6 Ways to Improve Customer Retention in the Restaurant Industry

October 22, 2023 | Editorial Team | Customer Loyalty

If you want to make a wish as a Restaurant owner, what would you ask? Did you say a lot of new customers?

Getting tons of new customers is excellent, but what sustains the restaurant business is repeat customers. So, if your marketing strategy is focused solemnly on bringing in new customers, maybe you are missing out on a great piece of the puzzle.

But how does customer retention help you build a sustainable restaurant business?

It’s because the cost of acquiring a new customer is five times more than retaining the existing customers. As a result, the repeat customers spend more money than new ones. Eventually, they become your brand ambassadors, who refer your brand name to their friends and family, ultimately bringing many new customers. Though it comes with great benefits, it is one of the biggest challenges in the industry.

Brands like Domino’s, Starbucks, and Taco Bell have become the biggest names in the restaurant industry largely thanks to customer loyalty. But what’s their formula? How exactly are these popular chains mastering the art of how to increase customer loyalty in a restaurant?

Let’s dive in!

6 Winning Customer Retention Strategies in the Restaurant Industry

1. Leverage Customer Data

Customer data plays a crucial role in customer loyalty and retention. The more information you have about the customer, the more flavors of loyalty you can add. In the post-COVID era, most orders and transactions take place on digital channels, generating more data. As a result, it is helping restaurants to create a more customized experience for their customers.

A Chicago-based Michelin-starred restaurant is leveraging data to make its top 100 customers feel special by greeting them by their names when they visit. Using the pre-booking and previous order data, they can identify the probable next visit of specific customers.

Based on the previous order data, you can send custom push notifications of special offers on occasion to add delight to your customers. You can create an effective menu with the most ordered dishes using the sales ingredient data. It will help the customer make the order quickly and save your cost by cutting the extra ingredient inventory cost.

With the shift to digital, data is more accessible. The resulting data analytics give us a level of insight into customer behaviors that we have never had before.

Examples:

Dickey’s Barbeque: US-based restaurant chain Dickey’s Barbeque has put data into action to maximize the profit. They have designed a drinking menu to compliment the most ordered foods by giving combo offers to the customers. It helped to boost their sales and enhance the customer experience with attractive discounts.
Domino’s: Domino’s is at the forefront of leveraging customer data. They understand how hard it is to wait for the customers while their delicious pizza is in the restaurant’s oven. Thus, they have introduced a Pizza tracker. It tracks the real-time progress of making their delicious pizza and makes it easier for customers to make their taste buds wait.

2. Leverage Technology to Improve Customer Experience

Technology bridges the gap between foodies and their favorite food. The brands that understand the bridge leverage technology to satisfy their customers’ cravings. Today, most of the transactions and orders take place digitally. Making it accessible and seamless to order through multiple channels makes the customer come back to you.

Examples:

Dunkin’: To enhance customer experience, Dunkin’ recently launched a new app that offers multi-tender features at more than 1000 locations. In addition, it allows guests to get rewarded with loyalty points regardless of the order’s medium and payment method.
Starbucks: Starbucks opened a brand new store model in China to make its delivery and mobile ordering experience more accessible. Using the high technology they have, Starbucks has introduced a new section to get the scooter riders to deliver the ordered food to make delivery even faster.
Panera Bread: The famous food chain Panera Bread, made the digital ordering service accessible at the two US airports. These quick pick-up services offer a digital ordering facility to target customers in a hurry to catch their flights.
Domino’s: Voice-based orders are seeing a surge in the US and other parts of the world. To tap into this market and allow their customers to provide voice-based ordering, Domino’s is investing in developing Voice-based solutions to enhance customer experience. Customers can now order their delicious pizza through smart speakers like Echo, Google Home, and smartwatches.

3. Build a Loyalty Program for Restaurants

There is one important secret to customer retention on this planet. Loyalty programs for restaurants have become a necessary customer retention strategy. These are the most significant reasons brands like Domino’s, Taco Bell, and Starbucks are winning the customers’ hearts. Almost every popular restaurant chain has its loyalty programs to keep its customers engaged and enjoy the perks of being loyal customers. A survey says 57% of customers are more likely to prefer restaurants with loyalty programs.

How Loyal Customers Are the Backbone of Successful Restaurant Chains?

