In this economy, it is essential to keep existing customers and turn them into loyal advocates, especially considering the cost of acquiring new customers. Recommendations from loyal customers are also often the most powerful marketing messages. According to the National Restaurant Association’s 2008 Operator Survey, repeat customers represent a majority of sales for fullservice restaurants – accounting for 75% of sales at family dining restaurants, 70% at casual dining restaurants, and 60% at fine dining restaurants.

“You have to do lots of things to encourage extra visits and get customers to think twice before they make their choice – you need to provide the tiebreaker,” says Dennis Duffy, president, Definitely Duffy, a company specializing in loyalty programs, database analytics, and customer research. “There’s no silver bullet,” he cautions. “Loyalty programs are just one tool, and they require both a long-term investment and commitment.”

To encourage repeat visits and to develop loyalty, restaurateurs are using a variety of strategies, including offering “soft” rewards – which have little or no costs associated with them, e.g., an amuse bouche, preferential seating, priority wait list, random comps, as well as membership clubs and formalized loyalty programs that collect points redeemable for meals and other experiences. However, many restaurateurs believe that long term loyalty results from developing relationships with their customers, i.e., recognizing and acknowledging them when they come in and making them feel valued and special, not from rewards or incentives alone. A recent study by Loyalty One/Colloquy, “The Difference Engine: A Comparison of Loyalty Marketing Perceptions Among U.S. Consumer Segments,” underscores the opportunity – nearly 62% of survey participants said that special treatment was important to them, and yet only 16% said they got special treatment from loyalty programs.

Creating strong bonds with customers. Paul Cunningham, president, Schreiner’s, Fond du Lac, WI, says that connecting with customers begins with making them feel at home and that the staff is there to take care of them. “More than anything, people want to be recognized when they’re in the restaurant, so we all make a point to get to know them and talk to them while they’re here. They want to connect with us, too,” says Paul. “Our regulars keep track of other regulars and let us know when something happens to someone that they feel we should know about.” To acknowledge a special celebration, illness, and when someone has passed away, Paul created three cards printed with the restaurant’s logo – one is plain, one says “get well,” and the third, “sympathy.” Everyone on staff signs the card and writes a personal message. “I’ve gotten pretty good at tracking down addresses, especially next of kin of deceased guests. And, we frequently hear how much the cards mean to people.”

“More than anything, we try to be in the moment and be present with customers, reading tables to see who wants to talk, who doesn’t want to be interrupted, etc.,” says Dan Sachs, co-owner, Bin 36, Chicago, IL. “There’s no substitute for human contact in the restaurant business. We try not to use comps and other freebies as a substitute for interacting with the guest – it’s an easy habit to get into. On a whim we’ll buy a customer something, but not as a plan. The only place this happens is at the bar because there’s a special bond that forms between the bartender and many regular customers, so bartenders have a budget for comps.”

“We like our managers to be on the floor talking with customers, so this summer we created a beautifully printed coupon for them use to begin a conversation with guests,” says Jill Trecker, manager of guest loyalty, Souplantation & Sweet Tomatoes, headquartered in San Diego, CA. The managers reported that while guests appreciated the coupons, what surprised them was how engaged customers became in conversation and how many relationships developed as a result. Coincidentally, at a recent meeting of the company’s guest advisory group (The Kitchen Cabinet –12 moms who fit the restaurants’ demographic), members were asked what their expectations were regarding service and how the restaurants could exceed them. The unanimous response was, “Just stop by my table and talk for a second, if you have a moment.” And, they said even if the manager didn’t have time to visit their table, but was visible on the floor – engaged with other customers – that was sufficient, a kind of halo effect. “Connecting with customers – creating trust, respect, and being responsive – is part of our core values,” says Jill.

Rewarding loyalty with random acts of kindness and little extras. “My father and I have struggled with the idea of creating a formal loyalty program, which offered some types of rewards and/or discounts,” says Chad Mackay, co-owner, El Gaucho restaurants, headquartered in Seattle, WA. “We decided these formal programs with cards and points didn’t feel intimate enough for our guests.” Instead, they recognize special moments like birthdays (reservationists are trained to ask if there is special occasion) and thank guests they see frequently for their patronage on a random basis. “They are unexpected ‘rewards’ and underscore the emotional bond we have with many customers,” explains Chad, “and are delivered by our service teams who are given permission to do something that can create these emotional anchors for us.” These random rewards range from tableside preparation of Bananas Foster for which the restaurants are known, to a complimentary dinner.

“By having staff go a minute or two out of their way, taking an extra step, customers realize that we really care about them. It’s much more powerful than handing someone a coupon for 10% off on their next visit – which will probably lie dormant in their desk drawer.” – Mitchell Sjerven, proprietor, Wine Cask, bouchon, and Seagrass, Santa Barbara, CA

Mitchell Sjerven, proprietor, Wine Cask, bouchon, and Seagrass, Santa Barbara, CA, also empowers his staff to do the little things that often make a big difference in a customer’s experience and are the things people tell their friends about. “When customers ask how a dish is prepared, the server will tell them, but also print out the recipe, tuck it into a small folio, and present it along with a card with the restaurant’s email,” says Mitchell, “Plus, we tell the customer if he or she has any questions to email the chef who will be happy to answer.” If someone asks for directions to a nearby winery, instead of simply telling them, servers will ask where the guest is staying, go to the computer, and print out directions from MapQuest. Mitchell explains, “By having the staff go a minute or two out of the way, taking an extra step, customers realize that we really care about them – it’s much more powerful than handing someone a 10% coupon for their next visit, which will probably lie dormant in their desk drawer.”