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It's surprising how many business owners in the hospitality industry underestimate the power of customer retention, considering how important they are to success. In pursuit of growth, they bypass the gold mine that customer loyalty represents. They fail to understand that there is more to it than keeping current profits. Returning customers is one of the most critical factors to ensure sustainability and future business growth.
Before I get into practical strategies for TAKING, let's start with an attitude: Realize that you are not serving or selling to “customers” but to “guests,” a term you should use when you think or talk about them and when you talk to them. This isn't just marketing good sense; there is a fundamental difference between the two persons. A customer buys my product or service in a purely transactional action that may or may not be repeated. A guest is someone to whom you open your home and treat as family; it's a relationship that I work to cultivate in the hope that it will continue.
Ignore or mistreat guests and they will let everyone know what a bad experience they had. This can be even more damaging if you are in a franchise business like we are at Ford's Garage restaurants, where a bad experience at one location can tarnish the reputation of the entire franchise. Consistency is vital in franchising, and ensuring a uniform guest experience across locations is essential. Individual locations may reflect their markets' unique preferences in menus and other features, but the one thing that should be repeated everywhere is exceptional customer service. Every guest everywhere wants to feel well taken care of, even if the business has made a mistake (that's been fixed, of course).
Disappointed guests don't just stay away from your business; they can also keep others away, a problem that has grown exponentially with the popularity of online reviews. So it's definitely better for your bottom line to nurture loyalty. Harvard Business Review reports that it is 5-25 times more expensive to attract new guests than to retain existing ones, and increasing retention rates by just 5% can increase profits by a staggering 25-95%.
Winning back a lost guest is not impossible, but in the face of these odds, it takes one proactive and honest approach. It starts with understanding why the customer left in the first place, addressing any issues or concerns they had, and demonstrating tangible improvements. Personalized offers or incentives can also help rekindle their interest.
With all of this in mind, why not put your energy into keeping the guests you already have?
The critical risk area for losing a guest varies, depending on the industry and individual guest experience, but three key touch points offer opportunities to amplify LOYALTY. Just remember that they can also turn guests off if not done right.
Connected:
1. Before Visiting: Make connections with the community and make a name for yourself.
Expand your presence (in the minds of the neighborhood and guests) by co-sponsoring events with local businesses, celebrating community events, and partnering with schools and youth groups. For example, a favorite guest for Ford's Garage is Burgers of Fame, which names hamburgers after beloved local personalities. Community engagement not only increases brand visibility, but also builds trust and LOYALTYdriving guest retention.
2. During the visit: Make guests feel welcome and appreciated.
Greet them warmly, get to know returning guests and their preferences, and provide responsive service to everyone. Creating a welcoming and personalized experience can leave a lasting impression on guests, driving loyalty and repeat business. Treat them like your mother, father, brother or sister.
Connected: Do you want customers to love you? Treat every customer as if they were your only customer
3. After and between visits: Invite them back with meaningful communication.
Maintain the relationship after the guest leaves. Ask for feedback with (not too detailed) surveys, send a thank-you note or gift for an important purchase, and make loyalty programs worth joining with special offers of real value. Demonstrating appreciation and actively seeking feedback shows guests that their satisfaction matters, prompting a the feeling of loyalty and goodwill.
Connected: 25 ways to turn a one-time buyer into a repeat buyer
Provide exceptional service at all times
If a business can do just one thing to keep guests coming back, it should prioritize providing consistently exceptional customer service and maintaining product quality. Never lower costs with everything they touch and see; above all, do not skimp on anything that affects the quality of the product. Every interaction with a guest is an opportunity to strengthen the relationship and reinforce their brand loyalty.
While price, product quality, and convenience undoubtedly influence customer decisions, customer service often emerges as the main sticking point. Good service can soften the impact of deficiencies in other areas, but poor service can be a severe blow even if other areas are satisfactory. The guests are willing to pay a premium for exceptional hospitality, and it is often the differentiating factor among competing businesses.
Businesses that prioritize guest satisfaction and loyalty are better positioned to withstand competitive pressures, achieve sustainable growth and thrive in the long term. It's not just about keeping guests happy; it's about building lasting relationships that drive mutual value and success. Offer a fantastic guest experience with a quality product and an entertainment component – that's what I call it “fun” in the restaurant industry – and you will win.