Whether you are looking to open a new restaurant or have been running one for some time, you must have a plan to make profits. And one of the most important things that help generate consistent revenue is a regular inflow of customers and your loyal customer base. But given how competitive the retail F&B industry is, customer retention is big challenge businesses face.
Customer retention refers to your restaurant’s ability to develop repeat business. Simply put, make them keep coming back to you!
Why is Customer Retention Crucial For Restaurants?
As per Harvard Business Review, acquiring new customers is 5 to 25 times more costly than retaining an existing customer.
- Repeat customers account for a considerable chunk of your revenue, making customer retention and loyalty a top priority for restaurants
- Loyal customers + Repeat continuous sales = higher profits
- A loyal customer base is more likely to give you honest feedback and do some much-required word-of-mouth marketing
- Develops that sweet, sweet restaurant goodwill
It becomes highly critical that you notice if customer attrition is taking place in your restaurant. If it is happening, it is equally pivotal that you understand the reasons for the same!
Causes of Poor Customer Retention In Your Restaurant
1. Customer Service Quality
A big cause your customers not coming back to your business is the quality of your customer service. One bad experience and they may never return to you. Customer service in a restaurant business consists of staff courtesy, communication, waiting, etc. You can take the following steps to improve the quality of your customer service.
- Make your staff go the extra mile with tiny yet effective gestures wishing your customers, asking them if they need something.
- Please pay attention to the time taken for each food order; it should be quick and tasty.
- If the customer complains about something, acknowledge, apologize and try to make up for it.
2. Food Quality
The primary reason for visiting a restaurant is the food, so how can that be bad? Food quality is your USP in the restaurant business; it defines your restaurant. We understand it might be difficult to manage food quality during busy hours; however, your food quality should not be affected at any cost! If your food quality drops, say goodbye to your customers.
USP is a Unique Selling Point, a unique aspect of your restaurant that differentiates you from others.
According to a survey conducted by Deloitte, few things matter to most customers in a restaurant; besides the quality of service and food, it is your pricing. It plays a massive role in winning customer loyalty.
People are not likely to revisit you if your prices are exorbitantly high. People generally look for affordable places to visit regularly. Offer different price point items, and inculcate some lower price point items.
4. Your Menu
Your menu is not just some piece of paper; it is the soul of your restaurant. If your menu does not offer enough options, it does not provide your customers with enough reasons to revisit you. It is a high time you upgrade your menu! Provide all sorts of options in your menu for your target customer base. For instance, given the rising trend for conscious and healthy eating, your menu should have vegan options.
5. Cleanliness & Hygiene
You do everything right, serve delicious food, on time, at the right price, but customers get a soiled napkin or see your overflowing dustbin; poof, they are gone. Unhygienic conditions in a restaurant take away all the pleasure of eating good food. Maintain the highest level of cleanliness in your restaurant to ensure regular customer visits and satisfaction.
Why do you think consumers love and are loyal to brands like Mcdonald’s and Domino’s? It is not just their taste, but also the consistency of their taste! You may lose consumers if your customers cannot rely on your taste. Moreover, it is not just your taste that needs to be consistent, but also your service and other offerings. For repeat customers, it is imperative to ensure a consistent experience for your customers.
7. Customer Loyalty Programs
When you offer some rewards to your customers to return, they are more likely to return! A loyal customer base needs to be nurtured and told that they are valued. If you do not have any customer loyalty programs, it is your chance to start some. You can run different customer loyalty programs like a point-based program (every time they spend some money, they earn some points) or discount coupons.
To know more about customer loyalty programs, read our blog here.
Restaurants often do not realize the importance of collecting regular customer feedback. Ignore this, and lose out on customers without even realizing why. It is essential to understand from the consumers themselves what is working for them and what is not. Create a customer feedback form to receive continuous customer feedback.
Developing a loyal customer base and focusing on retention is key to regular profits for your restaurant business. Pay attention to the above points and watch the money roll in.
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