Restaurant Customer Retention

Marketing to existing customers is typically focused on a few common goals:

  • Increasing orders: Either by driving them to your physical location or via takeout/delivery
  • Increasing visit frequency: Increase the average number of times they order with you in a designated time frame.
  • Re-engaging lost customers: Incentivize purchases from customers that haven’t visited you in a certain amount of time (the amount of time will depend on your specific business, but anywhere between 3-6 months is recommended).
  • Getting to know the customers better: This might be signing up for a loyalty program or capturing their data for remarketing purposes.
  • Evangelizing current customers: You don’t just want regulars; you want brand advocates who will write reviews about your restaurant and recommend your location to family and friends. 

Often, your marketing promotions can achieve more than one of these simultaneously. For example, if you run a loyalty sign-up campaign and offer an incentive to sign up (maybe a free appetizer on their next visit), you’re also influencing visit frequency and purchase.

So how do you engage your current customers? That all starts with your customer database or CRM. Your CRM is your collection of customer contact information (this could be any combination of email, address, phone number, etc.) that your customers have willingly provided to your business. This is considered first-party data, meaning you collected this information first-hand and have complete ownership of it, and it’s becoming increasingly more important to the success of businesses in the modern age.

Maintaining a customer database needs to be more than just a list of email addresses written down in a notebook: the best CRMs allow you to set up both ad hoc and automated marketing campaigns. 

The more customer data you have, the more opportunities you have to understand your customer and market to them with personalized messaging. For example, a customer with a young family isn’t going to be as interested in your late-night deals or happy hour specials. However, they would be more interested in learning about your family nights or brunch specials. Understanding your customers and sending personalized messages can set you apart from other restaurants in the neighborhood and lead to more foot traffic. 

One way to capture more customer data is through a loyalty program, which is also a great way to increase visit frequency for existing customers. 

Restaurant Customer Retention:
Loyalty Programs

Let’s first focus on increasing orders and order frequency with existing customers. One of the most tried and true ways to do this is with a loyalty program. At its core, a loyalty program rewards customers with various incentives for their frequent or continued engagement with a brand. In short, the more a customer purchases, the more rewards they get.

These days, where customers have so many options to choose where they spend their time and money, loyalty programs can help restaurants stay engaged with their customers. Data shows that loyal customers buy 90% more frequently, spend 60% more per transaction, and deliver 23% more revenue and profitability than first-time purchasers. That’s why this is such a lucrative audience for a marketer to tap into. If you can increase the loyalty (purchase frequency) of a customer, you gain more revenue over the short- and long-term and capture more data about your customers.

In order to sign up for a loyalty program, it is necessary to provide each consumer with a unique identifier, often in the form of customer number, email address, or phone number, to be able to associate their loyalty account with their transactions. Of course, the traditional punch-card method is also an option, but one that doesn’t offer your business an actionable opportunity to use customer contact information for remarketing. As mentioned above, the customer database needs to be both scalable and actionable, and unfortunately, non-digital methods do not enable this to the same degree. 

One important fact to consider is that even with a loyalty program in place, only a subset of your customers will be participants. Even Starbucks, which has an industry-leading loyalty program, only sees 40% of total sales come from their rewards program. Instead, the majority of your customers will continue to be one- or two-time visitors, which is why win-back campaigns are a great way to increase visit frequency with your more casual customer base. 

Restaurant Customer Retention:
Win-back campaigns

Win-back campaigns are intended to increase visit frequency with lapsed customers or a guest who has visited once but hasn’t returned in several weeks/months. While these don’t always have to be promotional, incentives can spark urgency after non-promotional attempts have failed. 

Here are three best-practice strategies you can employ to bring back lost customers.

1. Email Win-Back Campaigns

An email win-back campaign is a well-timed automated series of personalized emails used to increase brand consideration, re-establish the relationship, and ultimately incentivize purchase. Ideally, an email management software that provides marketing automation can help you set up some of the options below and have them run automatically for you moving forward. Win-back campaigns can be as simple or as complex as you would like, but here’s a simplified example of what this might look like below:

The idea here is to gradually increase the incentive for the customer to re-engage with the brand. Not only will this give you insight into what offers they’re attracted to, but it also helps you save on offer costs instead of jumping straight into one of your richest promotions.

A critical aspect of a win-back campaign will also be determining how to measure success. With a goal of incentivizing purchase, open rates and even click-through rates may not be enough to confirm a purchase, especially if you’re offering takeout/delivery services through third-party apps. Instead, the best indicators of purchase would be a direct conversion through your website, the number of offer redemptions, and/or deterministically understanding the number of customers who walked into your store within 7 days of opening your email (we call this a Walk-Through Rate™).

2. Offline Retargeting

Another strategy for re-engaging lapsed customers is to launch an offline retargeting campaign. Where online retargeting is when you serve ads to users who visit your website and leave, offline retargeting takes it a step further by serving ads to customers that had previously visited your physical location. Amassing a customer list will give you an audience to target moving into Q1 and 2022.

One of the benefits of ads over email is that, unlike email, where you’re relying on the customer to open the email to be exposed to your content, paid social and display ads get your messaging front and center with or without customer engagement. Even when consumers don’t engage directly with the message, there’s plenty of empirical evidence that shows that they are, in fact, subconsciously absorbing the material.

This is achievable through WiFi marketing tools like Adentro and is not only one of the most effective ways to stay top of mind but also safeguarded from recent changes that will soon dissolve our ability to offer online retargeting to anonymous users. Additionally, working with a platform like Adentro allows you to track the online conversions and see the number of customers driven to your physical location after being exposed to one of your ads.

3. Tap Into Customer Reviews

If you’re a business that’s been around for more than a month, chances are there are a number of online reviews left by customers about their experience with you across Google, Yelp, Facebook, and maybe even TripAdvisor. Auditing these reviews can be a good source of customer feedback and a great way to re-engage lapsed customers.

Take inventory of your 1-3 star reviews and extrapolate common themes to inform how you can make real positive changes at your restaurant. If the reviews are vague or more information is needed, you can also follow up with customers by responding to their reviews and asking for more details via email or for them to take a survey. Once you’ve identified the opportunities for improvement and worked to correct them, then spin it into a marketing campaign!

Follow up with your customers to let them know, “We fixed it!” and invite them back to give you a second chance. More often than not, customers will appreciate your willingness to take their feedback and give it another go. A great example of this is Domino’s Pizza Turnaround campaign, where they listened to customer feedback, addressed the requested changes, and authentically responded to customers via marketing and PR. Where Domino’s was once struggling to keep up with Pizza Hut and the like, this campaign was a turning point for the chain, and it now ranks as No. 1 as the pizza chain with the highest gross sales in the U.S.

2022 Restaurant Marketing Guide

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Marketing Restaurants