2024 may be one of the hardest years of all time for the restaurant industry. We are faced with labor costs jumping by percentages we have never seen, fewer people wanting to work in restaurants, ingredient costs rising every month, and a customer base trying to deal with the effect inflation is having on their own lives. Consumers are having a hard time staying loyal to restaurants that are continually raising prices and cutting portions.
So how do you win the game by retaining customers and creating loyalty during these difficult times? Here are a few suggestions.
- Offer a Loyalty Program. That’s about as obvious as it gets. In a series of recent surveys one out of 2 people surveyed said they download restaurant apps for their loyal programs and 57% percent said they prefer restaurants with loyalty programs. Loyalty programs not only encourage repeat visits and spending, but also give you a direct line of communication with your customers. They create double the advantage for restaurateurs by increasing guest frequency and lowering advertising costs.
- Embrace Delivery. Here are some staggering statistics. 63% of people 18 to 29 years old have used a multi-restaurant delivery website or app service in the past 90 days, followed by 51% of those 30 to 44 years old, 29% for those 45 to 60, and 14% for those 60 and over. Ordering food to be delivered to your home, your work, or your hotel is not going away and these stats tell us that everyone is doing it. Capture more of this audience by adjusting your packaging to ensure food travels better. Focus on timeliness so drivers do not have to wait and treat the drivers with respect, making them a part of your team and encouraging them to handle your product with care. Put a little something extra in every bag, like chocolates, mints, or a small cookie making consumers feel like they are appreciated and adding to their value perception.
- Focus on Hospitality. Just being friendly is a loyalty driver. People like to eat where people know their name, their favorite table, and what they like to eat. Finding ways to connect with people builds relationships and relationships build loyalty. Simple things like a cashier looking at a guest when asking what they would like goes a long way. Commenting on their beautiful scarf or saying hello to their children builds a bridge. Simply asking the necessary questions like “small, medium, or large?” in a non-robotic way sets a relaxed tone. If trained properly your employees can make personal connections in one-minute intervals and your business will reap the benefits
- Manage Your Menu. Use your menu to create perceptions of value. Don’t decrease portion sizes. Shop for less expensive proteins to maintain the size of entrees. Use fillers appropriately. For example, grains are extremely popular for their health benefits, inexpensive, and can really bulk up the size of both hot and cold dishes. Lean into vegetables. Chefs are doing amazing things with vegetables these days allowing them to command the center of the plate. If you must cut sizes, offer an extensive small plates or shareable menu. This allows customers to sample multiple items inexpensively and often leads to higher check averages.
- Make changes slowly. Always start with a target in mind by costing your menu items and using sales trends to build a theoretical cost. Then manipulate prices to get better margins. You will find that raising your 3 best sellers by 25 cents can often help your costs more than raising the price of 10 items by 50 cents. Make small changes in prices that have the biggest impact and do them a few at a time monthly or quarterly. Sudden large changes create shock, small and incremental ones go unnoticed.
If you are waiting for “the good ole days” to return, well that’s not going to happen. Honestly, they never were that great anyway. Restaurants have always been plagued with multiple challenges and the ones that survive are the ones that evolve. These are difficult times, but these are also times that restauranteurs are easily armed with more data than ever. Use the data to make smart decisions, embrace trends, and evolve your business.