Today, establishing good customer retention strategies in the restaurant industry is a real challenge. Imagine the following scenario: your restaurant offers a varied menu, excellent meals, and a trendy atmosphere. Yet, few guests come to eat at your establishment. As months go by, you notice that the volume of Google reviews for your restaurant is stagnant, and hardly anyone seems to be praising your business online.
How can you improve the customer retention strategies of your restaurant to gain a better reputation and keep your customers? Offering quality experience by improving your relationship with customers is crucial.
Your guests don’t just come to your establishment to eat; they want to have a unique experience and feel listened to and appreciated. Establishing a relationship of trust and creating an unforgettable experience is critical to improving customer retention.
Customer retention plays an essential role in every business, and that includes restaurants. However, restaurants typically can’t afford to invest as much in their marketing as other businesses, like SaaS businesses or eCommerce businesses.
1. Sustainable Income Generation
Repeat customers generate significant income in your restaurant. They tend to spend more every time they visit than first-time customers. Aside from that, repeat clients are most willing to recommend your restaurant to all their friends and family, which helps you build higher levels of recurring revenue.
2. Lower Marketing Costs
Winning new customers is usually very costly in terms of marketing. A focus on retaining existing ones will reduce this cost. When you maintain your existing ones, you tend to spend less money on advertising and other forms of promotion since your satisfied customers will help promote your restaurant.
3. Improved Reputation
Loyal customers turn into your best ambassadors. They will share positive reviews and experiences with others, which is a form of word-of-mouth marketing that is effective and powerful but incurs little or no cost. Customer retention strategies, such as fostering positive reviews and recommendations, help bring new customers to your restaurant. This builds up credibility and strengthens your restaurant’s presence in the community.
A restaurant loyalty program can increase customer retention by capitalizing on three essential psychological motivators:
1. Motivation
Motivation is a key component of any successful loyalty program. To drive customer engagement and repeat visits, your restaurant's loyalty program should include specific rewards that customers can earn for their actions. For example, offering loyalty points for every purchase can motivate customers to return frequently to accumulate more points.
According to research, 68% of customers report that they would visit restaurants with rewards programs more often. It's crucial that these rewards are both attainable and appealing. If the rewards are too difficult to earn, customers may lose interest in participating. Therefore, ensuring that rewards are accessible and valuable will keep your customers motivated and encourage ongoing patronage.
2. Structured Programs Lead to Greater Investment
A structured loyalty program is more likely to drive long-term commitments. Given their accruing points, your customer will be further invested in your restaurant and less likely to switch to a competitor.
In addition, guests who join loyalty programs visit restaurants 20% more often than non-members and spend 20% more, according to Lee Barnes, Paytronix's Chief Data Officer (CDO) in an interview with QSR Magazine. These types of commitments are crucial to locking down future business, maintaining a steady cadence of return traffic, and amplifying profitability.
3. Exclusive Offers and Promotions
A loyalty program can offer exclusive deals and promotions to its members, which makes them feel special and appreciated. For example, you could provide early access to new menu items, special discounts on birthdays, or members-only events. These exclusive benefits not only attract customers but also make them more likely to return to enjoy the perks. Implementing effective customer retention strategies, such as this sense of exclusivity, can strengthen the bond between the customer and your restaurant, leading to increased retention.
When the coronavirus pandemic of 2020 led to lockdowns, most consumers shifted from physical stores to online shopping. A whopping 90% of North American Internet users shopped online in 2020, and 60% of worldwide Internet users bought goods online during the same time frame.
This rapid increase in online shopping meant that hospitality businesses and retailers needed to adjust their business models to cater to new customer needs. From mainly focusing on acquiring new customers, in 2020, it became all about retaining existing ones. To continue achieving this effectively, your restaurant should pay more attention to the three pillars of customer loyalty: simplicity, trust, and recognition.
1. Simplicity
The ease with which your customers can go through your checkout process is more valuable than many restaurant owners realize. Navigating your website and making a purchase should be smooth and glitch-free. Simple, straightforward systems keep your customers coming back for more.
