The Relationship Between Customer Loyalty and Profitability
Customer loyalty and restaurant profitability are intricately tied to one another. According to the Gartner Group, nearly 80% of your future profits will come from just 20% of your existing customers. This means that when deciding how to allocate your resources, priority should be placed on getting to know and retain your current customer base.
Sure, exciting promotions and events that get new guests in the door help boost daily sales, but long-term, consistent revenue growth comes from your regulars: the family that comes in every week for Taco Tuesday, the couple that celebrates all special occasions in your dining room, and the group of friends that orders takeout every Friday evening.
Instead of focusing all of your efforts just on customer acquisition, restaurants must prioritize their strategies for how to nurture and build relationships with their current customer base.
Strengthening customer loyalty brings in more revenue per ticket, as well as an increase in the frequency of visits—a win/win when it comes to growing profitability. Once you’ve gained the trust of your loyal customers, they’ll choose you over the competition, which keeps your revenue flowing long after a promotion or event.
Want to learn more about creating a customer experience your guests won’t forget? Check out our free ebook here.
Building Restaurant Customer Loyalty that Lasts
While good cuisine, great customer service, and fair prices are important factors in driving customer loyalty, those alone won’t be enough to keep you competitive. Building real relationships with your restaurant patrons requires a customer-focused mindset.
Here are a few ways to improve yours:
Evolve with Their Needs
Customer behavior is always fluctuating. From time to time, there will be a shift in what your customers are looking for that affects how they want to spend their time and money.
Take COVID-19, for example. When the pandemic first struck, consumer focus shifted from convenience to safety. Customers traded dine-in for delivery and curbside pickup, and the restaurants that stayed profitable were the ones that quickly accommodated the behavioral shift.
If COVID-19 has taught the industry anything, it’s that restaurant owners must regularly engage with and listen to their customers, which isn’t too difficult with the right technology.
When all of your ordering channels are integrated, it allows you to keep a close eye on your ordering data, alerting you of trends and shifts in behavior immediately. You can automate data collection and quickly analyze that data if you utilize a comprehensive Restaurant Management System (RMS), which saves valuable time and makes it easier to view.
With this, you no longer have to manually collect and combine order data from different channels. Everything is integrated, so data can be shared and reviewed across channels.
Restaurants aren’t the only ones hit hard by COVID-19—customers have been hit as well. Because of that, customers are choosing to support businesses that also support their communities and immediate environment.
For example, many restaurants like Little Pops Pizza donated meals and supplies to healthcare workers and first responders at the onset of COVID-19. Others have taken other avenues, such as organizing fundraisers for local sports teams and clubs or donating gift cards or cash to community events.
No matter how you choose to give back, your customers will notice that you care about them and their community, and will want to offer their support right back.
Develop a Next-Level Customer Loyalty Program
These days, an annual birthday coupon for your customers will likely not bring many people into your restaurant. Such methods are antiquated, and customers have gotten accustomed to bigger and better loyalty programs that offer more unique rewards for their business.
Good loyalty programs keep customers interested—and since this interest is always evolving, so are the programs. Today’s successful programs offer unique rewards that customers may not be able to receive otherwise. Some examples include early access to new dishes, exclusive events and priority reservations, and tiered membership levels with more benefits.
Some key features of a next-level customer loyalty program are:
- A simple sign-up process and user experience
- An easy-to-redeem rewards program
- Personalized promotions
- Rewards anytime and anywhere an order is placed
The goal is to connect with your customers meaningfully and reward them for their loyalty to your restaurant. A reward can be anything you think your customers will value. Even donations to customers’ favorite charities can be considered rewards.
A good loyalty program can snowball your restaurant’s success. The more your loyalty program gives your customers what they want, the more data and visibility you receive that help you better understand your customers. As a result, you can make better decisions that let you continually reward your customers and give them amazing brand experiences, and the cycle continues.
Maximize ROI With a Restaurant Management System Designed for You
Because loyalty programs are incredibly important to the health of your restaurant, they fortunately often come as a standard in a quality restaurant management system. Along with managing your loyalty program, the HungerRush Restaurant Management System offers additional useful features like multi-channel ordering, detailed reporting and insights, and more. These technology solutions are becoming crucial as restaurants shift their focus and plan for their futures.
Contact HungerRush for a personalized free demo and learn how we can help you enhance your restaurant digitally in 2020 and beyond!