A lot of restaurateurs believe that if they can get a customer in once and give them a great meal with great service in a friendly clean environment, they’ll become a repeat customers. That’s because everyone tells them that and the media wants you to believe that so you will spend a lot of money to get that first visit.
Here’s the reality… How many places have you been to where you’ve loved it but you’ve never gone back? Those places aren’t in your life pattern. They don’t fit into your schedule…. yet. The key is not to create a once-in-a-lifetime experience, it’s to create brand loyalty.
Here’s How You Create Brand Loyalty
If somebody goes to a restaurant for the first time and has a flawless experience, the statistical likelihood of them doing a second visit is about 40%.
The second time a customer comes and has a flawless experience, The statistical likelihood of a third visit is still about 42%.
The third time they come, the statistical likelihood of a fourth visit is over 70%. You have to market to three visits, not one. This is the part everyone misses!
Restaurants should never market for one visit, they should market for three. Understand that when it comes to marketing a restaurant it’s all about creating a regular. Once you get a customer in for the third time it starts to become a habit and the chances of them becoming a regular customer go up dramatically.
Gary Vee and I talked about the THREE most important steps for customer retention and life-time value. 🔥 Watch Video 🔥
— Jon Taffer
Jon Taffer gives us a great strategy in the video above, but as a busy restaurant owner or manager you may not have the time to visit every table, and tracking a business card or paper coupon can be cumbersome. The good news is, building a relationship with your guests and marketing to three visits can be aided and even automated using a customer loyalty and communication system.
Loyalty & Retention Marketing
With lots of competition and rapidly changing trends, it can be challenging to keep your restaurant at the forefront of guests’ minds. However, if you know what you’re doing, it’s possible to bring in new customers at a profit.
Consider implementing a Loyalty Retention Program to surprise and delight your clientele and subsequently turn them into brand advocates. People generally don’t trust paid ads, but they do trust their friend’s recommendation of a favorite place to eat. Your loyal customers are invaluable to the success of your business, and they should be treated as such.
You could give away 100 free meals using social media to target brand new customers. This way you don’t pay until they come in vs spending money up front and “hoping” people come, plus you are only out the cost of the ingredients. If you’re worried about food costs you can always do a “Buy One Get One Free” offer.
Once the new guest is there in your restaurant, the server asks them if they would like a free appetizer on their next visit to join your restaurant’s VIP club. This is a strong offer and most people will sign up on the spot.
Now you get them in a second time (with the free appetizer) and have the ability to send them marketing promotions and other informative updates whenever you want. This is how you get them in for that all-important third visit.
Best Types Of Offers
Some offers work better than others. For example, if your goal is redemptions don’t give a coupon or percentage off discount (unless it’s 50% or more). You are better off giving away the whole enchilada.
“People get addicted to discounts. They don’t get addicted to free.”
– Jon Taffer
It’s better to give a guest a free meal once and never discount it again than to discount it forever. People don’t expect it for free a second time, but discounts they tend to expect. Also, use as few restrictions as possible. A “no strings attached” offer will bring in more guests than one with a long list of restrictions.
A couple is okay, like “dine-in only” so you have a chance to wow them with your stellar service, plus food tastes better when eaten hot vs taking it home to eat later. Others like “one per table” and “not valid with any other offer” will keep you from losing your shirt.
The one restriction I recommend you do avoid is “with purchase.” Sure you’ll get a few people who take advantage and only order a water and their freebie, but the additional diners that come in will far out way the cheapskates.
Customer Lifetime Value
The other thing restaurateurs need to understand is customer lifetime value.
If you have a good product, give great service and manage to convert a guest into a regular, they’ll keep coming back for 5 to 7 years on average. Let’s say a family of 3 comes in twice a month and their ticket is $60.
Their lifetime value is around $3,000. ($120 x 12 months x 7 years @ a 30% profit margin)
Do you think it’s worth spending $5, $10 even $20 in food costs to make $3k? Don’t think twice about giving away a free meal, appetizer, dessert, drink, or all of the above to gain a customer for life!
The key is to focus on lifetime value and repeat business rather than one-time transactions. If you can focus on these principles, you’ll be able to build a restaurant brand that Jon Taffer and Gary Vaynerchuk would be proud of.
