The majority of the food businesses focus their marketing strategies on attracting new customers. Since most of the customers that businesses attract through marketing campaigns only visit the online or brick-and-mortar store once, the question has to be asked whether all the effort is worth it.
So, let’s look at whether it’s better to attract new customers or keep existing ones and how this debate applies to the foodservice industry, especially in Australia. Moreover, we’ll also look at ways to turn new customers into returning ones for your restaurant.
Attracting New Customers vs. Customer Retention: Which is Better?
The reality is that not enough attention is paid to keeping the existing customers and turning them into returning ones. According to Forbes, this is especially concerning because businesses have to spend at least five times more to attract new customers than to retain the existing ones!
Another research suggests that increasing your customer retention rate by just 5% can drive up your profit margins by 25 to 95%! These studies show that businesses need to do more to retain existing customers, which should be a central focus of their marketing strategies.
Of course, the implication here isn’t that businesses shouldn’t try to attract new customers, which will always be necessary for new and established restaurants alike. However, there needs to be a greater degree of care when deciding how much to spend on acquiring new customers than spending on your existing customer base.
Marketing experts will tell you that nurturing your existing clientele will have a much better ROI for your business. The simple logic behind this is that your current customers are already familiar with your establishment and most likely enjoy your offerings.
Offering them motivation to return and become regular customers is easier than working extra hard to attract new customers. However, any decent marketing strategy would strike the right balance between attracting new customers and retaining existing ones.
Of course, newer restaurants and cafes would have to focus more, and even solely, on attracting new customers. However, this focus should shift once your business operation matures and hopefully grows.
Why Food Businesses in Australia Need to Focus on Customer Retention
This whole debate is especially true for regions where dining out is a crucial part of the lifestyle, such as in Australia. According to a study, one-third of an average Australian household’s food and beverage budget is spent eating from restaurants and cafes.
The same report estimates that two-thirds of Australians dine out on a regular basis, with casual dining such as fast food joints and cafes remaining the most popular form of dining out. Moreover, Australians are not only asking for more ethnic cuisines on the menu; they are also on the hunt for healthier options.
Similarly, online food ordering has also more than doubled between 2017 and 2020 in Australia. Another study estimates that Australians spend almost as much on ordering food online as they do on monthly groceries. According to a World Economic Forum study, Australians spend more of their household income on food than nationals of other countries such as the US, the UK, and Canada.
Moreover, the Australian food retail industry’s annual turnover doubled from A$76 billion in 2007 to A$ 151 billion in 2020. These statistics further stress the need for food businesses to face an intensely competitive market and focus more on customer retention.
How to Ensure Your New Customers Turn to Returning Customers
So, if you’ve just received a new customer, how can you make sure that they’ll return again? In other words, how can you turn new customers into returning ones? There are several ways you achieve this, but first, it’s crucial to understand what consumers want from food businesses.
If you own a food business, it means you have dined at restaurants yourself more than once. It’s easy to understand that customers want good food and excellent service. But, what can you do to make a customer return? Let’s look at some ways of ensuring customer return and retention.
1. Maintaining Consistency
Humans are creatures of habit which means we crave consistency. If you want to turn new customers into returning ones, you want to offer them a consistent experience every time they step foot in your establishment.
Humans experience a psychological need for consistency as our brains, and cognitive tendencies crave a state of consistency. This need for consistency drives our behavior, so if we enjoy an experience, we want to live it again in the same way.
So, in the context of the foodservice industry, what this means is that your customers not only want your food to be good, they want it to be consistent as well. If they are visiting your establishment for the first time, and their experience is a good one.
They enjoy the delicious food, they are satisfied with the service they’re getting, and the ambience is to their liking. If they choose to return a second time and the food isn’t as good and consistent as it was and the service is dissatisfactory, they’ll most likely never visit again.
Achieving consistency in your offerings comes from a variety of factors, such as having trained and professional chefs. However, an often-ignored aspect is which suppliers you’re using to source your ingredients.
Many restaurants cycle through suppliers, which means the ingredients aren’t always the same. With an order management system such as OrderTron, you can consistently reorder the same ingredients from the same suppliers.
Using an order management system will ensure that your food is not only appetizing but also consistent. Achieving consistency in your food and your service is key to converting new customers into returning ones.
2. Offer Online Delivery and Takeaway Options
As indelible as your venue’s ambience is and as impressive as your customer service, it will not always be convenient for your customers to dine-in. If they are craving your food but cannot dine in for whatever reason, they’ll instead go to another establishment.
Make your products as accessible and as convenient as possible. Offering online delivery and takeaway options is a great way to get your food to your loyal customers, whenever and wherever they want it.
We’ve already touched upon the boom of online ordering in Australia, so all you have to do is partner with online ordering platforms to get your offerings out to your customers. Moreover, it’s a great way to find new customers who may prefer ordering instead of dining in.
3. Offer Incentives for Recommendations
Your loyal customers can be a great asset when it comes to promoting your establishment through word of mouth—people who regularly dine out love to recommend places they like to other people in their circles.
Offering them incentives such as free food or discount offers for recommending your restaurant to their friends or family is a great way to convert new customers into regular ones.
Even though most people look for online reviews and ratings when deciding where to eat, don’t underestimate the influence of word of mouth! Give your customers the motivation to recommend your place, and they’ll most definitely head to your restaurant with their friends for the next get-together!
4. Loyalty Programs
According to Accenture, more than 90% of businesses offer some loyalty program. Why? Quite simply, because they work! 84% of members of a loyalty program say that they have benefited from the program, whereas only 8% say that rewards aren’t necessary to them when making purchasing decisions.
The majority of the customers sign up for loyalty programs if they see some benefits such as discounts or free items upon returning to the establishment regularly. Moreover, customers spend more on businesses that they’re loyal to.
Having a loyalty program is a great way to convert new customers into returning ones as you’re offering them extra incentives.
5. Always Offer Great Customer Service
Customer service is an integral part of the foodservice industry, but you have to keep up at all times, regardless of the circumstances. Customers who are treated well are more willing to return regularly.
Offering excellent customer service is not just about sweet-talking, as the food you’re offering is also part of a memorable customer experience. You want to make sure that the customers can see and feel that your establishment is smoothly run and that they’ll get exactly what they order every single time.
6. Ask Your Suppliers To Switch to OrderTron
To ensure that your food business runs smoothly and you can convert new customers into returning ones, it’s important to streamline your operation. One way to do so is to ask your food suppliers to use an order management solution like OrderTron.
Get your supplier to start using OrderTron and you’ll see the results instantly as it’ll be easier for your supplier to manage your orders and deliver them on time.