Hang onto those valuable restaurant customers with these 6 must-do ideas
Like many restaurateurs, you probably work hard on your marketing to tempt new customers through the door. But what if that’s not always the best approach?
Marketers say it costs 5 times as much to acquire new customers as it does to retain existing ones. So it pays to think about an effective strategy to hang onto the customers you already have.
Why customer retention is critical to your business
Customer retention is all about increasing the lifetime value of your guests. Loyal customers tend to spend over 20% more per order than new customers.
How do you work out the lifetime value?
The lifetime value of your customer is the average order number x number of visits. So if a customer visits 5 times a year for 5 years and spends £100 on average, their lifetime value is:
5 visits x £100 x 5 years = £2500
But here’s an example of what happens if you run a successful retention strategy: the customer visits six times per year and you upsell them by £20 per order, giving a lifetime value of:
6 visits x £120 x 5 years = £3600
The great news is, to be effective you only need a small increase in your customer retention rate – a study found that even a modest 5% increase in customer retention can increase profits by 25% to a staggering 95%.
Tips to increase your customer retention
Giving consistently great service and serving delicious food is of course important, but these alone are not going to increase loyalty to your restaurant. With so many competing food outlets you will need to do more to stand out from the crowd.
Here are 6 must-do ideas:
1. Increase your online engagement
Restaurants are increasingly using online channels such as their website and social media to engage with their loyal customers.
The more successful brands are using social media as a platform to not only get their message out but also to encourage followers to create their own content about the brand.
This is a modern variation of word of mouth marketing, because authentic user-generated content has a huge reach. Also, as it has come from customers themselves it gives social proof about your offering – it’s genuine.
How can you encourage your diners to create user-generated content? Easy – create vibrant looking dishes and attractive interiors that look so enticing that they will want to share them on Instagram.
Another way to generate word of mouth buzz is to create competitions where the entrants have to share and like your post for a chance to win.
Check out our recent blog for some great Instagram hacks
2. Respond to customer reviews
These can also be a great opportunity for you to get close to your diners as well as being a great promotional tool. Given that 60% of people read online restaurant reviews it is a no-brainer to capitalise on them.
You may fear negative reviews but while they may hurt in the short term, it pays to be responsive long term – studies show 45% of consumers say that they’re more likely to visit a business if it actually responds to negative reviews. They also offer great source of feedback on aspects of your business that can be improved upon.
Rather than waiting for your customers to give you a review, actively encourage them to do so straight away. You can even leave a card for them to fill in with their details and review after their meal – a great source of testimonials and email addresses for your mailing list. Alternatively, email them or text them with a reminder.
Technology can help you to be responsive here. A mobile app enables you to quickly respond to customer reviews.
3. Create fun events
Another excellent way to increase retention is by hosting events and theme nights at your restaurant. You can even make it a regular event such as a quiz every Thursday or a having a DJ set once a month. Creating a sense of occasion gives them an excuse to visit for dinner while differentiating you from your competition.
A regular schedule of events will draw customers in on a more frequent basis and give them a memorable and positive experience about your restaurant. Make sure you promote it across all your social channels, to your email list and on your website.
4. Think outside the box
Offering new and seasonal menu items and blasting them out to your mailing list is a good way to keep your guests excited and engaged.
Before you do that, we recommend you run sales reports out of your restaurant EPOS software to see which menu items are already selling well, so they don’t fall victim to a radical overhaul.
Go one step further and really analyse your sales data. Are you seeing trends for more vegetarian items as part of a trend to healthy eating? You could test more vegetarian items on your menu and promote those to your customer.
Also, think about new ways of reaching your guests. Takeaway is big business and with technology you can easily offer your diners the convenience to click and collect or have a delivery. Integration with loyalty and marketing simplifies the process of providing them with tempting offers.
5. Run a loyalty programme
People are motivated by WIFM – what’s in it for me.
Studies have shown that 79% of consumers look for deals and rewards before making a purchase. Who doesn’t love a bargain?
Your customers are much more likely to keep coming back for more if they perceive that they are going to get something in return (as well as great food, of course!)
Running a loyalty programme is easy these days thanks to restaurant EPOS software technology.
A progressive restaurant EPOS software package will enable you to:
- Easily create customisable loyalty programmes
- Quickly offer instant discounts and gift card credit
- Offer loyalty bonuses
- Reduce admin
6. Smart marketing
Running events, offering great food, service and ambience as well as hosting enticing events is all well and good, but without effective marketing you may be leaving money on the table.
Increasingly, your customers are going to be found on social media as well as through more traditional channels such as email. With so many client touchpoints it can become time-consuming to manage them all effectively.
Having an effective guest marketing solution integrated with restaurant EPOS software can help save time:
Create enterprise email campaigns
– ideal for head offices to send targeted emails to all their customers
Send localised campaigns
– send emails at store level for a personal touch
– still a great way to reach your customers – send them a text!
Proactively analyse data
– tie it all together – align data from the restaurant EPOS software, loyalty, social media and email and see what campaigns are working.
With a great marketing technology stack you can get those key messages out and maximise your exposure across all channels simultaneously.
With so much competition, it pays to be proactive to attract repeat business.
A few small changes driven by technology can easily increase the lifetime value of your guests and help you thrive into 2021 and beyond.