Author's Bio:
Brooke Webber, a seasoned Content Creator and PR Specialist, excels in crafting content for the US restaurant industry with her innovative storytelling and market insights. Her expertise in engaging content elevates restaurant brands, making her a valued asset in culinary communications.
Discover the power of customer loyalty in "Win Customers’ Loyalty to Your Restaurant: 7 Steps." This guide reveals how retaining an existing customer can be up to 25 times less expensive than acquiring a new one. Learn to boost customer lifetime value (CLV) and profits, with loyal diners spending 67% more than new customers.
A mere 5% increase in loyalty can skyrocket profits by up to 95%. Plus, harness the influence of word-of-mouth, as 86% of satisfied customers recommend businesses they trust. Ideal for restaurant owners, this article offers seven actionable strategies to cultivate and capitalize on customer loyalty.
Restaurant Management
Managing your restaurant operations, your finances, staff and customers is not easy. Learn how to be the best restaurant manager possible to stay in the restaurant business for the long term.
1. Create a Friendly Restaurant Atmosphere
As a new restaurant owner, one of your primary goals is to create an environment that not only attracts customers but also encourages them to return. An effective way to achieve this is by understanding and implementing the principles of shape and color psychology in your restaurant's design. Let's explore how these elements can transform your space into a customer magnet.
Shapes: The Contours of Comfort
Why Shapes Matter: The shapes you choose in your restaurant's design can significantly influence the mood and perception of your space. Research indicates that certain shapes can evoke specific emotional responses:
| Shapes | Benefits | Applications |
|---|---|---|
| Curved Contours and Circles | Curved and circular shapes are associated with happiness and can create a relaxed atmosphere. | Consider incorporating them into your wallpaper patterns, furniture design, or decorative elements. |
| A Blend of Organic and Geometric Patterns | A mix of natural (organic) and structured (geometric) shapes can create a visually appealing and balanced environment. | Used in wall designs, layout planning and decorative accents. This approach can make the space more dynamic and engaging. |
Colors: The Palette of Emotions
In the realm of restaurant design, the strategic use of color can be a game-changer. Color psychology is not just a design element when starting a restaurant; it's a powerful tool that can influence mood, behavior, and even appetite. Let's dive into how different colors can shape the dining experience and ensure that your customers are eager to return.
| Color Categories | Specific Colors | Benefits | Ideal Applications |
|---|---|---|---|
| The Appetite Stimulators | Yellow | Stimulates appetite, evokes happiness and optimism. | Casual dining spaces, cafes, eateries for a lively, energetic atmosphere. |
| Red | Strong appetite stimulator, vibrant and energetic. Creates a sense of urgency. | Fast-food restaurants. Use judiciously to avoid overwhelming customers. | |
| The Calming Influence | Green | Symbolizes nature, health, tranquility. Soothing and calming effect. | Restaurants focusing on healthy, organic, or vegetarian cuisine. |
| The Cozy Ambiance | Darker Hues (Navy Blue, Deep Red, Forest Green) | Creates a cozy, intimate atmosphere. Instills a sense of safety and comfort. | Fine dining restaurants, upscale establishments aiming for a sophisticated look. |
Practical Tips for Implementing Color Psychology
- Balance is Key: Avoid overwhelming your space with a single color. Instead, aim for a balanced color scheme that combines different hues harmoniously.
- Accent Colors: Use bold colors for accent walls or decorative elements to create focal points without overpowering the space.
- Lighting Matters: Remember that lighting can significantly affect how colors appear. Natural light brings out the best in most colors, while artificial lighting should be chosen to complement your color scheme.
- Consistency Across Branding: Ensure that the colors inside your restaurant align with your overall branding, including logos, menus, and staff uniforms, for a cohesive brand experience.
By thoughtfully selecting colors that align with your restaurant's concept and brand, you create an environment that not only looks appealing but also enhances the dining experience, making your customers feel comfortable and eager to return.
Case study: Le Potager de Charlotte
When Le Potager de Charlotte opened their second vegan restaurant, they combined dark green with G-Circles (full of preserved moss) and circular furniture in design. Image source
2. Segment Your Restaurant Audience
Segmenting your restaurant customers means dividing them into smaller groups based on shared characteristics. This approach allows you to tailor your services, marketing strategies, and overall dining experience to meet the specific needs and preferences of different customer types.
Why Segment Your Customers?
- Personalization: Tailored experiences resonate more with customers. By understanding the unique needs and preferences of different segments, you can offer personalized services that lead to higher customer satisfaction and loyalty.
