A survey of 2044 hospitality businesses conducted by retail intelligence analysts Retail Active has found that operators are far better off concentrating on promoting repeat business from existing customers than attracting new ones, with the former typically spending a third more than the latter.
Julian Chamberlain, managing director at Retail Active, said that repeat customers should be ‘at the heart’ of every restaurant business as they are far more profitable than new ones.
“It proves beyond doubt the value of holding on to your existing customers – especially in challenging trading conditions,” he said. “(They) have a better understanding of your offer, plus they are easier to find and communicate with.
“Offering a compelling reason for customers to come back again and again is essential and maintaining high levels of customer service has never been more important.”
Retail Active has constructed a five-point guide to keeping existing customers happy:
- Always seek to identify and solve complaints quickly. Customers will have much more trust and increased loyalty if you do this.
- Keeping customers loyal is critical, so providing a great product and service is vital to success.
- Front Line is Bottom Line. Keep your customer facing teams highly motivated and focussed. Its worth remembering that every dissatisfied customer will tell up to 10 others of any poor experience.
- Always look for ways to exceed your customer’s expectations. Often ways to exceed expectations cost a minimal amount and can give huge financial returns.
- Always consider the Lifetime Value (LTV) of a customer. To do this take the average transaction size and multiply this by the number of purchases the customer makes from you each year. Only then can you fully appreciate just how important existing customers are.