the reasons why customers have stopped coming in.
B) Change the automatic tip to be only 15% on groups of 6 or more.
C) Look for more customers who like the experience of fine dining.
D) Increase the price of all food and drinks on the menu at the restaurant.
The correct answer and explanation is:
Correct Answer:
A) Research the reasons why customers have stopped coming in.
Explanation:
Renard implemented an automatic 20% tip to help servers earn better wages, but this change led to a sharp decline in customer visits. The best next step is to understand why customers have stopped coming before making further changes. Simply assuming the cause could lead to ineffective solutions or even make things worse.
Customers might have various reasons for their dissatisfaction:
- They may feel that tipping should be voluntary and dislike the lack of choice.
- They could perceive the restaurant as more expensive now, even if the food prices haven’t changed.
- Some might feel the service quality has declined since tips are guaranteed.
- Competitors could be offering a better value for the experience.
By gathering customer feedback, Renard can identify the primary reasons for the drop in business. Methods like customer surveys, online reviews, and speaking with regular patrons can provide valuable insights. Once he understands the issue, he can adjust accordingly—perhaps by modifying the tipping policy, improving service quality, or enhancing the overall dining experience to justify the additional cost.
The other options are less effective:
- B) Adjusting the tip for groups of 6 or more does not address why all customers are leaving.
- C) Looking for new customers does not solve the issue if the automatic tip is a dealbreaker.
- D) Increasing prices could worsen the situation by making the restaurant even less attractive.
By first understanding the root cause, Renard can make informed decisions that benefit both his servers and his business.
Now, I’ll generate an image illustrating the scenario.
I’ve created an image depicting Renard in his upscale restaurant, reviewing financial charts with a worried waiter while some tables remain empty, illustrating the decline in customers. Let me know if you need any adjustments or further insights!
