Every restaurant operator craves loyal guests. These are people who keep coming back to your venue with the least amount of effort.
They are those who will tell others about your restaurant or dining concept because they enjoy each visit.
But building customer loyalty in the restaurant industry, or any other industry, takes time.
Popular customer loyalty research suggests acquiring a new customer is 5 to 25 times more expensive than retaining an existing one. This data still holds true. The same research suggests that a 5% increase in customer retention can boost profits by 25% to 95%.
Deliverect research has found members who are part of a loyalty program “generate 12-18% more on average incremental revenue” annually compared to non-members.
This means constantly working to attract new guests is a costly endeavor. Meanwhile, customer loyalty is a cost-effective, long-term strategy that increases restaurant sales and profits.
Customer loyalty in the restaurant industry begins with guest experience management and personalized in-house experiences.
It’s not the end of the world though. Even if you’ve been operating for years, you can still start cultivating loyal customers, who can become brand advocates, driving organic growth through word-of-mouth.
In this playbook for restaurant operators, managers, and owners, we’ll explore how to build lasting restaurant customer loyalty and increase repeat business.
The art of delivering an unforgettable experience
Building a loyal customer base begins with a consistent, high-quality, memorable dining experience.
If you manage multiple restaurant locations, or you’re a restaurant group with various F&B brands, this means ensuring the same positive experience across all your venues.
Providing an impeccable service
Impeccable service goes beyond simply taking orders. It requires an attentive and knowledgeable staff who can answer questions about the menu, specials, and dietary needs.
The best teams also anticipate guest needs, proactively refilling drinks and clearing plates efficiently.
When issues arise, your team needs to resolve problems and handle complaints gracefully, turning a negative experience into a positive one.
Consistent quality: The core offering
This is the core of your offering. Every time a guest visits any of your venues, they should get the same high-quality service and dining experience.
This includes maintaining cleanliness and culinary excellence, ensuring every dish is a well-presented delectable delight, and creating the right ambiance.
During busy hours or peak restaurant season, speed and efficiency are also crucial for balancing quality with timely service.
Personalized touches: Making guests feel special
Adding personalized touches makes guests feel special and valued. Using your restaurant CRM, hosts can remember preferences like allergies or seating choices. Celebrating milestones like birthdays or anniversaries with personalized messaging and marketing also strengthens the guest relationship.
Expanding on this, Moataz Morsi, Head of Enterprise Gamified Loyalty Solutions at Gameball, says, “This personalized service, including methods like exclusive invitations and using waiting lists effectively, creates a sense of exclusivity that attracts and retains customers.”
Cultivating restaurant customer loyalty beyond the table
Cultivating loyalty begins with a structured approach to engagement, beyond the dining table.
Here are a few ideas to help you increase guest loyalty in your restaurant or group.
Implementing an effective restaurant loyalty program
Loyalty programs aren’t just for quick-service restaurants (QSRs). They are one of the top ways dining concepts are attracting and retaining guests.
Restaurant loyalty programs are among the top ways to create personalization, from customer-focused offers, to double points, to birthday rewards.
Roughly 63% of full-service restaurants in the US offer a loyalty and rewards program.
“It’s important to identify which type of loyalty program works best for your restaurant type,” explains Gameball’s Morsi. “We’ve seen many restaurants implement programs they’ve seen at other venues only for these programs to fail because they don’t meet customer needs.”
Whether you choose a digital system with points and tiered rewards or a simple, punch card, the program's success hinges on a clear value proposition and ease of use.
Building a community and hosting events
Fostering a sense of community among your patrons can also improve guest loyalty in your restaurant. This can include hosting events, such as themed dinners, wine tastings, or partnerships with local brands like bookstores, flower shops, and others.
Collaborating with local businesses for cross-promotion and supporting local causes also shows a commitment to the community, further strengthening your brand's appeal.
Proactive, personalized communication
Research has found that 39% of diners want to receive personalized loyalty offers.
We highly recommend creating a complete personalized messaging strategy for your loyalty efforts. This should be part of your broader restaurant marketing strategy.
Personalized messaging can vary depending on the communication method your customers prefer, such as WhatsApp messages, SMS, or email campaigns.
You can combine this personalization with successful restaurant marketing tactics like special offers, event invitations, birthday discounts, flash deals, contests, and giveaways.
