How to Be a Pro at Customer Retention in Your Restaurant (Updated Summer 2022)
How to Be a Pro at Customer Retention in Your Restaurant (Updated Summer 2022)
Posted By
June 6, 2022

Every restaurant has customers, but does every restaurant have regulars? It is important to remember that a loyal and current customer spends up to 67% more than a new customer. It is even more important to remember that 70% of customers will never return to your restaurant again. That being said, as a restaurant owner, it's time to care about customer expectations and customer retention.

What is Customer Retention?

First off, let us explain what customer retention is. Tech Target defines customer retention as a metric that measures customer loyalty, or the ability of an organization to keep its customers over a lengthy time period. 

Customer retention is a guide for your future sales. It is a way of understanding buying behaviour, forecasting, and emotional ties to your brand. Buying behavior is the actions taken by customers before buying your food. Customer expectations are the presumption of your restaurant's quality. Forecasting is a way of estimating the future of your restaurant sales either daily, weekly, monthly, or even yearly based on purchase history. Emotional ties to your brand are the relationship your customer has with your identity.  

Remember, investments in customer retention are low risk and high reward. It should be considered a part of the customer journey. Utilize your restaurant staff, happy customers, and loyalty programs to achieve your business model. 

How to Measure Customer Retention?


Just like other key metrics in your restaurant strategy, the customer retention rate is one of them.

Customer Retention = ( (# Customers at End of Month - # Customers Acquired During Month) / # Customers at Start of Month) ) X 100

For example, if you have 61 regular customers, acquire 20 new customers, and unfortunately have a churn rate of 40 (customers who don't return). This is how you would find your customer retention.

((41 - 20) / 40 ) x 100 = 52.5%

This is not a good customer retention rate to have. If your restaurant’s customer retention rate is any percentage below 80%. It is time to start a strategy to retain current customers and build customer relationships.

Where to Start with Customer Retention Strategies?

Now that you understand what customer retention is, you can start your plan to start retaining loyal customers. Start at the beginning of the customer journey.

Identify & Recognize your Frequent Customers 

It is as simple as the sitcom Cheers and the theme song ‘Where everybody knows your name”. Start taking notes on your customer satisfaction:

  • How often a week do they come to your restaurant?
  • Where do they like to sit at your restaurant?
  • What food and beverage items do they order?
  • Do they come with their family or friends?

Once you start to recognize the customer experience, you can start making them feel they belong. It is all about going that extra mile in restaurants or any business.

Build Relationships

Okay, you have located your common customers and your infrequent customers. Now you need to start making both feels at home. Make sure you learn their names. It is very important to say hi to them by the name they prefer. Next, get to know them. Ask them about their job, family, life events, and favorites on your menu. Have customers fill out a customer survey to find out even more information. Use these questions to build a rapport with them. Once you know a bit about them, you can start making conversation and anticipating their customer service needs. 

Set up a Frontline Staff Meeting 

Continuing along on the customer journey, it isn’t enough for you to know your loyal customers. Go that extra mile. Your front-line staff should know them too. It is the key to keep customers happy. During the start of shift meetings, make sure to encourage staff to look out for these valuable customers.

Set up a contest with your staff:

  • Give a free dessert to a staff member who can name the most regulars. 
  • Offer a free staff meal to the staff member who talks to a regular customer out of their table section. 
  • Offer the staff member to pick their section on the following Friday if they are able to find out life events from a regular customer. 
  • Give a staff member a holiday shift off for a customer they retained themself. 

Restaurant staff and company culture go hand in hand. The more your front-line staff engages with these frequent customers, the more likely they will return. It is all about customer trust. As well, other first-time customers will notice the positive customer experiences in the restaurant and feel welcome to return again. 

Customer Loyalty Program

Customer retention rates are ideal to keep track of and a key role in a customer retention strategy. A way to do this is by creating a customer retention program aka a customer loyalty program. Giveaways, coupons, and special events are all good examples of going that extra mile.

  • You can use punch cards to monitor their frequency at your restaurant. 
  • You can offer contests; such as the customer coming in every Friday in the month of March to receive a free menu item. 
  • You can offer an in-house contest and give away surprise gifts
  • You can offer coupons to happy customers who leave multiple customer feedback reviews. 
  • Throwing an event for customers involved in the customer loyalty program will be a perfect way to practice customer engagement and build those relationships. 
  • Giving away gift cards around the holidays.

Here are two sites that offer customer retention programs built-in to their POS. 

  1. Lightspeed
  2. Toast 

Try this opportunity out and discover the sales increase with repeat customers. Repeat customers can become your marketing tool. Therefore, it is a win-win situation. 

How Online Reputation Management Helps 

It is important to be aware of your online presence when dealing with repeat customers and customer loyalty. 

Online Communication & Customer Reviews 

When potential customers search your establishment online, they will check to see how you deal with your reviews. One of the best customer retention strategies you can use is receiving customer feedback from those returning customers. Using a tool like Localyser can provide you with a QR code for your current customers to scan and be directed to a landing page to leave their feedback. This way, you can have a positive rapport online with your loyal customer base. 

Negative Reviews 

Negative reviews need to be addressed. Prospective customers who are looking to make your restaurant their regular spot need to know you take care of them. Negative review responses are a great showcase to let future customers and current customers know that you care about their dining experience. 

Positive Reviews 

The best way online to grab the attention of your current customers is to respond to their feedback. Make sure their positive feedback is responded to. Responding to positive reviews are just as important as negative feedback. A customer needs to feel they added value to the place they feel loyal to. 

Email and SMS Marketing 

Stay engaged with email newsletters. Have a customer success plan and offer returning customers a monthly email newsletter about what's happening in the restaurant. An Email newsletter can include coupons, what is happening in your restaurant, and sharing stories about staff and loyal customers. Customer relationship management is all about consistent service and that consistent service can be through emails. An essential tool to utilize is SMS marketing. It is an essential tool because most customers spend so much time on their phones. Reach loyal customers by asking for their phone numbers and sending loyalty program reminders. 

Social Media Platforms 

The restaurant industry has progressed with the rest of the world and social media can be your best asset when used correctly. Sharing your positive reviews is social proof and an easy marketing campaign. Social media is the place where your prospective, current, and loyal customers will be when they are physically in your restaurant. Therefore, your social media platforms should emulate your restaurant and give off the same energy and appeal that attracts your in-person customers. 

What to Post: 

Make sure you highlight the best of your restaurant and moments where loyal customers and staff are happy. 

  1. Highlight your best eye-catching dishes
  2. Take photos of your happy loyal customers and tag them
  3. Take pictures of your popular drinks
  4. Share photos of your employees 
  5. Share a sunset photo of your patio 

Final thoughts 

Customer retention is all about those loyal customers and it all starts with a good experience in the restaurant and ends with how future customers see your restaurant online. Go that extra mile. Start tracking your reviews, and communicating with your customers online. The relationship in-store should be no different than online. Stay engaged and customers will return. 

Localyser can help. Reach out today to learn how easy Localyser makes managing restaurant reviews across multiple websites and more. Take the first step and start retaining customers.

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