The purpose of any business is to acquire and keep customers. Customer acquisition is rather expensive (advertising). Customer retention is rather inexpensive (marketing).
According to Dan Kennedy, renowned marketing expert and business philosopher, we lose customers because:
Advertising is what you do to get people in the door. Marketing is keeping them coming back for more. Communicating and demonstrating appreciation to customers is paramount to retaining customers.
Customer retention (and therefore, higher customer lifetime value) relies on 2 things:
A good customer experience doesn’t have to be at Disney World levels. Just meet expectations. I think everyone wants to be served promptly and they want the food to be good (on par with the price) and they want their order to be accurate.
A good customer experience means your service should be polite, and your place should be clean…EVERYWHERE…floors, walls, tables, chairs, outside, and especially the restrooms. I strongly recommend your employees be trained and required to make eye contact and say “THANK YOU,” and I recommend you lead by example.
Today, it’s pretty easy to stand out. Following these basic expectations can actually make you exceptional. This level of service will get you some high review scores.
Good communication is the Holy Grail of customer retention. There’s simply too many choices in the restaurant business. Your competition is every other restaurant in the vicinity. The power of their marketing, the ability to get your attention is your challenge. National chains and franchises have massive marketing budgets for TV & radio advertising, direct mail, and newspaper inserts.
But YOU have things THEY don’t. Read on!
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You, the owner, and your story is important to a lot of people. It cultivates emotional connections. Unlike the chain restaurants and franchises, whose owners are shareholders and investors, YOU have a story. You have a reason for being in your business. People love stories. It’s how the human brain is wired. Whether you started your business from a personal passion, or if you took over the family business, a paragraph or 2 creates a story…and connections.
Do you use your grandmother’s recipes for inspiration? Have you picked up great ideas from your experiences to other parts of the country or other parts of the world?…More connections.
What about your family? Is your spouse involved with the business? What are your interests? Pets? More connections. “Dog people” love dog people. Golfers love golfers. Adding photos of yourself, your family, and your pets make you likable, friendlier…a friend.
One of the most valuable assets you can have is a list of your customers with their name, email address, and birthday. It’s so easy to accrue a list just by offering a free birthday meal and an occasional email announcing your specials, promotions and events. A restaurant email list can grow from Zero to 1000’s in a matter of months. Tens of 1000’s in a matter of years.
Smart and successful restaurant owners keep in touch regularly with relevant information, an offer, a Thank You, and a Happy Birthday and Holiday wishes. This gentle communication, when you have hundreds, or 1000’s of customers on your list, will keep you in top-of-mind position.
Lots of restaurant owners don’t want to send emails because they don’t want to be “a burden” to their customers. This is nonsense because if they didn’t WANT your email message, they would have never given you their email address in the first place.
Every time I think about this subject, my cousin George comes to mind. His father started the Elgin Diner on Mother’s Day, 1961 . George eventually took over the diner after his father died. Although George spent plenty of time in the kitchen, what I remember most was the time he spent in the dining room greeting customers and treating them like friends.
I think every owner should cascade around the dining room, make his or her presence known because your customers like it. Ask them if everything is okay, like George did. He owned a diner, not a 5-star steakhouse, so if this technique worked for him, it’ll work for you too.
I know for a fact that the Elgin diner didn’t just have REGULAR customers, they had LOYAL customers, many who ate their multiple times PER WEEK.
Treat your customers like their the love of your life. If you can’t, you’re guilty of indifference which means you’re probably in the wrong business.
Author: Andrew Mazer, Founder of Small Business U.
Contact Andrew at Andrew@smallbusinessu.org or sign up for THE ONE GOOD IDEA NEWSLETTER for great Small Business Marketing and Management Ideas.