Transforming one-time consumers into loyal restaurant customers is a key to success for most businesses. This holds particularly true for restaurants, and yet can be even harder to achieve due to the challenging combination of the increasingly competitive industry and today’s informed, empowered diners.
Luckily for restaurant owners, recent research from global market research firm The NPD Group offers invaluable new insights into the importance of loyal restaurant customers , along with what organizations can do to court this sought-after segment of patrons. Let’s take a closer look.
Putting a Price on Diner Loyalty
Just how valuable are loyal diners? For starters, loyal diners visit a restaurant approximately four times more than non-loyal diners — 66 versus 17 visits annually, to be exact, according to NPD.
This is fairly consistent across segments, with quick service diner loyalty numbers ranking the highest in terms of annual loyal versus non-loyal diner visits (61 versus 15), followed by retail (87 versus 26), and fine dining (36 versus 4).
However, in today’s unprecedented era of peer-to-peer influence, it’s not just about how often diners visit, but about how likely they are to recommend a particular restaurant to others. NPD data further reveals that loyals are significantly more likely to recommend an establishment to a friend than non-loyals — 89 percent compared to 36 percent.
Factor in the make-or-break-you power of social media and the pervasiveness of review sites like Yelp and Urban Spoon, and the potential impact of positive word-of-mouth becomes even more profound.
Aside from bringing in other buyers, loyal restaurant customers offer other benefits as well, including everything from reduced marketing costs due to higher brand awareness to lower price sensitivity.
And while many diners are notoriously unforgiving with a “one mistake and you’re out” attitude about the dining establishments they frequent, loyal diners also have a higher tolerance for the occasional mistake, according to NPD.
But how does all of this translate to your bottom line? Consider the findings of a National Restaurant Association survey revealing that repeat restaurant customers comprise 60 percent of sales at fine dining restaurants, 70 percent of sales at casual dining establishments, and a whopping 75 percent of sales at family dining and quick-service operations. You don’t have to do the math to get the picture.
The overall takeaway for restaurant owners, according to NPD Executive Director of Business Development Elizabeth Journell? “For so long, restaurant operators haven’t had data to understand the lifetime value of customers.
You can quantify it now. The restaurant industry is going to get clearer on who is loyal to them and focus on them. There’s big money to be made here if you understand that.”
Creating Loyal Customers
All of this begs the question: What turns one-timers into loyal customers? According to NPD’s findings, it comes down to a few things. The food, of course.
Diners expect high-quality tasty food at reasonable prices. But good food alone isn’t enough. Diners are also looking for consummate service, a pleasant atmosphere, and promotions, too.
More likely than not, your restaurant is hitting the mark in some of these areas. But in order to achieve the gold standard of customer loyalty, you must have strategies in place to achieve all of these things.
In other words, it’s not just about serving up tasty meals, it’s also about delivering a consummate, cohesive and consistent consumer experience. There’s no bare minimum.
If you’re not doing it all, the restaurant down the street is.
The good news? None of these things are extraneous to your mission as a restaurant. In fact, they’re likely already part of your core values.
Reviewing and updating these to account for everything from the latest technology — think loyalty apps — to changing diner tastes is a simple yet effective way to stay on track, inspire loyalty and deepen engagement.
Still not convinced that it’s worth investing in amped up diner loyalty strategies? Consider these parting words from Journell.
Loyal diners, she insists, “are the ones that speak on your behalf.” And considering everything we know about today’s connected consumers and the breadth and depth of competition out there, you need them more than they need you.
If that means working a little harder to court their favor, it’s ultimately a win-win.