Restaurant customer retention is the measure of how well you create loyal repeat customers for your business. A lot of factors go into retention, including menu, server performance, and marketing insights. At Upserve, customer retention is a big deal and we’ve built tools to help business owners not only track this key metric but also improve upon it. While retention is important at any point, it is especially necessary now during this pandemic, while many restaurants are struggling to survive.
Keeping the customers you already have happy is important, they are the backbone of your business providing a regular stream of revenue and generally out-spending newer customers. But business owners also need to attract those new customers in order to grow sales. Well, we have good news: if you make customer retention a focus for your business, the customers you retain will actually help you spread the word and attract new customers to your business.
Increasing customer retention rates by 5% increases profits by 25% to 95%. – Harvard Business School
How to Track Restaurant Customer Retention
At Upserve, we measure customer retention over a minimum of 90 days. Once you’ve brought a customer in twice within a 90-day window, we consider them retained. Upserve HQ will also tell you how many new customers you’ve brought in during any given period and even how spending habits differ between new and repeat customers.
It’s difficult to pinpoint a single factor that leads to restaurant customer retention all on its own. Retention is more accurately described as the result of many interactions with your business over time. But there are some important areas you can focus on to affect your success in bringing customers back.
…businesses with 40% repeat customers generated nearly 50% more revenue than similar businesses with only 10% repeat customers.
At Upserve, we look at specific menu items ordered, server interactions and even the marketing campaigns and promotions that aided in retaining a customer. By looking at all of these factors together you can paint a picture of what brings people back most often and start to make changes to do it better.
3 Ideas for Improving Restaurant Customer Retention
1. Put Service First
The right service can make all the difference in creating a great first-time experience at your establishment. Be sure your servers are guiding new diners to the dishes you’re known for and those that are particularly good at retaining customers. Also be sure servers promote specials, seasonal menu changes or a specific wine or cocktail you’ll be offering on special. Focus on highlighting return-worthy events by posting signage and sharing on your social networks.
If you’re not focused on online customer retention, be sure to ask for feedback and reviews, and address any issues with delivery, packaging, or timeliness of order delivery. Think about how to bring your brand and hospitality to the take out experience with simple touches.
2. Smarter Menu Planning
Understand the “signature” items that diners will come to associate with your establishment and what makes those items unique. Maybe your chef makes a great mole sauce, or kicks up your mashed potatoes with a little wasabi. Whatever it is, make sure your servers are sharing which dishes get the most positive feedback to shift leaders or at staff meetings. Then have your servers promote the most winning dishes to first-time guests and see if customer retention improves.
You can also implement this practice with your online ordering menu by tracking daily sales and special performance.
3. Reward Customers for Their Loyalty
You can’t buy loyalty, you have to earn it. So once you’ve created a great experience and won them over with signature food and drink options, it’s time to offer your customers a little something special. Whether it’s an incentive to get first-time diners back in the door for visit #2 or creating exclusive invite-only events for your VIPs to make them feel special, use your loyalty program to drive customer retention of your most valued guests. Get to know your diners and custom-tailor your loyalty offerings to suit their likes and dislikes.
3 Major Pitfalls to Avoid with Restaurant Customer Relationship Management (CRM)
As the founder and editor of NextRestaurants.com, a site designed specifically for restaurant operators and marketing leaders, Upserve Partner Brandon Hull knows exactly how data and technology can benefit this industry. Here is his take on the three biggest mistakes many businesses make with CRM and how you can avoid them.
So you’re ready to compile good, smart data about your guests. You’ve either signed up for Upserve already or you’re intellectually committed to launch your own restaurant CRM initiative and starting to kick the tires on solution providers. Congratulations.
Your head and heart are in the right place. Now it’s important to connect all the dots to make sure you get the most bang for your buck, while sidestepping frustration coming from your staff, and worse yet, fall short of meeting your customers’ expectations.
Let’s review the major pitfalls you’ll need to avoid in order to get the most from creating and digging into your guests’ profiles.
Pitfall #1: Not launching your CRM program successfully
We’ve all suffered from flavor-of-the-month management, where a new program is launched way too often and hailed as the Future of the Company.
Whatever tech tools you decide on, a well-thought-out installation will pave the way to an awesome future for your restaurant — think through how you want to roll this out with your staff. You know them. You know your managers.
The insights on guests you’re going to immediately have access to will influence your way of thinking. Be proactive. Educate your staff at least to a minimal level on what you’re going to know about the business that you’ve never known before. Tell them what you hope to accomplish. Get them excited, but don’t oversell things.
