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How to Ensure Your Hospitality Business Has a Loyal Customer Base

November 13, 2018 By George Urdea 8 Comments

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Do you understand the importance of cultivating a loyal customer base?

How to Ensure Your Hospitality Business Has a Loyal Customer Base

Whether you’re a one-man-band café owner or run a global giant, retaining existing customers is much more desirable for your business than having to create new ones.

In fact, it costs five times as much to gain a new customer as it does to retain an existing one. Here’s why: in an already saturated consumer market, customers are understandably spoiled for options.

They’ll need a lot more convincing to decide on a business that they don’t recognise as their destination of choice.

Major Advantages to Having a Loyal Customer Base

Customers who have already bought from your business require less marketing and sales spin because they’ve already enjoyed their experience with you. Trusting you and your brand will make them far more likely to want to return, rather than try somewhere new.

But even though returning customers cost you less than new ones, you still need to work at ensuring they come back time and time again. Here are some tried-and-tested ways of creating a loyal customer base.

Reward Loyalty from Repeat Customers

Loyal customers are the lifeblood of any successful business. Without them, your business will have to rely solely on new ones—which, as we know, costs a lot more money and takes a lot more effort.

In other words, loyal customers are key to ensuring your business thrives. Not only are they more likely to spend more money than new customers are but they also act as ambassadors for your business.

They do so by spreading the word and recommending your establishment to friends. So how do you ensure that your customers are loyal to your brand?

Appreciate Your Customers

The best way to achieve customer loyalty is to give your clients a solid reason to come back. This reason needs to be more than just the basics of good food and drinks. You need to make your customers feel appreciated.

Appreciating your customers doesn’t have to be overly complex. Doing so can be as a simple as offering them a free coffee or slice of cake. Some of the biggest names in hospitality do exactly that.

For example, in 2016 sandwich chain Pret a Manger gave away 1.7 million free coffees to customers who they thought were in need of cheering up. This clever marketing tactic caused customers to associate being happy with the Pret brand, making them come back again and again.

Don’t worry—you won’t need to hand out millions of free coffees to reap the rewards of a well-placed freebie.

Hand out as many as you feel is reasonable in proportion to the size of your business. If you only initially gain one or two repeat customers, they will still prove to be a worthy investment.

Give Customers Incentive to Return

A second way to grow customer loyalty is to give patrons an incentive to come back. A customer loyalty scheme is a perfect way to provide this incentive. For example, a simple stamp card that gives people a free coffee after they purchase a certain number will suffice.

Although this is a cheap and easy system to implement, it does have its downsides. It can be difficult to know how many loyalty cards you have given out, which makes monitoring their effectiveness slightly trickier.

Luckily, we’re in 2018 where there’s a technological solution for everything. Simply forget paper cards and move your loyalty program to an app!

Doing so will allow you to easily track the number of people who are using your reward program. You’ll also be able to learn the exact amount of revenue you’re gaining from your program.

Keep in Touch with Repeat Customers

Keeping in touch with repeat customers might be slightly more time-consuming than implementing a loyalty scheme. But doing so has the potential to really boost your number of returning customers.

A study found that customers who are highly engaged with a brand are 90% more likely to buy from that brand more frequently. They’re also 60% more likely to spend more than customers who are not as engaged.

Simply put, if customers regularly hear from your brand, they’ll choose you over the competition every time.

Talk to People Face to Face

There are plenty of ways to create customer goodwill and improve your brand. The easiest method is to spend time talking to your customers.

Talking to your customers turns the mundane process of buying a coffee into an experience. A study by the Harvard Business Review found that businesses that offered stellar customer experiences raked in 2.4 times more revenue per customer than those that offered so-so service. It’s safe to say that customers respond to good customer service and human interaction.

Talk to People on Social Media and Through Email

These conversations do not have to end once your clients go out the door. Another great aspect of the digital world we now live in is social media.

