Restaurant Customer Retention

One of my favorite jobs when I was younger was waiting tables at a brand new restaurant.  

This restaurant was a franchise from a larger chain and I learned a lot about selling from working there.  I got great tips, many of which came from up-selling techniques to increase the customers overall bill.  For example, I learned that if the first person to order a drink set the stage for what the others were going to buy - if the first person ordered water, the whole table got water, but if the first person ordered a Pepsi, at least half of the table would get fountain drinks. 

But all of this was just how to sell when the customer was already in the door.

The problem was that these tactics didn’t get the customer back.

Why Customers Don’t Return

One of the things I loved about this restaurant was that we had a steady flow of customers when the store first opened.  It was obvious that people were excited to check out the new establishment and there was quite a bit of grace when errors were made - the tips were good even if the service or food wasn’t.

But I knew that the store was busy mostly because it was new and people were checking it out.

Over time, traffic declined.  The food was good, but the prices were a bit high - especially when we up-sold the customers by selling appetizers, drinks, and desserts with the goal of increasing their bills so we could earn higher tips. 

But the $4 drinks caught many people by surprise and left them having a poor first impression - I can remember many instances where customers appeared shocked at their total bill.

Unfortunately, this heavy selling focus ultimately led the franchise to go out of business within just a few years.  

Understanding the Sales Process

The problem this franchise faced was that they were focusing on squeezing every dollar out of the customer rather than guiding the customer down the path toward becoming an ideal customer.

A sales process should have four distinct parts which take a prospect down a path toward becoming an ideal customer:

  1. Find It.  In this first phase, this is where the customer discovers and becomes aware of a business. 
  2. Experience It.  This is the phase where the customer samples, or tries out, the products or services of a business.
  3. Engage With It.  When a customer has a good first experience, they will begin to engage with a business by making a purchase.
  4. Lock Into It.  In this final phase, the prospect has become an ideal customer - one who is loyal and committed to your business.

Building Trust

The sales process is designed to build trust with customers.  Basically, consumers don’t want to become your ideal customer the first time they discover you.  They have to be walked down a clear path that smoothly takes them from one step of the process to another.

The same is true in our personal lives. Would we try to kiss someone the first time we met them? Of course not.  

But yet, businesses essentially try to do this with pushy sales tactics.

The problem with the failed restaurant was that they never really considered the final and most important stage - locking a customer into their brand.

Customer Retention for Restaurants

The final stage of the sales process - Lock Into It - is the stage where a prospect turns into an ideal customer.  This is where they really become loyal and advocate for the business.

This process, however, is actually missing from many restaurants.  

Many restaurants just sit around and wait for customers to come into their stores.  They focus on the food but don’t do anything to retain or engage with their customers.

But some restaurants do this well.  They do things like:

  • Memorize their customer’s first names.
  • Support local artists, musicians, and businesses.
  • Establish an e-mail list and engage with their customers. 
  • Create loyalty programs (like buy 10 meals and get one free).
  • Sell beer mugs that can be filled for $1 on certain days.
  • Offer memberships that entitle members to special menus and member-exclusive reservations.
  • Offer free enhanced water like soda water or cucumber water.
  • Celebrate birthdays and anniversaries.

A Question For You

What has made you loyal to a certain restaurant and how could that be modeled at other restaurants?

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