- Targeted Marketing: Segmentation enables more effective marketing strategies, whether through social media, content, or email marketing. You can create campaigns that speak directly to the interests and needs of specific groups.
- Increased Sales: By aligning your offerings with the specific desires of different segments, you can boost the relevance of your restaurant for these groups, leading to increased sales.
Types of Customer Segmentation
| Segmentation Type | Characteristics | Application |
|---|---|---|
| Needs-Based Segmentation | Unique requirements and preferences in food. | Tailor your menu and services to cater to specific dietary needs or preferences, like gluten-free options or vegan dishes. |
| Demographic Segmentation | Ethnicity, age, religion, gender, etc. | Create menu items or themed nights that appeal to different demographic groups, ensuring inclusivity and diversity in your offerings. |
| Geographic Segmentation | Region, language, local trends, cultural nuances, etc. | Adapt your menu and marketing to reflect local flavors, trends, and cultural preferences. |
| Psychographic Segmentation | Diner’s personality type, dining habits, etc. | Offer dining experiences that align with various lifestyle choices and values, such as eco-friendly practices or luxury dining experiences. |
| Behavioral Segmentation | Dining occasions, ordering behavior. | Customize promotions and offers based on customers' previous orders or dining patterns. |
Segmenting customers by age and family status allows you to create family-friendly environments. Consider offering a kids' menu, providing coloring placemats, or setting up a play area.
Case study: Joe’s Crab Shack
Joe’s Crab Shack, a US seafood chain, successfully incorporates a “Kids’ Menu” and playgrounds near their restaurants, catering to families and enhancing the dining experience for all ages. Image source
3. Incentivize Your Customers to Return
In the competitive world of the restaurant industry, loyalty programs and rewards can be a game-changer. Statistics reveal that 57% of customers are more likely to frequent a restaurant that offers rewards or loyalty programs. However, surprisingly, only 42.9% of restaurants currently have a customer loyalty program in place. This presents a significant opportunity for new restaurant owners to stand out and build a loyal customer base.
Personalization is Key
Jerry Han, CMO at PrizeRebel, emphasizes the importance of personalizing rewards to cater to individual customer needs. A well-crafted loyalty program should not only offer monetary incentives but also non-monetary ones, creating a more comprehensive and appealing package.
Jerry Han, CMO at PrizeRebel.
"Boost restaurant loyalty by personalizing bonus packages to customer needs, offering both non-monetary (like thank-you notes) and monetary rewards (e.g., gift cards)."
Monetary vs. Non-Monetary Incentives
- Monetary Rewards: These can include bonus points, one-time or limited-time discounts, complimentary gifts, loyalty cards, birthday or anniversary presents, subscription and membership rewards, etc.
- Non-Monetary Rewards: Personalized thank-you notes or exclusive experiences can add a unique touch to your loyalty program, making customers feel valued and appreciated.
Implementing Effective Reward Strategies
| Reward Type | Description |
|---|---|
| Bonus Points | Allow customers to accumulate points with each purchase, redeemable for meals, drinks, or discounts. |
| Discounts and Offers | Provide one-time or limited-time discounts to encourage repeat visits. |
| Complimentary Gifts | Surprise customers with free items or services, enhancing their dining experience. |
| Loyalty Cards | Implement a card system where customers earn rewards based on their frequency of visits. |
| Special Occasion Rewards | Celebrate customer birthdays or anniversaries with special offers or gifts, personalizing their experience. |
| Membership Benefits | Offer a subscription or membership program with exclusive benefits. |
Case study: Panera Bread
Panera Bread, a renowned bakery-café chain, successfully launched the Unlimited Sip Club. This innovative program allows subscribers to enjoy self-serve drinks, partake in exclusive deals, participate in VIP challenges, and more. Such initiatives not only incentivize customers but also create a sense of belonging and exclusivity. Image Source
4. Create Interactivity with Innovative Technologies
Studies show that 65% of consumers are more attracted to restaurants that incorporate innovative and interactive technologies. These advancements are not just about automation; they're about enhancing the customer experience in unique and engaging ways.
Beyond QR Codes and Self-Service Kiosks
While QR code menus and self-service kiosks have become commonplace, Eric Mills, Owner of Lightning Card Collection, suggests that these technologies might not be sufficient to significantly improve customer loyalty.
He advises restaurant owners to explore more advanced tech solutions that offer a gamified and highly interactive experience, as customers now expect more than just convenience—they seek entertainment and engagement from brands.
