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Restaurant Customer Retention – Simple & Effective Guide

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In the competitive food and beverage industry, customer loyalty and retention is the cornerstone of any restaurant business, and something that cannot be overlooked.

We at KlikNRoll have helped countless restaurants with this in the last decade, and we’re confident that we can help you out.

That’s why we made this article and we’re confident that we can help you out in this matter. Stick around, you might learn something new by the end of this article!

Practical Customer Retention Strategies to Follow

Create a Seamless Customer Experience & Journey

To keep those repeat customers coming back, you need to focus on creating a seamless and good customer experience at every turn.

Start by imagining yourself as the customer, and then embark on a journey to identify and eliminate any bottlenecks or speed bumps that might disrupt the flow.

The first step in this journey is to create a customer journey map. This map is your blueprint for understanding the entire customer experience that your diners go through.

Put yourself in their shoes and walk through every step, from their very first impressions of your restaurant to their interactions with your staff, the quality of the food, and even the ease of the ordering and booking processes.

Consider each touchpoint and interaction as an opportunity to leave a positive impression. Is your website user-friendly and inviting?

Are your staff friendly and provide good service? Is the ambiance of your restaurant comfortable and appealing? How straightforward is the ordering process?

These are just a few of the aspects you should consider when planning an exceptional customer journey.

To learn more about this topic, you can take a look at our dedicated blog post on the restaurant customer journey.

This article will provide you with more detailed insights on how to ensure that every aspect of the customer experience with your restaurant is as smooth as silk, making them want to return again and again.

A Customer Loyalty Program Does Wonders

Loyalty Program Statistics
You'd be surprised as to how effect they are!

When it comes to retaining customers and having a good restaurant customer retention strategy, a well-managed loyalty program emerges as a powerhouse strategy.

According to a 2020 survey conducted by McKinsey, loyalty programs are not just effective but can make a remarkable impact on your customer retention strategies.

McKinsey’s research reveals that members of paid loyalty programs are a whopping 60 percent more likely to increase their spending with the brand after subscribing.

In comparison, free loyalty programs, while effective, increase spending likelihood by 30 percent.

The value of paid a loyalty program becomes evident when they drive higher purchase frequency, basket size, and brand affinity compared to their free counterparts.

Points-based loyalty programs are a staple method for rewarding and retaining customers.

These programs allow customers to accumulate points with every purchase, and as they collect more points, they can redeem them for various rewards.

It’s a simple and effective way to keep your customers engaged and motivated to return.

Attendance-based loyalty programs, on the other hand, reward customers for their frequency of visits. The more often they dine at your restaurant, the more rewards they receive.

This approach encourages consistent dine-ins and can be especially effective for restaurants with a frequent customer base.

Now, let’s talk about the “loss leader” strategy, a concept popularized by the Costco food court.

The idea here is to offer certain items at a very low cost or even at a loss to attract customers. For instance, Costco’s famous $1.50 hot dog and soda combo is a loss leader.

Loss Leader Process Illustration
Here’s a simplified illustration on how the loss leader strategy works.

The key is that while these items may not be highly profitable on their own, they draw customers into the store, and once there, customers are likely to make additional, more profitable purchases.

You can apply a similar strategy in your restaurant by offering irresistible deals or discounts as part of your program.

These offers can entice customers to visit, and once they’re in, they’ll likely be ordering more, ultimately boosting your overall revenue.

Examples can be offering items like garlic bread, drinks, or even certain types of pasta. These items typically have better margins and/or are easily made in batches that don’t require too much extra effort.

Also, to kick-start your loyalty program, try using a lead magnet, such as a free appetizer or a special promotional drink, to incentivize customers to sign up.

This initial offering can serve as the gateway to your program or even your email list, enticing customers to join and begin enjoying the benefits.

You can also encourage them to leave online reviews with lead magnets!

In essence, a well-structured loyalty program can become a win-win for both your restaurant and your valued diners.

If you’re wondering, we at KlikNRoll have a robust loyalty program platform that can be customized to honestly, whatever you can think of!

You can include or remove any elements that you wish, track your customer’s spending habits, have your own automated promotional campaigns, and much more!

