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June 7, 2021  

It’s a jungle out there and businesses are constantly competing with each other to not only get new customers, but retain previous ones.

If you’re asking yourself the question, how can I increase customer retention? Then look no further - here is a list of the five best strategies your restaurant can implement to ensure customers stick around for the long haul.

Why is customer retention essential?

Firstly, it’s important to understand why customer retention is crucial in allowing a business to thrive. If you increase the number of returning customers by 5%, this can affect your sales growth up to a whopping 75%.

The truth of the matter is regular customers provide a consistent profit stream and usually spend more than new customers. Returning customers also tend to tell their families, or friends about your business, resulting in word-of-mouth advertising.

Data also suggests existing customers are 50% more likely to try a new product at your restaurant and will spend 31% more than new customers. 

Now, let’s look at how you can maximise customer retention for your business:

1 - Loyalty

This one is a no-brainer - loyal customers boost sales and it’s much cheaper to retain customers than get new ones. There are multiple ways restaurants, cafes and other businesses can influence customer loyalty. Implementing a loyalty program is something that should not be overlooked; if you haven’t done so already, get your business an app and make sure it’s a good one.

There are a variety of loyalty programs you can offer via an app. One of the most common features utilised is a digital punch card, yes just like a coffee card. This can be modified to include an offering of a free item - once a customer has dined several times, of course. Furthermore, you can use the app to offer special discounts, buy one get one free offers and refer a friend. 

It’s important to still maintain and honour loyalty programs which are manually recorded, such as punch cards. These are still worthwhile and many customers prefer this method, especially if they’re not digital natives.

2 - Great Customer Service

This starts with making sure your staff are happy because the happier a staff member is, the better they will perform. This is one of the key things overlooked when building a successful restaurant - ways you can improve staff morale could be acknowledging employee achievement and paid sick leave.

A positive experience is going to make or break your relationship with customers and determine whether they come back; ensure staff are providing a warm and friendly environment while also attending to all the customers needs. This also starts with good training, which means teaching staff to speak well, maintain eye contact, remember names of regular customers and vibrant personalities.

3 - Utilising CRM

Customer Relationship Management software is extremely important - as the name suggests, it’s there to build/maintain your relationship with the customer. CRM provides businesses with information such as contact details, purchase history and preferences, which can all be utilised to engage with customers on a more personal level. 

The information gathered can then be used to create emails generated on certain dates, such as birthdays and anniversaries offering customers special offers, discounts, or free items. You can also use this data to send out newsletters, recipes, or blogs. This further strengthens your relationship with the customer and works as a drawcard to prompt them into dining at your establishment.


4 - Engage with Customers via Social Media

When you reach out to your customers via social media, you’re engaging with them on a more personal level. Not only that, it enables you to chat with customers, or potential customers in real time while also providing them with a space to connect with other customers.

One trick is to identify your most loyal customers so you can send them personal thank you messages for their continued business. Customers will love receiving messages like this as it shows you value them. You can further elevate this technique by offering discount coupons and other incentives.

5 - Transparency 

In this day and age, customers appreciate a business which is completely transparent when it comes to what’s in their food. This means providing information such as ingredients, nutritional information, allergy possibilities and the origin of the food. This is because customers are greatly concerned about the quality of food and they want quality. A strategy you could implement in this instance is keeping customers updated on your journey to source healthier ingredients.

How to measure customer retention rate?

If you want to know how to measure your customer retention rate, the best method to start with is the customer churn rate; this means determining when a customer stopped doing business with you.

The churn rate is different to the retention rate, which refers to when customers return for business. Therefore, you’re able to use the churn rate to determine the retention rate; as a high churn rate results in a low retention rate.

Next steps….

This is only just scratching the surface when it comes to effective customer retention strategies for restaurants. If you’re not doing so already, start to implement one or all of these steps to determine what strategies work best for your restaurant.

In the end, what it comes down to is you providing a reason for customers to want to come back. 

Did You Know?

The increasing the number of loyal customers by 5% can affect your sales growth up to a whopping 75"%