Eric Mills, Owner of Lightning Card Collection
"Restaurants need more than QR codes and self-service for loyalty. Advanced tech for a gamified experience and interactive customer engagement is key, as diners expect interactivity and entertainment."
Innovative Technologies in Restaurants
| Innovative Technology | Example | Description |
|---|---|---|
| Robotic Bars | Bionic Bar on the Royal Caribbean Ship | Uses robotic bartenders to mix and serve drinks, offering a futuristic experience. |
| Robot Waiters | The Chinese Buffet | Employs robot waiters, adding a novel twist to the dining experience. |
| Rotating Conveyor Belts | Kura Revolving Sushi Bar | Uses conveyor belts to deliver sushi, combining convenience with a unique dining format. |
| Food Delivery Drones and Robots | Domino’s Pizza | Experiments with drone and robot delivery, showcasing innovation in food delivery. |
| AI-Powered Chatbots | Tacobot by Taco Bell | Provides an interactive ordering experience through AI chat technology. |
| AI Phone Answering Systems and Voice Assistants | Slang.ai at Slutty Vegan and Kea at Papa John’s | Use AI to enhance customer service efficiency. |
| Instagram Tables | Boston Chops Downtown | Offers specially designed tables for Instagram-worthy food photos, appealing to social media enthusiasts. |
| Interactive Dining Tables | Inamo restaurant & bar and LePetitChef | Feature interactive tables where customers can enjoy a visual story with 3D projection mapping technology. |
Case Study: LePetitChef
LePetitChef stands out with its interactive dining concept. Here, the world's smallest chef takes customers on a culinary journey using 3D projection mapping technology. This immersive experience combines dining with storytelling, making it a memorable event for guests. Image source
Case study: Royal Carribbean’s Bionic Bar
The Bionic Bar used by the Royal Caribbean cruise ship uses robotic bartenders to mix and serve drinks, offering a futuristic experience for customers.
5. Offer Takeout and Delivery
The COVID-19 pandemic has fundamentally shifted the dining landscape, making food delivery and takeout services not just an option, but a necessity. Even post-pandemic, 84% of people expect restaurants to continue offering these services. For restaurant owners, this is an opportunity to expand their customer base and increase restaurant sales. In fact, restaurants that embrace online ordering have seen an average sales increase of 11–20%.
Implementing Effective Takeout and Delivery Strategies
| Aspect | Details | Examples of Companies |
|---|---|---|
| Choose an Online Ordering System | Select a system that is user-friendly and integrates well with your restaurant's operations. | GloriaFood, MenuDrive, UpMenu, BentoBox, etc. |
| Diverse Payment Options | Accommodate various payment methods including cards, digital wallets, and cryptocurrencies. | MasterCard, credit card, Apple Pay, cash, cryptocurrency (e.g., Starbucks, Ocean Blue, Subway accept Bitcoin) |
| Organize Your Space Efficiently | Dedicate separate areas for order packing and customer waiting to streamline operations. | Starbucks (with designated mobile order pickup areas), Chipotle (separate lines for online orders), Domino's Pizza (specific zones for carryout and delivery orders) |
| Delivery Options | Decide between hiring drivers for in-house delivery or collaborating with third-party services. | In-house drivers, DoorDash, Uber Eats, GrubHub, etc. |
In-House vs. Third-Party Delivery
While outsourcing to delivery companies is a common practice, there are benefits to having an in-house delivery team:
- Control Over Service Quality: You have more direct oversight of the delivery process, ensuring that your brand's standards are consistently met.
- Professionalism: In-house drivers can be trained to uphold your restaurant's service standards.
- Efficiency: Utilize driver apps and route planners to optimize delivery routes, saving time and costs, and improving overall efficiency.
Case study: Roaming Rooster
At Roaming Rooster, customers have the convenience of choosing between online ordering for pickup and Uber Eats delivery, showcasing the restaurant's adaptability to modern dining preferences. Image source
6. Provide an Unforgettable Customer Experience
Deloitte's research indicates that 43% of customers are looking for restaurants to exceed their expectations or surprise them. This is where exceptional customer service becomes a game-changer, transforming a simple dining experience into an unforgettable one.