Häagen-Dazs, one of our biggest clients in Hong Kong uses our loyalty program to not only streamline their entire operation, and keep track of their program members – but also generate millions in revenue as a result! You can take a look at our case study on Häagen-Dazs to find out more.

Alternatively, you can click the button to contact us and we’ll take care of everything for you – no strings attached!

Provide More Value than Your Competitors

Customer Value in a Restaurant
Value doesn't always have to do with prices.

In the highly competitive restaurant industry, one of the most effective ways to keep customers returning is by offering more value than your competitors.

However, it’s important to understand that “value” doesn’t always translate to the lowest prices.

Instead, value can take various forms, all of which can make a significant impact on your customer satisfaction score.

To truly provide value, you need to go beyond the basics of good food and customer service. Consider what sets you apart and makes your restaurant a standout choice for potential customers.

But let’s dive deeper into the concept of value with a simple example. Imagine you and your competitors offer identical food items and portions relative to price. You’re also both on equal footing in terms of the customer experience.

However, you go the extra mile by providing a free dessert with every meal. It may seem like a small gesture, but it can be a decisive factor in the customer’s journey.

Customers often remember such thoughtful touches and are more likely to return, appreciating the added value you offer.

Even something seemingly small, like offering a warm towel when guests are seated, can create a lasting positive impact on how your restaurant is perceived.

These small gestures show that you care about your patrons’ comfort and well-being, and they contribute to memorable dining experiences!

Foster Customer Engagement

Customer engagement is a simple yet incredibly effective tool to maintain a strong bond with your patrons. There are various ways to achieve this, all of which contribute to a lasting connection.

One of the modern powerhouses for customer engagement is social media, with platforms like Instagram and TikTok at the core of it.

In recent years, these platforms have surged massively in popularity, and for restaurants, they offer a great way to enhance your online presence and attract new customers, all without breaking the bank.

The rise of short-form video content on platforms like TikTok is a trend you want to be a part of. Restaurants have been using these platforms to showcase to create unique, educational, and entertaining content in many different ways!

A great example is Shelby’s Canada, a Canadian Middle Eastern restaurant with over 2 million TikTok followers at the time of writing this article.

This kind of creative content can help you connect with your audience in a fun and engaging manner.

Another channel to consider is email marketing. Building and maintaining an email list can be a powerful way to keep your customers engaged.

Remember the loss leader strategy we talked about earlier, they can also help you build your email list, on top of a loyalty program.

Sending out promotions or updates via email is a great way that keep your restaurant top of mind.

The key is not to ‘spam’ your customers with emails; a well-timed newsletter, perhaps once a fortnight, is amazing.

Here’s a pro tip: Always include a clear call-to-action (CTA) link in your emails, redirecting readers to your restaurant’s booking system. This seamless process makes it easy for customers to book a reservation, turning their engagement into action.

But engagement isn’t limited to the digital realm; there are ways to improve it in person as well – like remembering small details about your customers or engaging in friendly conversation shows that you genuinely care.

As a restaurant owner or a member of management, networking and even forming friendships with your diners can lead to increased customer loyalty.

People often appreciate the personal and friendly nature of local restaurants over faceless franchises, so make it a habit to have a friendly chat with your customers!

Give Back to Your Community & They Will Return the Favor

Benefits of Restaurants Giving Back to Their Community
Giving back to your community will lead to more loyal customers!

When it comes to retaining customers most genuinely, giving back to your local community is a great way to do so.

It’s a strategy that can truly earn your customer loyalty and keep them coming back, yet it’s underestimated by many restaurants and businesses.

Think about it: restaurants primarily serve the local crowd. These are the folks who keep your business thriving day in and day out.

So, embracing your community and actively contributing to its well-being can be a game-changer.

One impactful way to give back is by organizing food drives. Not only does this help those in need, but it also highlights your restaurant’s dedication to making a positive difference in your community. It’s not just about great food; it’s about being a great neighbor.

Catering local events is also another fantastic strategy. This is another step for the lead magnet strategy we discussed earlier, catering allows for more people to try your food and there’s a great chance that many of them will become loyal customers!

Placing your name cards on the food tables not only ensures everyone knows where the food are coming from but also sparks conversations about your restaurant. 

Word of mouth is a powerful advertising tool! Plus, they’ll know exactly where to find your business.

