The restaurant industry has a high failure rate because of its competitiveness and difficulty retaining customers.
The restaurant industry has a high failure rate because it is insanely competitive and difficult to retain customers. According to a report on recent industry data, about 59 percent of all businesses fail in the first three years.
Restaurateurs must build strong relationships with their customers if they hope to thrive. It’s becoming progressively more difficult to build customer loyalty. Here are some of the challenges that restaurants face.
Negative online reviews
Online review sites like Yelp and Google Places are a double edge sword for restaurant owners. Positive reviews can bring in a lot of business. Unfortunately, negative reviews can cripple your restaurant. The reviews can influence your customers' experiences differently, which can hurt your reputation and relationship with them.
You can't always stop customers from leaving bad reviews, even if they aren't deserved. However, you can minimize the likelihood of receiving bad reviews, which will improve your relationship with your customers.
Need for Instant Gratification
We have become a society that demands instant gratification. Customers are much less patient than they used to be, so restaurants need to offer a timely service to retain customer loyalty.
In the 1960s, most people have their favorite diner that they would visit several times a week. People have much more diverse preferences these days.
The hospitality industry has become much more competitive in recent years. Many people have multiple restaurants that they enjoy visiting. Restaurant staff members need to be encouraged to work harder to stand out from competitors.
Build great customer relationships
Success in the restaurant industry hinges on building excellent relationships with your customers. These relationships aren't built by accident. You need to actively nurture them.
Follow these tips to earn customer respect and loyalty.
Make social media a two-way dialogue
Most restaurants are using social media. Unfortunately, most of them don’t use it very well.
The biggest mistake restaurants make with social media marketing is treating it as an advertising platform. They fill their follower’s feeds with posts that boast about how wonderful their restaurant they are, at the same time they never respond to customers that reply to their posts.
This approach is almost guaranteed to fail. Social media should be a two-way dialogue. Always reply to customers within 24 hours. Make sure your replies are grateful and respectful.
Integrate data management
All marketing begins and ends with data. Restaurants have plenty of data about their customers, but can’t always use it effectively.
Most restaurants use different tracking systems to monitor customer behavior. This can create complications for managers without the right technical knowledge.
The study reported the reason most restaurants fall short of leveraging their customer information is that they have multiple systems for each type of dataset, and none of these systems talk to each other. For example, according to the report, if a restaurant uses OpenTable for its reservations, but it uses Aloha for its POS, and then it has a separate website that monitors its reward information. The key is linking the information together.
According to a recent study from BDO, 93 percent of retail and restaurant chief marketing officers had trouble integrating their data systems. Two out of five of them found it to be very challenging. Restaurants that take the time to integrate these systems will have much better data on customer engagement.
Provide timely service
Providing timely service is probably the most important part of running a successful restaurant. There is new technology on the market that allows you to deliver better service.
You can use WiTop, it is a paging system that allows restaurants to cut their customer waiting time significantly. Over 20,000 restaurants around the world use Witop to improve the customer experience. It can also be easily integrated with a POS or alarm system.
Actively engage with customers
Social media can be a great way to bond with your customers. However, too many restaurants use it as a crutch. Setting up a Facebook or Foursquare page doesn't nullify the importance of personal relationships.
You need to be personable with your customers if you hope to earn their loyalty. The best relationships are built with personal, friendly conversations. Get to know the people visiting your business regularly on a personal level.
If you're unsure of how to approach them, talk about their day, ask them about an upcoming wedding they may have and let them vent about career problems. This is one of the reasons it's so important to have your restaurant properly staffed.
Make it easy for customers to express opinions
Customers often fail to express their concerns with restaurants. It can generally be attributed to shyness or afraid of confrontation.
To rectify this, make it easy for customers to share their thoughts. Two ways to make this easy on them is allowing them to anonymously share their experiences through your website or by providing an anonymous suggestion box in your restaurant.
Assure your customers that you take their concerns seriously and address them in a timely manner.
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