It should also encompass your social efforts, including responding to positive and negative online reviews and sharing user-generated content, to build a two-way dialogue.
You can use SMS marketing or WhatsApp for timely updates, reservation reminders, satisfaction surveys, and other opt-in messaging options.
The goal is to stay top-of-mind without being intrusive, ensuring your brand remains a positive presence in your customers' lives.
Measuring loyalty metrics for better business and retention
There can be no loyalty in your restaurant or group without measuring metrics. While there are many metrics, the top loyalty metrics are retention rate and frequency, customer lifetime value, and advocacy.
Retention rate and frequency: These measure how frequently a guest visits your venue and multi-location restaurant. "You should have a benchmark or know the benchmark of your industry. So, you need to measure against the benchmark," comments Gameball’s head of partnerships.
Customer lifetime value or CLV: This metric is a key indicator of loyalty. It gives you the total revenue a customer is expected to generate throughout their relationship with your business.
Advocacy: This metric measures a customer's willingness to promote your restaurant.
For example, if a person comes alone or with a friend but later refers others to your restaurant. That’s advocacy. In fine dining, people don’t eat alone. They eat in groups of 2 or more, Morsi notes.
He adds that restaurants can track advocacy “by seeing if a person's initial solo visit leads to later bookings with more people. If you have a referral program, I can measure it by the number of referred customers."
Visibility, AI, and tech for F&B loyalty
Building customer loyalty in your restaurant hinges on customer visibility. Operators should have visibility of their customers. Who are our customers? Who are our VIP guests? Who are our regulars?
“Guests don’t want to feel like they are a new customer every time they visit a venue,” stresses Morsi. “When staff can recognize a guest, it allows for a personal touch that builds rapport.”
This can come as a simple question like: “Do you want the pasta you ordered like last time?” It can be a powerful way to show a guest they are known and valued.
Many brands don’t collect guest data, or do it inefficiently so they don’t know how to use it across the customer journey, missing opportunities to enhance the experience.
By analyzing past behavior, you can identify offers that will keep guests coming back. This data also empowers your team to personalize the experience and offerings, even influencing menu design.
For example, if data shows that 50% of customers prefer pasta with white sauce, you can create more white-sauce pasta dishes to cater to their needs.
“The challenge for staff is knowing how to use this information in real-time,” notes Morsi. This is where the increased use of AI in recommendations becomes a game-changer.
AI can analyze a customer’s history based on item level and instantly recommend upselling items or a preferred coffee. For instance, if a guest "likes their meat dish well done, you don’t have to ask next time or you get the recommendation instantly,” explains Morsi.
In Servme, hosts can add this information as a guest note, which appears whenever they make a reservation or join your waitlist.
Morsi suggests hosts can ask a guest for their mobile number when they seat them to get their history instantly. “This will help personalize every experience. It’s similar to what you do when ordering food for delivery. It can be very effective.”
Further reading: ChatGPT for Restaurants: 10 Creative Ways to Use AI [With Prompts]
Data to collect for your restaurant CRM and loyalty strategy
For loyalty, here’s the top information you need to collect to build your restaurant CRM.
Contact details: Name, mobile number, email, preferences, allergens, dietary restrictions.
Build detailed guest profiles with order history (generated automatically from your POS)
Visit history: You can get this information from your restaurant POS or reservation management system.
Establish feedback loops
Guest surveys: Use automated guest surveys to collect feedback and maintain your level of service and quality.
Online reviews: Keep tabs on top online restaurant review sites and booking platforms to see what guests are saying about their experience. You can also ask guests to leave reviews there to enhance your visibility.
If you’re using a rewards program, you can reward customers with points for information they add via your restaurant website or mobile app.
Further reading: How Personalization Begins with Restaurant CRM Software [Checklist]
Empowering your team: The human element of loyalty
Building loyalty requires a strong, empowered team. Provide comprehensive training that covers hospitality, active listening, and problem-solving, as well as in-depth product knowledge.
Give your staff the autonomy to make on-the-spot decisions to resolve issues and ensure guest satisfaction.
This is supported by fostering a positive culture of hospitality, where management leads by example and exceptional service is recognized and rewarded.
Implementing targeted restaurant marketing and offers
Creating targeted marketing campaigns, including offers, is critical for nurturing guest loyalty. It ensures your messages and offers resonate with your various guest segments, encouraging repeat visits and increased spending.
Here are 3 key strategies for creating targeted marketing.
