Japanese restaurant owners reveal how they retain customers
Much of a food business' revenue comes not from new customers, but from people who keep coming back. Assuring customer satisfaction is hence equally, if not more, important than creating awareness of your F&B joint. So how do you make sure that your have a healthy, growing number of returning customers?
The likelihood of a return visit
Most Japanese restaurant owners' estimate that for first-time customers at their outlets, the likelihood of them coming back to the restaurant a second time is about 40% (i.e. out of 100 customers, about 40 return).
For customers that have been there 2-3 times before, the return rate rises to about 80%; and those who have been to the restaurant 4 times or more have a 90% retention rate. They feel that this is the industry standard in general.
The F&B operators interviewed are not far off the mark. Based on the chart above, the average rate of new customers revisiting an outlet is 38%. If examined based on type of food business, bars have the highest return rate at 41% of new customers, whereas cafes have the lowest at 36%.
The most popular way among F&B owners to increase the chances of new customers coming back to their restaurant is to chat with the customers. Most of the time, this means making simple small talk like asking "Do you live nearby?", or taking the opportunity when they are settling the bill to ask "How was your meal today?" or "Was the food to your liking?"
Japan has a nationwide award for F&B service and last year's champion restaurant server employs the same method of chatting with customers to build rapport with them so they return. He begins chatting with the customers when he was taking their orders. If they are responsive and friendly, he makes it a point to mention something along the lines of, "Other than what you ordered today, we also have some specialties that are not commonly found at other restaurants. Maybe next time you visit you can try them." Every interaction with the customer is a chance for service staff to create an impression.
How to ensure new customers have the right impression
Some restaurants recommend that after greeting customers when they first come in, the server can ask if they know how to place their orders (if ordering is very straightforward you can ask if they know about the set meal or promotion), or if they would like them to introduce the items on the menu.
This way, you will be able to gauge if the customer is new to the restaurant or has already been there before.
If they are new, staff can take special care to check on them more often, ensure their water glass or tea is filled, add soup or vegetables for them, and so on. Exceptional service will definitely make their experience more pleasant and improve the chances of them returning.
When asked what they felt was the most effective way to get more repeat customers, most restaurant owners chose talking to the guests.
For example, at one restaurant, it is customary for the chef to take a few seconds off from cooking to enter the dining area and personally say hello to the guests at every table. Very few restaurants practice this, so his simple "hello" – no more than a few seconds! – quickly and easily creates the impression in customers' minds that this restaurant is special. It also creates a sense of familiarity and closes up the distance between the customer and the restaurant.
Another way to get customers thinking about returning to your restaurant is to tell them a bit about the place while chatting with them and recommending dishes that are particularly good or special. If done right, the customers will want to come back just to try the other dishes.
When the waiter is clearing the plates or presenting the bill, they can also make small talk with the customers and ask how their meal was and if they are satisfied. It seems like the best way to get customers to remember your restaurant is personal interaction and making the effort to show a little care.
Do discounts work?
We've discussed why how F&B owners attract customers to return to their outlets and which are the most effective methods – how about the reasons why customers revisit a particular F&B outlet?
According to a study by Sapporo Beer, customers decide whether or not to return to a restaurant based on value for money (73.8%), taste (67.5%), and ambience (53.0%). In contrast, having a discount voucher/ perks is only 29.3%.
A lot of restaurants owner think that with discounts, they would be able to attract customers and have them keep returning, but that's not necessarily the case.
In order for the discounts and loyalty points to be attractive, the customers must first like the restaurant. This might sound like no-brainer, but it gets overlooked sometimes. Don't forget when brainstorming for ways to improve your customer retention rate, that value for money and taste are the most important!
Cheryl Tay is the editor and marketer at iCHEF Singapore. She also manages iCHEF Club, a growing community of F&B owners in Singapore – organising events, an online newsletter and the F&B Entrepreneur Bootcamp, the only regular workshop on opening a new restaurant in the country. In her spare time, she attempts to read every book that’s ever won a literary prize and watches cat videos. Like any proper Singaporean, her love for food runs deep – especially spicy food. Chili is life. Write here...