2. Trust
Building trust is vital for customer retention. Ensure secure transactions, high-quality products, transparent communication, and reliable service. Beyond this, restaurants can build trust by consistently delivering quality, personalized experiences, engaging with their community, and actively seeking and addressing customer feedback.
3. Recognition
The feeling of being individually acknowledged makes customers more loyal to your restaurant. Recognize their previous purchases and celebrate milestones and offer special deals to them.
Any restaurant needs to know why customer retention is essential to them. Here is why it is so crucial:
1. Sustainable Income Generation
Repeat customers can generate a lot of income in your restaurant. They tend to spend more every time they visit than first-time customers. Aside from that, repeat clients are most willing to recommend your restaurant to all their friends and family; it can help you build up a continuous stream of income.
2. Lower Marketing Costs
Winning new customers is usually very costly in terms of marketing. A focus on retaining existing ones will reduce this cost. When you maintain your existing ones, you tend to spend less money on advertising and other forms of promotion since your satisfied customers will help promote your restaurant.
3. Improved Reputation
Loyal customers turn into your best ambassadors. They will share positive reviews and experiences with others. It is a form of word-of-mouth marketing that is effective and powerful, but little or no cost is incurred. Implementing effective customer retention strategies can increase this process. Positive reviews and recommendations from loyal patrons bring new customers to the premises, building up credibility for your restaurant in the community.
Asking for feedback from customers shows them that you care about them, and their opinions, and that you monitor Asking for feedback from customers shows them that you care about them and their opinions and that you monitor reviews—all of which are crucial. If customers know you take their views seriously and make changes based on what they suggest, they are more apt to come back and can improve.
Email marketing is one of the best ways to acquire new customers and repeat visits. Customers often appreciate emails regarding your changes to menu items, special offers, and events. Sending personalized emails to them will make your customers feel worthy, and the messages will keep your restaurant top of mind. You can send targeted messages to your targeted audience by segmenting your email list based on customer preference and behavior.
Restaurant CRM systems enable restaurants to track and understand customer preferences and behaviors. With this software, targeting marketing at specific customers and letting them feel wanted and appreciated is easy as cake. You will be able to make informed personalization in communication and offers since you will be collecting data regarding customer visits, preferences, and feedback. It will also be easier to outline the bigger picture of trends and patterns so that you can make better decisions regarding your marketing and retention strategies with the help of a sound CRM system.
Through authentic social media engagement, you can build a community around your brand. The best way to do it is to share some exclusive offers, showcase new menu items, or simply hear them out and speak with them directly. After all, everyone loves to get rewarded. You’ll be able to build a very loyal following by posting engaging content and responding to comments and messages regularly.
Customer retention involves consistently excellent experiences for as many of your customers as possible. Ensure your employees are adequately trained to deliver superior customer service by providing friendly support, paying attention to details, and responding promptly to requests. All customers will feel welcome and valued when an uncommon level of effort is used, making them want to return and revisit.
A superior customer experience is determined by adequately trained personnel. Invest in training programs on how to be prepared with food and presentation in mind, as well as how to handle and resolve conflicts. Well-trained employees will be more confident in their workability, adding to the overall experience your customers enjoy.
While loyalty program design varies, two of the most common structures in which members earn rewards are based on a spend-to-point ratio or by rewards per number of purchases. A customized dollar-to-point earn ratio could be 10 points earned equals $1 in rewards or rewards based on making a certain number of purchases, such as buying nine to get the 10th free. These reward structures are easy for customers to comprehend, which is why they’re so timeless and successful.
Paytronix offers a feature-rich CRM to enable your restaurant to deliver outstanding customer experiences. Our platform helps you convert individual visitors into loyal customers by improving overall customer retention if done correctly·
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To keep customers coming back long term, remember it goes beyond offering rewards and running marketing campaigns. If you provide a web-based app to access your customer retention strategies, this can be achieved.
Nowadays, your customers expect most of your business’s information to be available online, and over 70% of them can say that it’s essential to be able to redeem rewards through digital channels. Increasingly, people are interacting with restaurants online rather than in person. Having a mobile app can meet these needs by offering an immediately convenient experience.
Try tools like our guest management solutions to make your restaurant stand out and become local customers’ favorite spot! Or book a demo now to see our platform’s full capabilities from top to bottom.