Let managers know your restaurant will have a way to clearly identify your VIPs and you intend to adapt your thinking accordingly. A new emphasis on CRM will help you make great staff scheduling decisions, menu decisions, and marketing decisions. Let servers, hosts, and/or bartenders know that getting to know your guests is an important part of your restaurant going forward.
An informed staff means a staff that gets behind what you’re reaching for by initiating a restaurant CRM program. An uninformed staff, well, let’s just say they could undermine everything.
Pitfall #2: Not committing time to review your program regularly
The notion of having one wonderful login to see broad data on your guests and see how your restaurant is truly performing, only to ignore it, seems crazy — and I don’t mean a bland Business Intelligence dashboard that merely spits out a lot of information. But it happens.
Your tomato prices triple. A manager quits. The icemaker goes down. All of these things are unplanned, urgent issues that demand your attention. Deal with them as they happen. But if you want restaurant transformation, you’ve got to be proactive and put first things first, too. You’ve got to set aside time each day or week to go through your reports and be decisive about what you glean from them.
Maybe it’s time to delegate more of the front-of-the-house activities for a short time while you get your head around your new reports and insights. The key isn’t to launch a program. It’s to run a smart program that improves your restaurant. That might well require a new approach to managing.
As restaurant coach Donald Burns says, “You cannot expect to meet the challenges of today’s restaurant industry with yesterday’s tools and techniques and expect to be in business tomorrow.”
Pitfall #3: Not trusting your data
A 2015 Forbes study that polled senior leaders with major brands on their use of data, gave us four categories of marketers: Laggards, Dabblers, Contenders, and Leaders. If you’re reading this, it’s likely that you’re either a Contender or Leader, but let’s not make too many assumptions here.
The Dabblers. You’re a Dabbler if you’re amassing powerful data…only to intermittently use it. Too many restaurant owners say ‘Yes’ to collecting great CRM (and other) data, but then ignore or discount the insights they gain, thinking their gut is more trustworthy. They then halfheartedly embrace the valuable insights they get, viewing them with a cynical eye based on nothing more than pride.
I have seen this happen, folks. Set your ego aside and trust what the data tells you. Blend it with your experience — especially when it comes to people-centered decisions, which need that safe blend of objective data and the subjective, human element.
There are obviously other ways you can limit your success in getting started with Upserve or CRM in general, but these three are the most common reasons for getting only a limited ROI. Don’t let this be you.
Is Restaurant Customer Retention About The Chef? How To Hire Your Next Loyalty Magnet
Many great restaurants are chef-owned and operated, but there are others where the restaurant owner is not the person cooking the food. And since the reputation of the restaurant and its ability to attract and retain customers is at stake, it’s important to have the right chef at the helm in your kitchen. If you own or manage an upscale or fine dining restaurant, this information will be particularly relevant to you.
Hiring a Chef That Fits Your Needs
The top chef, or executive chef, has experience in running a kitchen and often has a background not only in cooking, but in restaurant management as well. After all, the word “chef” means chief in French, so your next chef has to lead all of the other kitchen staff members.
Your ideal executive chef will have a combination of experience in the kitchen, good instincts, a list of glowing references, or at the very least, an impressive culinary education, and the right attitude.
Here are a few of the talents your next chef must have, if you want them to completely take hold of the kitchen environment.
- Menu preparation. The executive chef will be preparing the more complex dishes so naturally menu creation should be part of the job. Allowing this freedom will also appease the chef, who will likely want this control.
- Ingredient selection. All the best chefs like to know not only the ingredients in their dishes but where the ingredients come from and how they’re grown. Top chefs select organic, locally grown food that supports the community and allows for a unique flavor. Some chefs are even taking the harvesting of ingredients a bit further by going out and foraging the best of the local land. It’s for these reasons that executive chefs are often in charge of selecting and ordering the restaurant’s food.
- Staffing. Executive chefs choose the people they want supporting their operation, particularly those individuals who help prepare the food like the sous chef, sauté chef, roast chef, vegetable chef, station chef, or pastry chef. Chefs may come into a new restaurant with hiring suggestions already in mind, and supporting their hiring decisions is encouraged because it bestows trust and allows them to excel at the job.
In order to be a “loyalty magnet,” your chef doesn’t have to be a local or national celebrity in the public eye. Finding someone who aligns with your vision and culture and highlighting their skills, background, and expertise in-house and online will help guests get to know them and create that loyalty through showcasing and experiences.