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It’s surprising how many business owners in the hospitality industry underestimate the power of customer retention, considering how vital they are to success. While striving for growth, they forget about the gold mine of customer loyalty. They do not understand that it’s about more than simply maintaining current profits. Retaining returning customers is one of the most vital aspects in ensuring the future sustainability and growth of a company.
Before I get into practical customer retention strategies, let’s start with attitude: realize that you are not serving or selling to “customers,” but to “guests.” This is the term it’s best to use when you think about them, talk about them, and discuss with them. This is not just feel-good marketing gibberish; there is a fundamental difference between these two people. A customer purchases my product or service as a purely transactional activity that may or will not be recurring. A guest is someone to whom I open my home and treat him like family; it’s a relationship I’m working on and I hope it will proceed.
Ignore guests or treat them badly and everyone will know what a bad experience that they had. This could be even more damaging if you run a franchise, as is the case with Ford’s Garage Restaurants, where a bad experience at one location can tarnish the status of the entire franchise. Consistency is key in franchising, and ensuring a consistent guest experience across locations is of the utmost importance. Individual locations may reflect their markets’ unique preferences in menus and other features, but the one thing that must be repeated in all places is exceptional customer support. Every guest around the world desires to feel that they have been well taken care of, even if the company made a mistake (which was corrected, after all).
Disappointed guests not only stay away from your business; they may keep others away, a problem that is growing exponentially with the popularity of online reviews. Therefore, it is undeniably higher for profits to cultivate loyalty. Harvard Business Review reports that attracting latest guests is 5-25 times more expensive than retaining existing ones, and increasing retention rates by just 5% can increase profits by an astonishing 25-95%.
Recovering a lost guest is not inconceivable, but in the face of such adversity it requires a proactive and sincere approach. It starts with understanding why the customer left in the first place, addressing any issues or concerns that they had, and demonstrating measurable improvements. (*3*) offers or incentives may help reignite interest.
With all this in mind, why not put your energy into retaining the guests you already have?
The critical risk area for guest loss varies by industry and individual guest experience, but three predominant touchpoints offer opportunities to strengthen loyalty. Just remember that they may scare guests away if not done appropriately.
1. Before your visit: Make social connections and make a name for yourself.
Increase your presence (in the neighborhood and in the minds of guests) by co-sponsoring events with local businesses, celebrating community events, and partnering with schools and youth groups. For example, the favorite guest of the Ford garage are our Burgers of Fame, who names burgers after beloved local celebrities. Connecting with the community not only increases brand visibility, but also builds trust and loyalty, increasing guest retention.
2. During the visit: Make guests feel welcome and appreciated.
Greet them warmly, get to know returning guests and their preferences, and provide quick service to everyone. Creating a friendly and personalized experience can make a lasting impression on guests, strengthening loyalty and repeat business. Treat them like your mom, dad, brother or sister.
3. After and between visits: Invite them back with meaningful contact.
Maintain the relationship after the guest leaves. Ask for feedback with surveys (not too detailed), send a thanks note or gift for a significant purchase, and make it price joining loyalty programs with special offers of real value. Showing appreciation and actively in search of feedback shows guests that their satisfaction matters, reinforcing a sense of loyalty and goodwill.
Always provide exceptional service
If a company could only do one thing to keep guests coming back, it should prioritize consistently excellent customer support and maintaining product quality. Never reduce costs with anything they touch and see; above all, don’t skimp on anything that affects the quality of the product. Each interaction with a guest is an opportunity to strengthen the relationship and strengthen his loyalty to the brand.
While price, product quality and convenience undoubtedly influence customer decisions, customer support often emerges as a pillar of customer retention. Good service can mitigate the effects of deficiencies in other areas, but poor service could be a serious blow even if other areas are satisfactory. Guests are willing to pay a premium for exceptional hospitality, and this is often a differentiator between competing businesses.
Companies that prioritize guest satisfaction and loyalty are higher prepared to resist competitive pressures, achieve sustainable growth, and thrive in the long run. It’s not only about keeping guests pleased; it’s about building lasting relationships that drive mutual value and success. Give your guests a implausible experience with a high-quality product and entertainment element – that’s what I call it “entertainment” in the restaurant industry – and you will win.