If you have your service staff helping out, it’d be great if they could offer great service and gather feedback – as those can go a long way in helping attract new customers or improve your current customer retention rate.

Here’s another pro tip: when you’re involved in these community activities or catering local events, try to get the event organizers to link to your restaurant’s website from theirs. It’s not just a friendly gesture; it’s also a strategic move to boost your online presence.

As a result, your restaurant becomes more prominent in Google search results, which is invaluable in this digital age.

In a nutshell, giving back to your community is not just about business; it’s about building meaningful connections and strengthening your local reputation.

It’s the kind of genuine approach that can turn one-time customers into lifelong advocates of your restaurant.

Track and Utilize Customer Feedback

When it comes to customer retention strategies, listening to and acting on customer feedback stands as the cornerstone.

No matter how much you give back to the community or how engaged your customers are, none of it matters if your food and services fall short. That’s why paying close attention to customer feedback and taking swift action is important.

The key is not to make sudden changes to every single customer complaint but to identify trends and common issues.

For example, if multiple customers mention that the soup was too salty during a particular service, it’s a clear signal that something needs to be addressed. These trends indicate areas that require your attention.

In this digital age, customer feedback is readily available on platforms like Yelp, Google, and TripAdvisor.

It’s important to keep a vigilant eye on each review and, when possible, respond to each one. Your acknowledgment and willingness to address concerns not only show you care but also demonstrate your commitment to improvement.

Another valuable tool for gathering customer feedback is the Customer Satisfaction (CSAT) form.

These forms allow customers to rate various aspects of their experience, including food, service, ambiance, and more on a scale from 1 to 5. Incentivizing customers to provide feedback can be a powerful motivator. Gradual improvement often relies on constructive input.

Here’s a sample that we made:

CSAT Customer Satisfaction Survey Form Template for Restaurants
Feel free to download this and use it for later!

Remember the loss leader strategy we discussed earlier? You can apply it here too. Encourage existing customers to fill out these forms by offering small treats, like a complimentary drink or a voucher.

Customer feedback and data are incredibly important for virtually any business, and it’s the reason why large companies are willing to invest substantial sums in acquiring them.

Why are Repeat Customers Important for Restaurants?

Repeat customers are like the heart and soul of any thriving restaurant, and their significance goes beyond just numbers.

They’re the kind of diners who truly make a difference for your business, and here’s why.

First, they’re cost-effective. It’s way cheaper to keep these familiar faces coming back than to constantly chase after new customers.

An article by the Harvard Business Review even suggests that retaining a regular customer can be up to 5 to 25 times less expensive than trying to win over a newcomer.

So, holding onto these loyal folks is not only smart but also budget-friendly.

What’s even better, repeat customers often turn out to be some of your best spenders. They develop a special connection with your place over time, and that connection can lead to bigger and more frequent orders.

They’re not afraid to explore your menu, try out new dishes, and treat themselves to extras, which boosts your earnings and average spend per customer.

But here’s the icing on the cake: repeat customers become your unofficial marketing team. Word-of-mouth is like a secret weapon in the restaurant world, and these satisfied regulars become your biggest advocates.

They’ll tell their friends, family, and co-workers about your restaurant, and that kind of genuine enthusiasm is a powerful way to attract new business.

For restaurants, repeat customers are also the key to keeping your tables busy during those slower hours.

By offering them cool perks like customer loyalty rewards or special deals, you can balance the flow of customers throughout the day.

This means you can count on a steady stream of income, even when things are usually a bit quieter.

In a nutshell, customer retention/repeat customers are the lifeblood of restaurants. They save you money, increase average spend per customer, and will recommend you to their peers.

Plus, they’re the ones who will give raving reviews online – which is a nice bonus!

So, don’t just see them as customers; they’re essential to your success in the restaurant business!

Conclusion - Bottom Line

With these actionable steps, the last thing you’ll need to do is measure the customer retention rate, whether it’s through a dedicated CRM or just keeping track manually.

We have to emphasize again that data and feedback are extremely important, not just for customer retention rate, but for your business health overall.

If you’ve enjoyed this article, and want to learn more about our loyalty program solution, contact us using the button below and we’ll settle everything for you!

Last Updated by January 23, 2024

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