Creating a Twitter, Facebook and Instagram page for your café will give customers the opportunity to engage with your business on their own time. They can learn about you in a way that might not be possible in a short chat over the register.

Twitter is great for impromptu conversations with customers. Instagram is great for bringing your coffee shop’s brand to life and giving your fans insights into your vision for your business.

Email marketing, if you do it correctly, is another good way to encourage customers to come back. If you have poor email marketing, you’re not likely to see any return on your investment. There’s a chance you’ll actively drive existing customers away.

If you’re clever, however, about your strategy and create something that people on your mailing list actively look forward to, you’ll be right on the money. In fact, marketing specialists at WebpageFX report that every $1 spent on email marketing generates $44 in return.

Getting started on your first campaign isn’t difficult either. Simply sign up with an email service and begin collecting your mailing list.

Something to remember when carrying out your social media and email campaigns is that bombarding your customers with social media posts and emails can be counterproductive.

Simply post once a week, and you will avoid the risk of exasperating your customers and driving away the very people you’re hoping to court.

Working on getting those customers back through your door can be hard, but if you’re smart about it, you will definitely see a return on your investment.

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George Urdea

Co-Founder at Nobly POS
George Urdea is one of Nobly POS‘s co-founders. He’s completed a Masters in Management and Organisational Analytics and has helped build digital teams and products for companies such as BSkyB and McKinsey & Company. It was at the latter where he met his fellow Nobly co-founders, and the rest is history – they’ve been providing EPOS systems for coffee shops, delis, restaurants, and bars for five years.
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  • How to Ensure Your Hospitality Business Has a Loyal Customer Base - November 13, 2018
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Filed Under: Small Business Advice Tagged With: customer care, customer relationship management, customer retention, customer service

Comments

  1. Radhika Jain says

    December 1, 2018 at 3:03 am

    For the people who want to know how strong their Loyal Customer Base is and for the people who want to build a Good Customer Relationship this post is perfect for them Because it contains so many important points for growing.
    Thanks for sharing this Amazing post.
    Radhika Jain would love you to read ..5 Hair Care Habits You Need To Practice This 2018My Profile

    Reply
  2. William Wolford says

    November 23, 2018 at 7:08 pm

    Great insight on receiving feedback and giving your customer a great experience.

    Keep up the awesome content.

    Reply
  3. Rahul Dotre says

    November 20, 2018 at 6:10 am

    Hi

    Working in a client servicing especially in a hospitality is a tough job. Sometimes I get totally blank “How to handle customers for their full satisfaction”.

    After reading your article I will surely follow-up with your pieces of advice to make them happy.

    Thanks and Keep posting

    Reply
  4. Shaheen says

    November 16, 2018 at 3:49 pm

    Thanks for sharing such useful information. All the points you mentioned in the above post are very important. Existence clients are asset for any organisation that is most important thing to promote brand and corporate identity.

    Reply
  5. Pratik Patel says

    November 14, 2018 at 5:33 am

    Hey George Urdea,

    Great Post… And receiving a Feedback is also important for the business.

    Thanks & Keep posting….

    Reply
  6. Ryan K Biddulph says

    November 13, 2018 at 8:03 pm

    Appreciating current customers is the easiest way to keep ’em and to get new customers George. Excellent advice here.

    Reply
    • Gail Gardner says

      November 14, 2018 at 6:07 pm

      Hi Ryan,

      I don’t recall the study, but the #1 reason customers bought somewhere else is because they didn’t think the business they were currently using cared about them. It is essential to let customers know they’re appreciated if you hope to have repeat business.
      Gail Gardner would love you to read ..How to Use Content Marketing to Promote Your Online CourseMy Profile

      Reply
      • Ryan K Biddulph says

        November 16, 2018 at 7:38 am

        Gail this is so true. I see this again and again with blogging; bloggers cannot be bothered with customers. Weird to me. I bond with these folks like crazy.

        Reply

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