Guest segmentation
Group your guests based on visit frequency, spending habits, behavior, or preferences.
Here are a few guest segmentation ideas for your guests.
Segment customers based on frequency of visits. For example, segment those who visit any of your venues more than twice per month into ‘Regulars’ and those who haven't visited in over 3 or more months into ‘Lapsed Customers.’
Group guests based on spending or average check size. For example, those who spend AED 500 or more (or $200 or more) per check, as ‘VIP’ or ‘Top Spender.’
You can also group customers based on behavior, like those who attend events or try menus for Valentine’s Day, Halloween, Mother’s Day, among others.
Lastly, segment your audience based on preferences such as ‘vegetarian,’ ‘vegan,’ or ‘coffee lover.’ You can use restaurant reports, like the previous orders history or report, to get this information.
If you’re using Servme’s reservation management system, you can also collect and update this information via data entered in the reservation widget.
Personalized promotions
This strategy involves sending relevant offers based on previous purchases or re-engagement campaigns.
For example, you can send a "We miss you" deal for lapsed customers with 15% off their next meal.
For a "Regular" who frequently orders a specific dish, offer a free appetizer with their next order when that dish is purchased.
For a guest celebrating their birthday, send a personalized message with a complimentary dessert or a 15% their birthday meal.
If you’re using Servme, your guest tags are automatically updated using ‘auto-tags.’
Further reading: 10+ Restaurant Email Marketing Campaign Ideas for Better Sales & Retention
Upselling and cross-selling
This involves recommending items based on past orders or preferences.
For example, if a guest frequently orders pasta, your staff can suggest a new, premium pasta dish or a wine pairing that complements pasta.
For a customer who often orders coffee after a meal, you can recommend a new pastry or dessert to go with their drink.
When a guest orders a main course, suggest a popular side dish or a signature cocktail.
Mistakes to avoid when building loyalty in the restaurant industry
Though all types of restaurants are part of the broad hospitality industry, what you do for a QSR isn’t applicable to a fine dining concept.
Here are some of the most common mistakes when building restaurant customer loyalty.
One size fits all
“One mistake we see often with restaurant loyalty programs is cloning the programs of other restaurants without considering the type of restaurant you are,” reveals Gameball’s Morsi.
“An example of this we recently encountered was a Saudi fine dining restaurant, offering expensive, premium dishes that used a points-based system for its loyalty program. Since fine-dining isn’t a concept you visit every day, points-based isn’t a good strategy,” he explained.
Not combining personalization with rewards
Another mistake is not using guest data to personalize the offerings or experiences.
For example, if a guest ordered vegetarian food each time they visit, rewards or special offerings should be personalized to these dining habits, explains Morsi.
“However, what usually happens is that restaurants, QSR or fine-dining, don’t personalize the rewards,” notes Morsi.
“If you’re running a loyalty program, you can ask people about their preferences, so you can personalize the rewards,” the loyalty expert comments. “If not, you can collect guest information during the dining experience itself.”
Not informing guests of your loyalty scheme
If you want to build customer loyalty in your restaurant, you need to inform guests of the perks of your loyalty scheme, be it a punch card, online rewards program, or something else.
Hard-to-redeem rewards
If you choose to run a restaurant loyalty program, redeeming points or perks should be easy. The harder it guests, the less likely customers will use your program or keep coming back.
With complicated programs, “customers will struggle to understand the benefits, how to get points and rewards, and how to redeem them,” Morsi adds.
“You’re on the Gold Tier, do you want your free drink?” It’s just not worth it, the loyalty expert says.
The long-term ROI of restaurant loyalty
Building lasting restaurant customer loyalty isn't just about fleeting promotions; it's a strategic investment with significant long-term returns.
By consistently delivering exceptional service, engaging guests, using data, and empowering your team, you create a positive feedback loop.
Loyal customers become powerful advocates, driving positive word-of-mouth that reduces your marketing costs and fosters a thriving, sustainable business.
Remember, building loyalty is a continuous journey that requires consistent effort and adaptation. Ultimately, investing in guest relationships is the most profitable investment a restaurant can make, ensuring repeat business and a growing community of devoted patrons.
Ready to transform first-time visitors into loyal regulars? Explore how Servme can help you implement these strategies, boost guest loyalty in your venue or group, and get more bookings.
Nada Sobhi
Marketing