Loyal customers spend 60% more than regular customers.
Loyalty program members are 20% more frequent buyers.
73% of loyalty program customers recommend brands with good loyalty programs.

4. Collect and Act on Customer Feedback

Listening to your customers is one of the best ways to keep them engaged; it motivates them to come back. Nothing can be better than asking for a review and feedback on their dining and food experience.

Closely observe the reviews on Google and other review sites to keep a constant touch with your customers. Of course, it’s inevitable to get a negative comment, but responding to them creates a positive image.

Asking the feedback from your customers makes them feel valued and special. Most first-time customers read Google reviews, which makes online ratings crucial. A one-star increase in rating could increase your restaurant’s revenue by 5-9%, a study by HBR reveals.

5. Personalize Customer Engagement

If you’ve ever been in a relationship, you know how much effort matters. The same is true for you and your customer’s relationship. They love to feel special and see you making an effort for them.

Remember their birthday anniversaries, and offer special greetings and discounts on their special days. They won’t be able to stop themselves from coming back to you.

Contact your customer before their anniversaries, offer them free Champaigns, and urge them to celebrate their special day at your restaurant. Such personalized marketing efforts will make your customers fall in love with your restaurant.

6. Maximize Social Media Engagement

The only secret to making your customer come back to your restaurant is to stay on top of their mind. When they are not in your restaurant, they are probably looking for some options on some social media platform; to keep them engaged.

How are Restaurants Using Social Media to Keep the Customers Engaged?

1. Wave Asian Bistro & Sushi – Behind the scene videos

All Foodies love behind-the-scenes food videos. Wave Asin Bistro & Sushi creates mouth-watering food videos for their customers, making their delicious food hard for them not to visit their restaurant.

2. Condado Tacos – User-Generated Content

Who doesn’t love to share their delicious tacos on Instagram? Condado Tacos is leveraging its users’ content to stay on top of the customer’s minds. It helps them develop content consistently without any effort and social proofing.

3. Capriotti’s Sandwich Shop – Hosting Social Media Contests

Riddles, Photos, Q&As, there are millions of contests that you can run to keep your customers engaged and entertained. Winning rewards, free dining, and coupons ensure customers stay engaged with your brand.

How to Increase Customer Retention With a Loyalty Program?

1. Case Study-Domino’s Loyalty Program

Domino’s has more than 40 million people in customer loyalty programs.

“Piece of the Pie Rewards” – Domino’s launched this loyalty program for the first time in 2015. It rewards 10 points for every order a customer makes through their app or website. So, for example, when they collect 60 points, they can claim a free medium-sized pizza with two toppings. It helped the brand to boost its mobile sales and repeat customers.

Multi-channel Loyalty – Domino’s kept the loyalty programs the same across all the channels, online or offline. They believe in the Loyalty360 policy; you are eligible for their loyalty program no matter where you order from. It gave a push to their multi-channel ordering system.

“Piece of the Pie Pursuit” – Domino’s launched a virtual game to earn loyalty points. It’s a mobile game with six levels. If a player completes all levels, they are eligible for a Free Pizza. This strategy boosted customer engagement.

2. Case Study-Starbucks Loyalty Program

Starbucks is nowhere behind Domino’s when it comes to Loyalty programs. It is one of the early adopters of the Loyalty programs, creating a community of 16 million active members (as of 2019). In addition, 40% of their sales come from the Reward programs.

In 2016, Starbucks launched its loyalty program. Customers would receive two stars on every dollar spent, which could be redeemed when they have 125 stars for free drinks and food. In 2019, it revamped the loyalty program; customers can now redeem the stars when they reach 25. They eliminated the validity of the stars.
My Starbucks loyalty program provides an option to avail of special offers on their birthdays and anniversaries, with real-time offer tracking.
To increase customer engagement, one can send birthday cards to friends and family. Free games and music are also an inclusive part of their loyalty programs.

How Does Zinrelo Loyalty Software Help You to Increase the Customer Retention?

There is no doubt that a customer loyalty program is the most effective strategy to boost customer retention. Zinrelo helps brands to create the best loyalty programs, and handle loyalty data, loyalty segmentation, and loyalty transactions effectively.

Zinrelo unlocks the power of deep analytics in loyalty programs to leverage customer loyalty. With a prime focus on personalization, Zinrelo has helped market leaders amplify customer retention through loyalty programs. It is the top loyalty management software as reflected in the ranking on G2.