Restaurant Tip Management - PowerPoint

Document Sample
Restaurant Tip Management - PowerPoint Powered By Docstoc
					    Increasing Servers’ Tips



                 Ben Dewald
The Collins College of Hospitality Management
              Cal Poly, Pomona
                 Introduction
• Whether or not customers tip depends a lot on the
  service received, as well as whether or not they
  think they will be returning to the same
  establishment.
• Sometimes guests leave tips simply because it is
  expected.
• Believe it or not, a lot of research has gone into
  why restaurant patrons tip and what makes them tip
  more or less for similar service. Tipping is not
  always simply a sign of a job well done.
• This presentation will reveal some interesting facts
  about server habits that can boost tip percentages.


                                                   2
             Background
• In theory customers reward good service
  with money (Schein et al. 84; Lynn et al. 93)
But
• Bill size prominent variable affecting tip
  (Lynn & Grassman 1990; Lynn, 1988;
  Freeman et al. 1975)
• Servers tend to work for a 15 - 20%
  commission

                                           3
     The Global Perspective
• People from around the world give
  voluntary sums of money, called tips, to
  service workers

• Most service worker are tipped in
  America and Southern Europe
• Hardly practiced in Asia & Down under


                                             4
  Attributes Affecting Tips
Controllable & Uncontrollable
  – Related to service quality
  – Questionable service quality
  – Gender specific
  – Customer
  – Payment
  – Weather
  – Culture Specific


                                   7
    Related to Service Quality

• Server smiling at guests (Tidd & Lockhard,
  1978)
• Making extra visits to the table
  (Fitzsimmons & Maurer, 1991)
• Introducing oneself (Garrity & Degelman,
  1990)


                                          8
       Server Smiling at Guests
              (Tidd & Lockhard, 1978)

• Tested in a Seattle cocktail lounge
• Randomly assigned half to receive
  – Large, open-mouth smile
  – Small, closed mouth smile
  – Small smile average tip of 20 cents
  – Big small average tip of 48 cents
• Increase of 140%
• Encourage your staff to flash big smiles

                                          9
    Server Introduction
     (Garrity & Degelman, 1990)
• Good morning. My name is Kim & I’ll be
  serving you this morning. Have you ever
  been to Charlie Brown’s for brunch
  before?
• Large effect on tip
  – $3.49 (15%) with no name
  – $5.44 (23%) with name
• Earned $2 more
• Suggest your staff to introduce
  themselves professionally


                                        10
        Service ? Better Tips
• Casually touching guests (Lynn et al., 1998; Lynn,
  1996; Hornik, 1992; Stephen & Zweigenhaft, 1986; Crusco
  & Wetsel, 1984).
• Squatting at the table by servers resulted in
  larger tips (Lynn, 1996; Lynn & Mynier, 1993).
• Credit-card insignia on tip trays increased tips
  even when paying cash (Feinberg, 1986; Lynn, 1996)
• writing “Thank You” on checks also resulted in
  larger tips (Rind & Bordia, 1995).
• Giving candies

                                                     11
                      Touching
• Servers experienced a tip
  increase from 11.8% to
  14.8% of the check total
  when they briefly touched the
  shoulder of the customer.
• Both men and women left
  higher tips when touched,
  and although younger
  customers increased their tip
  amount more, all ages
  increased the tip by some
  amount.


                                  12
                     Squatting
• Two studies showed that
  serers who squatted next to
  the table when taking orders
  and talking with customers
  increased their tips from
  14.9% of the bill to 17.5% of
  the bill in one study, and from
  12% to 15% in another study.
• Apparently, the eye contact
  and closer interaction creates
  a more intimate connection
  and makes us want to give the
  server more money.


                                    13
  Credit-Card Insignia on Tip Trays
• Tested in 2 establishments
• When presenting bill on a tip tray
  with a credit-card emblem
  – Tips increased from 16 to 20% in the restaurant
  – and from 18 to 22% in the café
• Not due to increased credit card use all café
  customers paid in cash
• Start using tip tray w/ credit-card emblems

                                                 14
   Writing “Thank You” on Checks
• Tested at upscale restaurant in Philadelphia
• Randomly assigned lunch customers into 3
  groups
  – On the back of the check she wrote
  – Nothing, thank you, thank you & name
  – Average tip 16-18% w/ Thank You
• Encourage servers to write


                                            15
                      Giving Candy
• A study that involved giving customers a piece of candy
  with their bill showed an increase in tip percentage from
  15.1% to 17.8%. Another study in which servers gave
  each customer two pieces of candy with the bill
  increased the tip from 19% to 21.6% of the bill.
• Still another study showed that the way the server gave
  the customer the candy had the largest impact on the
  increase of the tip: This study had the server initially give
  each member of the customer's party one piece of candy
  and then "spontaneously" offer a second piece of candy.
  This method increased the tip to 23% of the bill!


                                                             16
            Gender Specific
• Waitress’s tips increased by drawing a happy
  face on checks but did the opposite for waiters
  (Lynn, 1996),
• Flowers in a waitress’s hair increased her tips
  (Stillman & Hensley, 1980) and
• Good looking waiters made more tips (Lynn &
  Latané, 1984; Lynn et al., 1993).
• Male customers tipped more (Lynn & Bond,
  1992; Crusco & Wetsel, 1984; Lynn & Latane,
  1984; Stillman & Hensley, 1980).

                                               17
    Drawing            on Checks
• Some waitresses draw a “happy face”
  on the back of their checks.
  – Personalize serve to customer
  – Communicate to customer server is happy
    to have served them
  – Make customer smile themselves
• Waitress 28-33%= +18%
• Waiter 21-18%= -14%


                                          18
  Payment/Customer/Weather
           Specific
Tips were higher:
– Paying by credit card (Lynn & Mynier, 1993;
  Garrity & Dengelman, 1990; Lynn & Latané,
  1984),
– People that have been drinking (Lynn, 1988)
– Regular guests (Lynn & Grassman, 1990).
– on sunny days (Crusco & Wetzel, 1984:
  Cunningham, 1979).


                                                19
  Tips for earning More Tips
ACTION                 Control   Experimental Increase %
                       Group
Intro self              15%         23%         53%
Squatting
 Waiter                 15%         18%         20%
 Waitress               12%         15%         25%
Smiling                 20C         48C         140%
Credit Card Insignia    16%         20%         25%
“Thank You” Check       16%         18%         13%
Draw “Happy Face”
 Waiter                 21%         18%         -14%
 Waitress               28%         33%         18%

Candy w/ Check         15.1%       17.8%        2.7%
                        19 %       21.6%        2.6%   20
                                                  (Lynn 96)
   Actions Not Additive
• More research needed to be certain but
• Likely that as tip goes up, so does
  resistance to further increases
• Combining actions that separately increase tips
  will probably not produce an even larger effect.
• Managers can maximize their servers’ incomes
  without encouraging them to do all the things
  discussed.
• Pick the ones you feel will work for you.


                                                     21
Questions & Answers

				
DOCUMENT INFO
Description: Restaurant Tip Management document sample