Guest retention – transforming customers from one-and-done diners to regular visitors – has become a hot topic in the food service industry. And no wonder: The hospitality, travel, and restaurant industry has the lowest customer retention rate across all the industries surveyed by Shopify. That rate is 55%, which leaves a lot of room for improvement.
Add in the traditional wisdom that says it’s 5 times more expensive to get a new customer than to keep an existing one and the goal is clear. Restaurants need to work on customer retention. But while the restaurant industry is recovering from the effects of the COVID-19 pandemic, few operators have unlimited budgets. In this article, we’ll discuss seven ways restaurant operators can promote guest retention – without spending a lot of dough.
6 Strategies to Raise Your Guest Retention Rates
Connecting with customers is the critical part of increasing guest retention rates. So, how can you foster this sense of connection online, through apps, and in person?
Strengthen Your Loyalty Program
Loyalty programs are something of a pain point in the restaurant industry. For so many operators, these programs seem to underperform. At worst, they may even fail at their task of building connection and engagement. We’ve talked about why loyalty programs fail, so let’s talk about how you can use them the right way.
First, make sure your loyalty program supports digital interactions via an app or platform. This makes it easier for customers to track and redeem their rewards, which encourages them to use the program and keep visiting your restaurant. And make sure the rewards you offer are reachable and motivating to the customer; offering a vegan a free steak after 10 meals or promising a guest a free soft drink on their yearly anniversary isn’t going to work.
You should also collect and use the data from your loyalty program. This can help you personalize the rewards you offer, but it can also help you understand more about your customers’ actions and preferences.
Personalize Guest Interactions
Personalization has become an integral part of the customer experience – regardless of whether we’re interacting with an online service like Netflix, a massive retailer like Target, or a local coffee shop.
Thanks to online ordering, mobile apps, and loyalty programs – as well as customer data platforms that tie all that information together – restaurant operators can also reach a level of personalized interactions that wasn’t possible a decade ago.
If you’re looking for a low-cost way to increase guest retention, personalization goes a long way towards making a guest feel appreciated. Here are a few ways you can use personalization to reach your customers:
Send emails or app notifications with personalized offers based on each customer’s order history and preferences.
Create specialized rewards for customers’ birthdays and other meaningful events.
Send thank-you messages after guest visits that incorporate recommendations for their next order.
Using Customer Relationship Management (CRM) software will make collecting and using personalization data much easier. And it’s something that many restaurant operators already have, so it adds minimal expense.
Provide Flexible Online Ordering and Delivery
Not only has online ordering grown 300 times faster than in-person ordering, it’s now responsible for 40% of sales. It’s also a key touchpoint, a place where brands can make or break customer satisfaction.
Ensuring that your web or mobile ordering experience is intuitive and easy to use should be a number one priority. Fortunately, this doesn’t have to come with a massive price tag. Understanding the principles of user-friendly design is a great starting point. You can also add additional delivery options – including third-party delivery services – to give customers more flexibility and control over their experience.
Data is an integral part of this process. You can use it to understand guest preferences and patterns, choose menu items and optimize delivery menus, reduce delivery time, improve order accuracy, and even provide real-time order tracking to customers – all of which will endear you to them and promote brand loyalty.
Leverage Social Media and Online Feedback
Social media isn’t an option for businesses; as of 2023, 77% of businesses use social media to connect with their customers, and restaurants are no exception. Brands as diverse as Nando’s, Coke, and Wendy’s have all shown that real engagement can be accomplished on social media. What can we learn from them?
Be active on the social media platforms where your customers are.
Create content that’s on-target for your brand. It can be funny, sassy, wholesome, or whatever aligns with your brand personality. By giving yourself an authentic voice – and not trying to copy the competition – you’ll gain traction with your audience.
Don’t underestimate the power of images, user-generated content, and competitions/giveaways. These have been behind the most successful social media campaigns.
Show your audience some love by responding promptly to customer mentions, comments, and reviews. A prompt and empathetic response can turn a negative interaction into a positive experience.
Boost engagement by featuring customer stories and experiences.
Use social listening tools to understand consumer sentiment around your brand and track/analyze brand mentions.
In a similar vein, pay attention to online reviews. These come in two flavors:
The online surveys or in-app/on-website surveys you ask customers to fill out, and
The reviews customers leave on third-party sites like Yelp or Google.
Both can provide valuable feedback and insights that you can leverage to improve your customer experience.
Just as with social media, reply promptly and appreciatively to customer reviews. Responding to both positive and negative feedback shows your engagement with your guests and how much you value customer satisfaction.
Improve Decisions with Data Analytics
We mentioned this earlier, but data analytics is an excellent way to find insights that enhance guest retention. Using data analytics tools, you can spot trends, patterns, and correlations in customer behavior that will help you make better decisions. This can include analyzing customer purchase history and guest preferences to create better promotions and offers and using analytics to improve menu design.
Track key performance indicators during and after campaigns; this can provide critical information on the effectiveness of your choices and help you make adjustments as needed.
Pay Attention to Employee Training and Engagement
The secret ingredient to customer engagement and retention is not so secret: it’s their interaction with your employees. Whether that interaction is with a deliveryperson or with waitstaff in the restaurant, it’s an essential part of your customer experience.
To achieve the best guest interactions, staff need to be consistently and thoroughly trained. This can be accomplished through e-learning platforms and online training (which are cost-effective and promote a standardized level of service across restaurant locations) as well as through personal attention from supervisors and managers.
Finally, don’t forget about employee satisfaction. Happy and engaged employees lead to happier and more engaged customers. In addition to proper training, you can foster employee engagement through meaningful recognition programs, open communication, and providing feedback channels.
Better Guest Retention Rates Are Within Reach
These data-driven strategies can help you provide the kind of customer experience that encourages better guest retention. The more you understand your customers, the better you can connect with them, meet their needs, and become a regular part of their lives. This leads to higher customer lifetime values, reduced expenditures, and an overall uptick in revenue.
If you’re not sure how to capture your guest data or use the data you already have, contact Tillster today. We’ll be happy to explore your options and help you choose the systems and tools to reach your guest retention goals.