Inspirational Examples of Remarkable Customer Service
- Starbucks' Sign Language Initiative: A Starbucks barista learned sign language to assist a deaf customer, showcasing a commitment to inclusivity and personalized service. Image source
- Burger King's Act of Kindness: Tina Hardy, a Burger King employee, provided immediate care to Rebecca Boening, a customer experiencing a diabetic emergency. This act of kindness and attentiveness not only helped the customer but also demonstrated the level of care the restaurant staff is willing to provide. Image source
Tactics to Deliver "Wow" Customer Service
| Customer Service Strategy | Description |
|---|---|
| Get to Know Your Audience | Understand your customers' preferences, habits, and expectations to tailor your service accordingly. |
| Predict Customer Needs | Anticipate the needs of your customers before they even express them to enhance the dining experience. |
| Encourage and Act on Reviews | Ask customers to leave reviews and use their feedback for continuous improvement. |
| Thrill Diners with Food Design | Invest in the presentation of your dishes for a visually stunning meal that enhances the experience. |
| Adopt New Technologies for Service | Utilize the latest technologies to streamline service, from ordering to payment. |
| Personalize and Go the Extra Mile | Add personal touches in service, food, or ambiance, and always seek to exceed standard service. |
7. Always Stay on the Legal Side of Restaurant Management
In the restaurant industry, adherence to legal standards is not just about avoiding penalties; it's crucial for maintaining customer trust and loyalty.
Andrew Pierce, CEO at LLC Attorney, highlights the severe consequences of unlawful practices in restaurants. Common legal issues include unsafe work environments, workplace discrimination or harassment, unequal pay, lack of permits/licenses, and health code violations.
“The most common cases of breaking the law among eating places are unsafe work environments, discriminatory behavior or harassment in the workplace, unequal pay, lack of permits/licenses, health code (food safety and handling) violations. Failing to keep your restaurant compliant with rules and regulations on the federal, state, and local levels concerning labor laws, occupational safety, or customer health protection may result in lawsuits, monetary fines, and reputational damage. Such legal scandals make customers churn and eventually result in restaurant closures.” (Andrew Pierce, CEO at LLC Attorney)
The Risks of Non-Compliance
Ignoring legal requirements at the federal, state, and local levels, especially concerning labor laws, occupational safety, and customer health protection, can lead to lawsuits, monetary fines, and severe reputational damage. Legal scandals can drive customers away, often resulting in the closure of the restaurant. High-profile cases like the Spotted Pig and Willow Inn in NYC, which faced allegations of sexual harassment, racism, wage theft, and harassment, underscore the importance of legal compliance.
Legal Compliance Checklist for Restaurant Owners
| Legal Compliance Area | Action Steps |
|---|---|
| Adhere to Food Safety Standards | Follow the FDA’s Food Code and establish a robust food safety and hygiene policy. |
| Implement an Employee Code of Conduct | Enforce a zero-tolerance policy for harassment or discrimination in the workplace. |
| Comply with Labor Laws | Ensure adherence to laws regarding employees' wages, tips, and overtime. |
| Develop a Workplace Safety Plan | Create and implement an injury prevention plan to ensure worker safety. |
| Acquire Necessary Licenses and Permits | Secure all required licenses and permits for your restaurant's operation. |
FREE Resources for Restaurant Owners
Takeaways
- Create a Welcoming Atmosphere: Use color and shape psychology in your restaurant's design to create a friendly and inviting environment.
- Segment Your Audience: Identify and cater to different customer segments based on needs, demographics, geography, psychographics, and behavior.
- Incentivize with Rewards: Implement a loyalty program offering both monetary and non-monetary rewards like discounts, bonus points, and personalized gifts.
- Incorporate Interactive Technologies: Adopt innovative technologies like QR code menus, self-service kiosks, and interactive dining experiences to engage customers.
- Offer Takeout and Delivery Options: Provide convenient takeout and delivery services, ensuring you have a user-friendly online ordering system and diverse payment options.
- Provide Exceptional Customer Service: Train your staff to understand and anticipate customer needs, and always aim to exceed expectations with personalized service.
- Ensure Legal Compliance: Adhere to all relevant laws and regulations, including food safety standards, labor laws, and obtaining necessary permits.
- Focus on Food Quality and Presentation: Consistently offer high-quality food and pay attention to presentation, making each dish visually appealing and Instagram-worthy.
- Engage and Respond to Customer Feedback: Actively seek customer reviews and feedback, and use this information to make improvements and show customers they are valued.
- Build a Strong Online Presence: Utilize social media and digital marketing to connect with customers, promote your brand, and keep your audience informed and engaged.
By following these tips, new restaurant owners can create a memorable dining experience that not only satisfies customers but also turns them into loyal patrons.