Customer Retention for Restaurants: Everything You Need to Know

No matter what kind of restaurant you’re operating, you would want your first-time customers to turn into your lifetime fans.

But what if your food is great, ambience is nice, location is accessible and you still don’t see many customers visiting for the second time?

Don’t worry—you’re not alone. Building a relationship with your customers is a continuous process and today we’re talking about all you can do to make them come back again and again.

Focus on customer retention:

Look at your city – there are thousands of restaurants around. With so much competition out there, your current customer base is the real asset for your business.

Your customers know you, and if they like your service – they become your brand ambassadors – for free. They talk about you. They recommend you. They keep coming back.

When you focus on improving the experience for them, it can be a powerful way to increase revenues for your restaurant. In fact, Harvard Business School reports that increasing customer retention rates by 5% increases profits by 25% to 95%. Now that’s a huge margin that you wouldn’t want to miss.

Customer Retention for Restaurants
Source: Harvard Business School

How to keep your customers coming back for more:

We have to accept that it takes a lot more than just good food to get repeat business these days. Your customers need a connection, a feeling of belonging and being appreciated.

The big picture of customer retention lies in two things:
1. Creating value for customers
2. Making their life easy

Doing this is simpler than you think. Here are some tangible ideas to start with:

Use Technology

Data says – 73% of the people agree that technology has improved their dining experiences. Be it functions like online food ordering, online reservation or simple things like providing free-WiFi in the restaurant premises – they all add up to your customer’s experience and ultimately retention.

Using an effective Restaurant POS system also leads to better communication between the customer and kitchen. In short, with the right technology, you can make informed decisions and keep the customer’s interest at heart.

Listen and Always Ask for Feedback

Always respond to reviews and queries whether on your social media handles or other websites. Timely replies and appreciation are the keys to get happy customers. At times, it is inevitable that you’ll receive some negative feedback so have a strategy in hand to respond to them.

#Tip: If you aren’t getting much feedback, use a restaurant feedback management system. Remember, it’s not your customer’s duty to offer feedback but your responsibility to ask for one. Offering small incentives (discounts, free dessert/drink etc.) in return can encourage customers to respond more.

Check out this resource on 7 reasons why you should be collecting feedback at your restaurant.

Reward for Loyalty

Let’s face it – your customers need some encouragement to come back again and again. Restaurant Loyalty Programs  help for the same. They build a database of customers and help in nurturing the relationship with them.

Offers for Loyalty Program
Offers for Loyalty Program

Here are some ideas that can be used for your own restaurant loyalty program:

  1. A free item on the guest’s birthday
  2. Invites to special events/days
  3. Exclusive coupons for particular menu items
  4. Discounts in return for referrals
  5. A free meal after a certain number of visits

Check out this Free Resource: Timeless Loyalty ideas for your restaurant

Use Effective Marketing

Effective marketing is the backbone of your retention techniques. Use social media to stay connected with your customers. A strong social presence is a great way to benefit from by sharing food photos and new offers. Another important tactic is establishing an email list and communicating through it.

While online marketing works great, it’s always good to use offline methods like supporting local artists, musicians, and businesses for their events and in turn getting new people to visit your restaurant. You’ve to experiment and find out what mix works the best for you.

Struggling to make your Restaurant CRM work? Check out this article

Provide the Best Service

There’s no alternative to excellent service. Customers appreciate consistency and friendliness and your managers/servers play a very important role in this.

Good service for customer retention

Here are some small examples that make a big difference in your service strategies:

  1. Always greet customers with a smile
  2. Remember repeating customers by face or name
  3. Offer live music and great ambience
  4. Balance prices according to portion sizes
  5. Never keep your customers unhappily waiting
  6. Celebrate birthdays or anniversaries

 

At times, you’ll even have to tackle a problem/complaint. Try to resolve it effectively. It’s the key to turn an unhappy customer into a loyal one.

Once you start implementing these strategies, you’d want to know the results.
Good news: you can track them all along. Let’s see how!

Tracking customer retention

To answer all questions regarding your restaurant’s customer retention, you first need to understand certain metrics. When you analyse these metrics, you’ll be able to determine a strategy that has a significant impact on your restaurant’s revenue and profits. Let’s understand what they are:

Repeat Customer Rate: It specifies the percentage of customers willing to visit your restaurant for the second time. It’s a simple calculation. All you need to do is divide the number of customers with more than one visits by the number of unique customers.

Order Frequency: This is calculated by simply dividing your restaurant’s total number of orders by the number of unique customers.

These metrics should be calculated in the same time frame, ideally each month. The higher they are, the better it is for your restaurant. Determining them requires robust data support that stable order management and POS system can help you maintain.

Want to get customers back to your restaurant? Here are some win back campaign ideas

What strategies do you use for customer retention?

If you’re already implementing strategies for customer retention, I’d love to know what works for you the best. If not, hope this post will help you get started.

Ultimately it all boils down to creating value for your customers and in-turn keeping them for life. A happy customer who brings other happy customers. Is there anything more important than that for your restaurant? I leave this up to you to think.

Customer Retention for Restaurants: Everything You Need to Know
3.1 (62.16%) 37 votes
Niharika Maggo

Niharika Maggo

Niharika is a Content Marketer at LimeTray. When she’s not busy wearing down the keys on her keyboard, she's found listening to podcasts, reading or drinking tea. She can be reached at marketing@limetray.com.