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5 Ways to Increase Restaurant Profits by Knowing Your Customers

Posted by Frank

Why do your most loyal customer return?

If you can't answer that question, we've got problems that need to be addressed. But no worries, if you want to grow restaurant sales and profit margins you just need to learn who your best customers are. The loyal, frequent visitors better known as your regulars. Targeting regulars can increase a restaurant’s revenues, so accurately identifying and then catering to them is essential to boosting sales.

All people may be created equal, but as one business analyst pointed out, all customers are not. It is essential that managers understand the Pareto Principle (the 80/20 rule) – 80 percent of a restaurant’s sales come from 20 percent of its customers. It’s natural to want to pay attention to all your customer’s needs, but quite simply you don’t need everyone. Yeah, I said it. You can’t please all of the people all of the time, so concentrating on the most profitable niche of your customer base is the wisest business decision to make.

A Harvard study found that if you increase repeat visits by five percent, you can raise your profits anywhere from 25% to a mouthwatering 125%. Marketing studies show that repeat customers cost less than new ones, considering the expense of advertising, media, and other tools necessary to lure new consumers in. (Harvard Business Review)

Here are a few ways to increase profits by growing and catering to your regulars.

1. Breed Loyalty
What breeds loyalty in the über competitive restaurant business? What makes a person willingly spend their money at your place rather than at the café down the street or the bistro on the corner? A number of things, actually: Predictable quality and value of food combined with superior customer service are certainly essential. To foster loyalty, you must be consistent with what you are selling and how you sell it. Customers return because their experience is pleasantly dependable. For instance, Starbucks hires such passionate employees that their customers are willing to pay more for a steaming cup of joe than they would elsewhere.

2. Offer a Loyalty Program
Solid loyalty programs transform a regular customer into a faithful one. Loyal patrons bring friends and family with them on subsequent visits, making them living-and-breathing advertisements for your restaurant, priceless word-of-mouth marketers. Keeping these customers coming back dashes competitor’s sales and guarantees solid sales for you.

3. Make Them Feel Special
Frequent customers should be made to feel special, an attribute people instinctively crave. Promote loyalty by keeping in touch through your blog, mobile app, website, social media like Twitter & Facebook or other means that encourage ongoing one-on-one conversations. Offer promotional discounts – say, a free meal to individuals celebrating birthdays – again, making the customer feel valued by you more so than he is at rival eateries.

4. Listen to Your Regulars
Satisfaction surveys make customers feel that their opinions matter, as well as offer valuable insights that managers can put to good use later. Point-of-sale (POS) systems can print web addresses or phone numbers for questionnaires at the bottom of receipts. Customers who complete surveys can be rewarded with discounts or free food. A small price to pay to help identify what your business is doing right or wrong.

5. Dig into the Data
Get to know as much as possible about your 20% using tools (data scrutiny, surveys, analyses of frequent customer orders, feedback cards, and others) to arm managers with pinpoint information to make the most intelligent business choices. Restaurant managers need to understand the loyal customer’s buying habits, including factors that influence dining decisions. You can never know too much about your regulars, so carefully refining your data on repeat customers is vital. POS systems capture information about buying habits that can be used to encourage return guest visits. Combining this information with specific guest feedback is a powerful way to keep customers coming back.

Making efforts to better understand your regulars and putting this customer knowledge to work, savvy restaurant leaders like you can fortify your bottom line. That’s something to think about the next time you’re in line at your favorite restaurant.

 

What Are Your Thoughts?

Please share your stories, comments, and any other tips that may be helpful!



About Mirus:

Mirus provides decision makers across operations, finance and marketing with actionable intelligence. Our analytic software consolidates transactional information and a host of other data sources to measure and improve restaurant performance. Headquartered in Houston, Texas, Mirus is a recognized leader in restaurant business intelligence.

For more information, please visit www.mirus.com

 

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