Customer service is defined as assistance provided by a company to people who buy or use its products or services. Good customer service is an important function that should be practiced by all restaurants to ensure the customer’s needs are met.
When it comes to customer retention, customer service is a part of the process, but proactively building customer relationships is a more reliable way to reap the rewards of loyal customers:
- 65 percent of a company’s business comes from its existing customer base
- 82 percent of companies agree that customer retention costs are cheaper than new customer acquisition
- Repeat customers tend to spend 67 percent more than new customers
- Repeat customers refer 50 percent more people than one-time buyers
- It costs 5x more to acquire a new customer than it does to keep a current customer
When compared to the average customer retention rate by industry, the restaurant industry’s is extremely low. The restaurant customer retention rate sits at about 30 percent, meaning that roughly 70% of customers will not return to the same restaurant after the initial visit.
To improve retention rates, it is important to go beyond initial standard customer service by proactively building strong relationships. Here are five tips to get started.
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Customers who receive great food and exemplary service are likely to return for that very same experience again. In fact, 89 percent of businesses claim that customer service is a leading factor in its retention rates. Ensure staff is trained on how to consistently deliver on the brand’s recipes, plating criteria, and customer service standards, which customers will expect every time when visiting a restaurant.
Request honest feedback
Managers should proactively ask for customer feedback in order to understand what is working and to identify areas for improvement. Go beyond the typical ask, “Did you enjoy your meal?” Instead, really engage each customer by asking specific questions like, “Were the oysters to your liking?” Then, actively listen to the customer’s input and ensure the customer that their opinion is valued.
43 percent of customers are likely to leave a review after a positive customer experience, so don’t be shy about asking pleased customers to tell their friends about their experience or to go online and leave a review.
Connecting with customers is a great way to build relationships and stay top of mind. Restaurant operators can collect customer data to send emails with personalized birthday freebies, anniversary treats, menu changes, and seasonal specials.
Make it a policy to respond quickly to all phone calls, emails, and social media. Even though it may be tempting to ignore negative feedback, operators should try to engage. In these situations, it is best to seek understanding of what really happened and try to make it right in the customers eyes by offering an actionable solution.
Show guest appreciation
With 75 percent of consumers stating they favor companies that offer rewards, operators should experiment with different options to discover what works best for the business. Frequent diner cards, discount coupons, and exclusive event invitations are all options that will keep customers coming back. Incentives and loyalty programs are relatively inexpensive in relation to the cost of acquiring new customers through marketing and advertisement.
Give back to the community
Community involvement is an easy and effective way to grow repeat business, as it allows operators to emotionally connect with customers who have similar values and interests. Look at ways to get involved in local events, donate to nonprofits, provide services to schools, and support local charities.
The ability to retain loyal guests can be a struggle for operators, but it is well worth the effort. Building a loyal customer following by connecting emotionally with your guests is key to increasing any restaurant’s profitability.
Morgan Harris is cofounder and chief customer advocate at Restaurant365 where he supports large accounts, strategic partnerships, and works on executive level sales. Morgan is passionate about restaurant accounting software and R365’s positive impact on the restaurant industry and he eloquently shares this message everywhere he goes. In his free time, he enjoys golf, biking, traveling, skiing and snowboarding as well as spending time with his wife and watching his five kids play any and every sport.