Tips for Boosting Customer Retention and Loyalty for Long Term Profitability

Most restaurants receive about 80 percent of their incomes from 20 percent of their customers. This active customer base is loyal, in-tune with your brand and concept and willing to refer friends and associates to your restaurant and services. You can earn business repeatedly with these customers with loyalty programs and increase long term profitability.

Avoid the pitfalls that others might fall into that can make a loyalty program backfire. Increase loyalty and sales even when you're decreasing inventory or cutting back on the merchandise that you offer.

1) Offer the value, not the fact you have a loyalty program!

Simple and to the point is key. You need to have a hook. Your program needs to be enticing enough to make your customers want to sign up and the program needs to be easy to understand.

It is preferable if your associates can explain the program in one, short statement. For example, "Put your e-mail address here if you would like to receive a 40% off coupon to use on your next visit." The sentence tells the customer everything that they need to know. All you need is their e-mail address and they will receive a coupon for 40% off.

2) Make sign-up simple

The process of signing up has to be fast and easy. If customers have to fill out more than two bits of information, they are not likely to do it. In fact, if they only think that it may be more involved, they'll shy away from hearing any more information.

Asking "Do you want to sign up for our rewards program?" can make almost every customer immediately say, "No thanks". It gives the impression that they will have to fill out a lot of information and read a lot about how this program works. Avoid statements that give the customer an immediate out before they know what your program is about.

3) Make the offer visible at your store

Advertise your rewards programs outside of your storefront or near the payment terminal. People sometimes look for deals and visit stores that have them. A simple flyer or a digital display with your offer goes a long way!

However you do it, make it easy and attractive to your customers. You could find that it's easy to keep your customers coming back and spending more than you ever thought possible before.

4) Wow them with a 'freebie'

Sometimes a small act or unsolicited service that comes out of the blue can let your customer know you remember them and really care. A simple gesture of giving away something for free can strengthen the relationship and increase the loyalty factor tenfold.

For example, giving preferred customers merchandise that features your restaurant’s logo. Restaurants like Bubba Gump's Shrimp Company allow their customers to get a free beer glass with the purchase of a draft.

5) Create special offers on holidays and customer's personal milestones

Offering specials during holidays can easily keep your marketing calendar filled year-round. The same strategy applies to anniversaries, graduation dates, proms and other personal milestones.

The trick is getting information about your customers and using it in a timely way. If your POS system offers rich data about your customer, you can utilize this information towards your loyalty and marketing programs.

Most important events are planned several weeks or months in advance. You need to reach customers with your free offer before they commit to a different restaurant or plan a party at another venue.

Most people celebrate their birthdays with friends, family members and co-workers. If you offer a valuable free birthday incentive, the recipients might bring enough guests to fill a large table or the entire restaurant.

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