"People will easily forget what you say or what you do, but they remember how you make them feel!"
Loyal guests demonstrate their loyalty through certain behaviors that benefit your restaurant. These behaviors include resisting offers from the competition, recommending you to others, and working with you when they experience a service breakdown. The payoff is described in the four R’s:
Retention – Guests who continue to do business with you provide a solid base for success.
Your most loyal guests should cost you the least to service because they are not as sensitive to competitive pressures.
Referrals – Loyal guests encourage others to choose your restaurant or product over the competition, saving you the substantial cost of acquiring new guests. Where yesterday’s “word-of-mouth” could influence a dozen individuals, today’s “word-of-mouse,” via e-mail or blogs, can influence thousands.
Reputation – Loyal guests speak well of you. They increase public support and positive interest from investors, suppliers, future employees, the media and even regulatory bodies.
Revenue – Loyal guests give you a larger share of their business, which increases overall revenue and the recognition that comes with success. Cross selling and up selling to existing guests is the primary growth strategy for many restaurants and is particularly lucrative with loyal guests.
By ensuring your guests are—more than satisfied—dazzled, your restaurant can expect to be rewarded with behaviors exhibited through the four R’s. This applies to all types of restaurants, private or public and all types of guests, internal or external. Guest loyalty has become critically important for the public sector and often can result in increased compliance, patience from constituents, enhanced public image, increased public support, and the potential for greater support for budget requests. If your concern is primarily internal guests, you can also reap the benefits of their loyalty through higher employee retention, better collaboration and cooperation, higher morale, better responses to change and resilience during restructuring.
Regardless of your venue, business, or guest type, the risk of not meeting and exceeding your guests’ expectations is that they will begin to exhibit non-loyal behaviors such as switching to a competitor or communicating their discontent with your restaurant to several if not hundreds or thousands of other existing and/or prospective guests. The cost to your restaurant of these non-loyal behaviors is debilitating. Every situation is unique, but the following data reflects the general truth about the effects of non-loyal behaviors. It costs an average of five times as much to attract a new guest as to retain an existing one.
● On average, dissatisfied guests tell 10 to 16 people about their negative service experiences.
● It takes 12 good service experiences to overcome a single bad one.
● 91 percent of unhappy guests will not buy again from the company that displeased them.
● Of guests who switch to a competitor, up to 80 percent say that they were satisfied with the provider they left.
The cost of losing guests is not only a threat to an restaurant’s existing market share, but also
to its potential for future growth in the market. And, the expenditures in time and money made to overcome negative guest experiences consume budgets and manpower that are most likely already overextended. Restaurants can help prevent non-loyal guest behaviors and benefit from the four R’s by making each guest feel their expectations are met and even exceeded during every interaction with the restaurant.
I will be talking in the next few posts about 4 key issues that drive guest loyalty.
