Customer retention plays a crucial role in the success of a restaurant. It is 6-7 times more expensive to acquire a new customer than to retain an old one. Also, old customers tend to order and spend more and are good for the business. It has been seen that a mere 5% increase in repeat customers increases profits exponentially. Loyal customers also refer their friends, and word of mouth is still the greatest, albeit difficult way of marketing. Read how to do Word-of-Mouth Marketing for your restaurant here.
How to Increase the Customer Retention Rate in Your Restaurant
While attracting new customers is vital for the restaurant business, it should never be done at the cost of old ones. Therefore, we have compiled a list of useful tips that can work as basic rules for retaining customers both old and new.
1. Outstanding Customer Service
It’s no rocket science- an outstanding service is definitely going to keep your customers coming back for more. Great food at a reasonable price, with a good ambiance and hospitality, completes a great dining experience. Ensure that every visit, be it the first, fifth or fiftieth, is consistently a good experience. However, outstanding service is a vague term. Customers’ expectations may vary from one another, but for retaining your customers you must ensure that the service provided is remarkable and to the best of your efforts.
- Not just the quality of food, but the quantity served and the price charged for it is also accountable for a great service. You must balance the portion size and the price charged for the item to keep your food costs in check, and also keep your customers happy.
- Next, no matter how delicious the food is, if your customers have to wait an hour just to be served an entree, they are bound to get annoyed. Make sure you don’t make your customers wait too long to be seated, or served.
- Ideal waiter to table ratio is also an important factor to consider. In casual dining restaurants where the service expectation is low and the volume of customers high, the ideal Table-to-Waiter ratio is high- 6 to 8 tables (seating an average of 4 people) per waiter. On the other hand, fine dining restaurants often have several courses and need constant supervision. In this case, the expectation of service is extremely high as the customers are paying significantly more, and any lack of service is frowned upon.
A personal contact with the customers also adds a lot to customer service, which is an important factor in customer retention. We have explained the point below.
2. Creating A Personal Touch
Customers are bound to return to a restaurant where they are treated specially. Train your staff to be hospitable and welcoming in little ways like greeting the guests when they walk in and seating them.
Customers feel at home if the host remembers their names or the waiter knows their favorite dish and ordering habit. Familiar waiting staff results in higher customer retention and engagement. It has been seen that a turnover in the waiting staff results in an overall decrease in profits.
Engaging in some polite small talk goes a long way in increasing customer delight and so retaining both old and new customers, but one must always take caution to not appear too imposing. Gauging the mood and behavior of the customer is also important, and must be done tactfully. Interacting with guests is an important part of etiquette training, and you must make sure that your waiting staff is fully trained before they begin waiting tables.
3. Constructive Use of CRM
Your Customer Relationship Management (CRM) software is your best friend when it comes to customer retention and engagement. It acquires precious data about your customers; their contact details, birthdays and anniversaries etc. You can use this database to engage with your customers. Send them birthdays and anniversaries greetings, and they’ll remember you when deciding on a place to celebrate their happy occasion.
POS integrated CRM also tells you about your customers’ preferences and their target needs, which you can use to run marketing campaigns, and helps you make informed decisions while planning your menu, or while implementing a new strategy.
4. Gathering Customer Feedback
Customer feedback is extremely important for any business, as it is the most honest source of feedback that helps identify your flaws and gives you an opportunity to correct the mistakes and grow. Asking for your customers’ feedback makes them feel valued. It is always a good idea for the host to pop up in between the meal, or at the end to ask if everything is fine. In case a guest is unhappy, you must make sure that the grievance is resolved immediately. Acting promptly upon the complaint shows that you value your customers’ feedback.
Customers are now using social media and restaurant review sites to leave their feedback and reviews about their dining experiences. Guests often look up the reviews before visiting a restaurant for the first time. Therefore monitoring customer reviews is crucial to the reputation of a restaurant. A review, either positive or negative, must always be responded to. Thank the user who has nice things to say about you, and invites them again to dine at your restaurant. In the case of criticism, even if you don’t agree with it, never lose your calm and politely address the issue.
5. Using Loyalty Programs and Offers
Loyalty programs have been long since used to get customers hooked and to keep them coming back for more. However, most loyalty programs fail due to their abstract nature and hence do not resonate with the customers.
Your CRM database plays an important role while creating loyalty programs. CRM integrated with POS can generate detailed reports about the preferences of customers. You can come up with relevant loyalty programs especially customized according to your customer base. You can also use the database to come up with customized deals and offers for your customers. Based on their ordering habits, you can send them an email or an SMS informing them that their favorite dessert is at a discount during a particularly slow day of the week, or send them a personalized offer or deal on their special occasion.
6. Effective Online Marketing
You can use online marketing tools to update your customers about your restaurant’s events. You can run email campaigns updating the customers about your restaurant. If a customer hasn’t dined at your restaurant lately, you can send them an email or an SMS saying that you miss them. Give the email a personal touch by offering customers a discount on their favorite item, or make it complimentary on a minimum bill, thus propelling them to visit. You can also send customized push notifications to customers on their mobile phones, and keep them regularly updated. However, you must also remember not to spam. Nothing drives customers away like spam does.
Social media campaigns are also an excellent way of marketing your restaurant. Facebook, and Instagram, Twitter, are some of the best platforms to run a contest. Check-in, tweet to us, upload a picture are some of the popular and successful campaigns of social media. Learn how to make the best use of social media marketing here.
Engaging with customers on social media in form of tweets and comment replies are also important to create a brand loyalty among the customers and increase customer retention.
7. Hosting Events
Restaurants employ many tricks to attract and retain customers. Hosting events such as calling a live band to perform or organizing a karaoke night is a great idea to attract customers and increase the customer retention, especially during the slow nights of the week. Ladies’ night, karaoke night, stand-up comedy night etc are all extremely popular among customers and organizing these give you an edge over your competitors. If your budget allows, you can also call in a celebrity DJ or singer, to draw in a crowd. You can impose an entry charge, and also come up with a special menu customized with your high-profit items. The probability of old customers attending such events is always higher than that of new customers.
Ultimately, your service and hospitality are what is going to generate repeat business for you, but these tips would certainly help boost the customer retention of your restaurant. With extreme competition in the restaurant industry, it doesn’t take much for customers to switch to your competitor. Employ these tips at your restaurant, and let us know how they worked out for you in the comments below!