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Retention: Its simpler than you think.

You give some, you get more.

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Statistics suggest that, if a customer has a flawless experience on the first time visit to your restaurant, the chances for him to return a second time are about 40%. If he returns a second time to a flawless experience still, the chances for a third visit are about 42%. If your customer then visits a third time and is still treated to a flawless experience, the chances for retention have now increased to over 70%.

Jon Taffer, celebrity bar consultant and television personality, says “it’s crucial to know who your first time customer is.” How do you know if someone is visiting your restaurant for the first time? Here’s one way you can identify a first timer (and do a bit of marketing while you’re at it):

Give coupons away for a free meal. Let’s paint a picture – you give away 100 coupons for a free meal. Each coupon is worth INR 200 (or how much ever a full meal at your restaurant costs). A local consumer happens to get this coupon – let’s call him Dave. When Dave walks into your restaurant flashing his coupon, you know that he’s a first time customer. (Obviously, your coupons should only reach people who have never been to your fine establishment before). Your team should place a red napkin on his table. That way, everyone is aware that Dave is a first timer.

Now that he is seated, give Dave his free meal and upsell him a drink or a dessert. When he’s done with his meal, either you or a manager (remember, it must be someone of importance) go over and talk to him. Ask him a couple of questions – “Dave, how did you like your meal? Are you full? Great! You HAVE to try my Bangers and Mash the next time you’re here. It’s the best in the city.”

Now, you take action. Pull out your personal business card and write at the back – “15% off on Bangers and Mash” (Do NOT be stingy. You also don’t want to put an expiry date on that). Now, Dave has a reason to come back for the second time.

Let me at this point reiterate all the words I’ve typed in bold in the first paragraph. Flawless, flawless and STILL flawless. Your ambience, your service and your product need to do the talking. Everything else is just a bonus.

Dave comes back for a second time. You and him both know he’s here for the Bangers and Mash. Hopefully, the same thing happens – he eats to his heart’s content, you upsell a beverage and you have yourself, a happy customer.

You see what happened here? You aimed to make Dave’s first time experience unforgettable and therefore capitalised on the 40% chance of his return.

Now, play it the same way. Go up to Dave and say, “Hey Dave, good to have you back. I trust you enjoyed the meal – I told you it’s the best you’ll eat. I’ll tell you what, let me give you another card.”

Pull out your chef’s business card (you want him to know that you have professionals backing you) and write on the back – 1 free cheesecake. “Dave, you’re going to love the cheesecake here. I have 5 flavours for you to choose from. The next time you’re here, let the waiter know which one you’d like. I personally recommend the blueberry. It’s just stellar.”

There’s a 42% chance that Dave is coming back for that cheesecake and when he does come back for the third time, you’ve got yourself a regular. Your effort has directly capitalised the >70% chance of his return.

Let’s take look at the commerce of all this.

Assumptions:

Coupon cost = 200

Cost of Bangers and Mash = 200. 

15% of 200 = 30

Cost of cheesecake = 150

You’ve spent: [200] + [30] + [150] = Rs. 380.

You’ve earned:

  • Income from additional items on Dave’s first visit + a 40% chance of his return (let’s not forget that he most likely brought others with him).
  • Income from Dave’s second visit + a 42% chance of his return.
  • Income from Dave’s third visit + >70% chance of a regular customer.
  • Additional customers through Dave.

The point of this scenario is to understand that gaining a loyal customer is not a one-off activity. It requires re-engagement, and the goal here is to spend the effort to bring the same customer back to your restaurant at least three times. 

As a restaurateur, it is important to realise that you are in the business of getting reactions. Your food, beverages, ambience and service are just vehicles to achieve that.

I hope this titbit helps you in gaining a more loyal following for your restaurant.

Stay tuned for more.

All the best. Go get ‘em!

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