Opinions expressed by Entrepreneur contributors are their own.
It’s surprising how many business owners in the hospitality industry underestimate the power of retaining customers, considering how important they are to success. In pursuing growth, they overlook the goldmine that customer loyalty represents. They fail to realize that it’s about more than maintaining current profits. Keeping customers coming back is one of the most critical factors in securing the future sustainability and growth of the business.
Before I get into practical strategies for retention, let’s start with an attitude: Realize that you’re not serving or selling to “customers” but to “guests,” a term you should use when you think or talk about them and when you speak with them. It’s not just feel-good marketing puffery; there’s a fundamental difference between the two personas. A customer buys my product or service in a purely transactional act that may or may not be repeated. A guest is someone I open my home to and treat like family; it’s a relationship that I work to cultivate with the expectation that it will continue.
Ignore or mistreat guests, and they’ll let everyone know what a bad experience they had. This can be even more damaging if you’re in a franchise business like we are at Ford’s Garage restaurants, where a bad experience at one location can tarnish the reputation of the entire franchise. Consistency is vital in franchising, and ensuring a uniform guest experience across locations is paramount. Individual locations may reflect their markets’ unique preferences in the menu and other features, but the one thing that must be replicated everywhere is exceptional customer service. Every guest everywhere wants to feel they were well taken care of, even if the business made a mistake (that was fixed, of course).
Disappointed guests don’t just stay away from your business; they can also keep others away, a problem that’s grown exponentially with the popularity of online reviews. So, it’s undeniably better for your bottom line to nurture loyalty. The Harvard Business Review reports that it’s 5-25 times more expensive to attract new guests than to retain existing ones, and increasing retention rates by just 5% can increase profits by a surprising 25-95%.
Winning back a lost guest isn’t impossible, but in the face of those odds, it requires a proactive and sincere approach. It starts with understanding why the customer left in the first place, addressing any issues or concerns they had and demonstrating tangible improvements. Personalized offers or incentives can also help rekindle their interest.
Given all that, why not put your energy into keeping the guests you already have?
The critical risk area for losing a guest varies, depending on the industry and the individual guest’s experience, but three main touch points offer opportunities to reinforce loyalty. Just remember that they can also drive guests away if not done right.
Related:
1. Before the Visit: Establish community bonds and make a name for yourself.
Expand your presence (in the neighborhood and guests’ minds) by co-sponsoring events with local businesses, celebrating community happenings and partnering with schools and youth groups. For example, a guest favorite for Ford’s Garage is our Burgers of Fame, which names hamburgers for beloved local personalities. Engaging with the community not only enhances brand visibility but also builds trust and loyalty, driving guest retention.
2. During the Visit: Make guests feel welcome and appreciated.
Greet them warmly, recognize returning guests and their preferences, and provide responsive service to all. Creating a welcoming and personalized experience can leave a lasting impression on guests, fostering loyalty and repeat business. Treat them like your mom, dad, brother or sister.
Related: Want Customers to Love You? Treat Every Customer Like They’re Your Only Customer
3. After and Between Visits: Invite them back with meaningful outreach.
Keep the relationship going after the guest leaves. Ask for feedback with surveys (not too detailed), send a thank-you note or gift for a significant purchase, and make loyalty programs worth joining with special offers with genuine value. Demonstrating appreciation and actively seeking feedback shows guests that their satisfaction matters, fostering a sense of loyalty and goodwill.
Related: 25 Ways You Can Turn a One-Time Buyer Into a Repeat Buyer
Deliver exceptional service at all times
If a business could do just one thing to keep guests coming back, it should prioritize delivering consistently exceptional customer service and maintaining product quality. Never reduce costs with anything they touch and see; most of all, don’t skimp on anything affecting product quality. Every interaction with a guest is an opportunity to strengthen the relationship and reinforce their loyalty to the brand.
While price, product quality, and convenience undoubtedly influence customer decisions, customer service often emerges as the linchpin of retention. Good service can mitigate the impact of shortcomings in other areas, but poor service can be a severe blow even if other areas are satisfactory. Guests are willing to pay a premium for exceptional hospitality, and it’s often the distinguishing factor between competing businesses.
Businesses prioritizing guest satisfaction and loyalty are better positioned to weather competitive pressures, achieve sustainable growth and thrive in the long run. It’s not just about keeping guests happy; it’s about building lasting relationships that drive mutual value and success. Provide a fantastic guest experience with a quality product and an entertainment component — I call it “eatertainment” in the restaurant industry – and you’ll win.
