How restaurant brands are losing their loyal customers

Over the last 7 or 8 months, I have seen four or five swanky microbreweries come up in and around J P Nagar, close to where I live. Each one outdoing the other in size, ambience, product, offering, and service.

I had the opportunity to experience all of them, starting off with this place called Brahma Brews. The evenings I was there, all of them were full. And whenever I have passed by, be it in the noon or late evening I often see a crowd waiting to get in.

On these visits, I got talking to the management at these microbreweries. Most of the customers were from J P Nagar, which was but obvious. For the residents from J P Nagar, this meant time and effort saved – of not having to navigate Bangalore’s famous traffic. Especially in the evenings and on weekends.

There were patrons who also came from other parts of Bangalore. Seeking newer experiences, no doubt, to satiate their taste buds. For the crowds, the credit also goes to their use of social media to create awareness. On my 2nd visit to Brahma Brews, a good 6 months after the first one, I found out that about 30% of the customers came back

What surprised me was there was no attempt made to collect my personal details, both the times that I visited. Either by way of a feedback or enrolment form. Now they may have collected details from others but at least I am not aware. And if they missed me they could have missed lots more.

Importantly, it took me 6 months to go back to Brahma Brews and I’m not sure when I would visit the others. Given this pattern – there could be other patrons who may display the same behaviour.

With the restaurants still new, it has the charm to pull in the crowds. But for how long? At some point, there will be a drop and this could be for many reasons: new restaurants ones opening, newer experiences needed or with one bad experience the crowds will start to drift away.

This scenario would be similar to most restaurants in Bangalore and other cities. I am sure no restaurant wants to lose its patrons, right?

And to see a familiar face is far more comforting than a new one. So the questions that arise are:

1. Are restaurants keen to retain their patrons?
2. If yes, how and why should they capture customer data?
3. How can they study consumer behaviour and develop personalized engagement campaigns?

Here, restaurants have an advantage. They can use food, drink, occasions and special offers as drivers to create opportunities for increasing cross-sell, upsell and frequency of repeats.

Now is the opportune time for these restaurants to launch their own loyalty program. Instead of riding piggyback on platforms that may not have their best interests in mind. And a loyalty program need not be about points. It can be designed as a relationship program using the customer’s social & personal and consumption information available. Thus enabling to create a very intimate connection with the patron using food and beverage as a hook.

The benefits are enormous:

1. Communicate using more personal and cost-effective mediums
2. Opportunity to know more about their customers and their behaviour
3. Build a relationship and make them feel special by recognition and gratification
4. Personalization and relevance of messages
5. Increase revenue to more number of repeats, cross-sell and up-sell

Starbucks runs one of the best loyalty programs in this space. And it is designed in a way to reward the customer if she/he spends more. It is very popular and is often used as an industry benchmark.  Just the very thought of setting up and executing a program of this sort for someone like a Bramha Brews or The Pump House is giving me the goosebumps.

Bottomline

A good loyalty program ensures and safeguards the customers’ interest and doesn’t bombard them with frequent company news or promotional messages. Customers can choose the frequency and type of messages they wish to receive, which gives them a sense of relief and security. 

Also, with technology upgrading, so are the loyalty programs. Instead of traditional mobile punch or stamp punch options, companies are enabling customers to use their phone numbers as loyalty card, so as to make the entire experience smooth, hassle-free. 

Xeno is helping a number of restaurants & cafe in running successful loyalty programs. Interested? Ask for Demo & we’ll be happy to assist you.

Are you using a loyalty program for your restaurants to build relationships with customers? If not, what’s stopping you from doing it?