• Mike Hughes

Building Customer Loyalty

Updated: Dec 16, 2019

How Does a Restaurant Earn My Loyalty? By Mike Hughes

Guest loyalty.

If there was ever the ultimate apogee in the restaurant business, it is building and maintaining loyalty in our restaurants. The type of loyalty that breeds enough frequency that your dining guests are now on your schedule, and if they are absent on “their night”, the entire restaurant team worries and wonders what happened and if they are ok.

How does a restaurant become a restaurant of choice, instead of just another option among the crowded landscape of places to eat?

How about a gimmick? Maybe a loyalty program? Deep discounts of your product? Maybe even collecting data, contact information and bombarding them with your flavor of the week?

Todays restaurants need to do more than simply provide good service, good food and fair pricing, and to truly stand out, the term “good” isn’t good enough for all the rewards points in the world, to bring guests back to you on a consistent basis.

I’ve never been to a restaurant where the entire experience, from the parking lot, back to the parking lot was without flaw. As we know, there are too many variables in the restaurant business to deliver an unblemished and errorless dining adventure. I have identified over years and years of operating restaurants, along with decades of seeking out and enjoying great food and service, what works for me, and it’s not discounts, loyalty programs or email blasts!

It really begins and ends with the people, and in any given dining situation I have been in, the staff in the restaurant are why I will go back again and again. Great people produce great food and drink, and they provide great service.

Why is it then, that some places are filled with amazing people and some are littered with people that seemingly dislike the public? When you enter a restaurant, there should be a vibe that grabs you. The type of vibe where you can “feel” that the culture and operational dynamics are a living and breathing entity and nothing happens by accident.

In these next 2 examples we will visit a restaurant with a loyalty program and 1 without one.

1. Restaurant “A” is a Mom and Pop, casual dining restaurant. They are struggling with sales, and of course, with profits. They wonder, why, when they have an attractive looking restaurant, with a good menu and good people, that they see new faces once. Return guests are foreign to them. So “Pop” decides to try a frequency program that rewards visitors with one free entree after they purchase 10 entrees. He has a slick card printed, buys a unique stamp to indicate the entree was purchased, and has a banner made to hang out front touting his promotion. His total outlay for the cards, stamp and banner PLUS a couple radio spots on the hottest AM talk show in town set him back about $2000 of money he really couldn’t afford to spend. So a month in, he sees limited use of people remembering to bring in their dining cards, and while he does see some cards, they were from the few people who were already coming in. New guests seemed to still be the void. Now “Pop” is also one of those owners who despises yelp reviews, or yahoo reviews or trip advisor reviews, or ANY reviews, because what do those people know? So what is really happening here? You see, “Mom and Pop” are searching for a silver bullet to increase their repeat guests and sales, all the while turning a blind eye to the fact that what they have is really a problem with either food, service, the facility, the dirty bathrooms, the harrowing employees, or a combination of any or all of these things. Restaurant “A” is clearly not getting to the root causes of their sales problems and are trying band aids to fix them. Mom and Pop have very few bench marks in place to monitor standards beyond the dwindling money in the till. The idea of spending money to drive foot traffic to a restaurant that is failing at taking great care of the few guests they already have, is nuts.

2. Restaurant “B”, is another restaurant across town. The restaurant is similar to restaurant “A” in concept, and also has an attractive looking facade. This is however where the similarities end. This restaurant doesn’t offer a loyalty program. They have a consistent flow of both new and repeat guests, and their conversion rate of new guests into regulars is very high. The owners here, are “listeners”, and pay attention to feedback. This approach has worked for them, because they really believe that if the public's words of wisdom go without notice, they will simply go somewhere else. The operational systems in the restaurant are solid, so that literally nothing gets missed each day they unlock the doors. They have standards in place for service times and the owners pay close attention to gaps in those standards. Advertise? Never. Discount cards? Why? The only loyalty programs in restaurant “B” are the masses of people that dine there every week, who tell masses of people how on point the food and service are, and how well they are treated by the staff. They will never have a sales problem, or a profit shortcoming. They respond to EVERY guest issue, whether on a review site, in person, or by mail, personally and promptly. They are rarely in defense mode as their proactive approach to business prevents that from happening. Also a strange thing happens to all these feedback sources the better you get. . .The negative comments vanish almost completely, and some days are filled with thanking people for their kind words.

The main differences in my 2 examples above, are that the first restaurant is in denial about why they are not bringing people back with any regularity. They are chasing their tails and they really believe that the guests in their town will belly up time and time again because their amazing loyalty program, which is about a 10% discount, and is easier than identifying and fine tuning operational issues. Restaurant “B” has the hard part figured out, and will never have to cheapen their product to get people back. In fact, they are able to charge more money for the same exact thing that available across town, because they know people will gladly pay it.

The restaurant industry is over complicated time and time again by operators who abandon the basics and try to get fancy when they are struggling. I can’t stress enough the value of operational excellence, great hiring and training practices and listening to the feedback from the people who ultimately pay your bills. In fact I dare to say, I don’t know 1 single person, who will put up with an underwhelming restaurant to save 10%, once they endure 10 visits.

You see, gimmicks in our world are never the answer and those operators who view gimmicks as the end all to getting repeat guests, will eventually become a former place of business.



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