3 Things Ruining Your Customer Loyalty Strategy as a Restaurant

Customer Loyalty 100 Customer Loyalty 100

There is something many business owners miss.

And that is the fact that businesses are sustained by loyal customers. Most businesses only pay attention to acquiring new customers. They do little to build their relationship with their current loyal customers.

Loyal customers are pretty important to any business. But don’t take my word for it. Let’s look at what some authorities have to say about it.

According to a post by Harvard Business Review, it costs between 5 and 25 times more to get one new customer than it does to retain an existing one. For instance, if it would cost €5 to retain a current customer, it would cost €125 to acquire a new customer. Imagine that.

That’s not all…

Frederick Reichheld, the creator of Net Promoter Score, conducted a research. In it he revealed that if you increase your customer retention rate by 5%, your profits will go up by 25% to 95%.

So you see it costs more to acquire a new customer. But it costs less (and pays more) to retain the ones you already have.

Repeat customers are crucial to the bottom line of any restaurant. This is why as a restaurant owner or marketer your top priority should be customer loyalty.

I see many restaurant marketers running loyalty campaigns, trying to strengthen their relationship with their regular customers. This is good, at least they try. A few are quite creative and have amazing results. Others are just meh and end up wasting resources.

Do you know why many fail?

Before you go on to implement your strategy, there’s something you must know. There are 3 things that could ruin your customer loyalty plans.

The first is…

  1. An Inefficient Reward System

People love to be rewarded for their deeds. And they should. Your customers are no different. Our brains are wired to seek rewards. Rewards of one deed give us energy (and eagerness) to do another.

This is why reward systems have been effective over the years. A whopping 72% of adults in the US participate in at least one reward program.

Let me tell you more…

According to a 2017 report by Oracle, the following are true about loyalty programs:

  • In every 3-month period, people who participate in a loyalty program spend $43.33 more than non-participants.
  • 56% of consumers say that they actively look to participate in loyalty programs of brands they like.
  • 59% of consumers say that getting offers not available to others outside the loyalty program is important to them.
  • 69% of consumers take special treatment seriously.

Okay, enough of the facts. I was trying to point out that loyalty programs can work magic for your sales. Just look at those stats and you will see what I mean.

The question remains: why do many fail?

It all boils down to one thing – inefficiency.

Many reward systems that would otherwise have made a killing are rendered useless by things like:

  • Difficult or confusing signup process.
  • Lack of incentive to sign up.
  • Customers don’t really know what they stand to gain.
  • Customer progress through the program is unclear.
  • Program structure appears too generic.

These flaws reduce the number of customers that join the program.

Customers should be able to tell what they stand to gain from the program and when. Make the process easy and seamless. Let them know that the program is for loyal customer only. It should be clear that loyal customer will get special treatment through the program that others won’t get.

  1. Lousy Social Media Use

Social media is a pretty great channel to build customer loyalty. Safe to say, it is the best channel for that purpose, only surpassed by email. This doesn’t mean that once you have a social media account customers will throw themselves at you.

Sadly, a lot of restaurant businesses tend to think that is the case. So, they get a social media account, sit back and do absolutely nothing.

They do not post regularly and when they do, they sound boring and old.

Or worse, some restaurant marketers get an account on social media platforms that aren’t fit for their business.

Social media is about being ‘social’. If you don’t socialize with your customers on social media, you can kiss your customers’ loyalty goodbye.

Loyalty is strengthened by engagement. Customers who are engaged with on a regular basis trust a brand more. On social media, your customers are more relaxed, this gives you the opportunity to communicate with them on a lighter note.

  1. Non-Segmented Email List

Email is currently the oldest and the best channel for building customers loyalty. Businesses generate over 56% of their revenue from email lists alone. With email, you can get really specific and target a defined set of customers.

However, many restaurant marketers manage to make a mess of it.

Most would build an email list and start sending generic messages to all their subscribers. There’s no better way to create resentment for your brand than sending irrelevant newsletters.

When your customers find that your newsletters aren’t catering to their needs, they stop looking forward to them. They may report it as spam, delete, and unsubscribe from your list altogether.

You need to segment your customers into separate groups based on defined criteria like demographics, buying habits, preferences, etc. Because your customers comprise of people with different needs, segmenting them helps you create content that address their exact needs.

It makes your communication effective and more engage-worthy.

Here are 3 simple but effective ways to use email marketing to its full potential.

For segmenting to be done right, you need adequate customer data. And the best way to gather the right amount of customer data is using Wi-Fi marketing & analytics tools. With them collect customer data using a landing page and track your customers’ activities in your restaurant.

We would be happy to tell you more about how our product can help boost customer loyalty. Just contact us here and you will get all the information you need.

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