Technology

3 ways to retain, acquire customers

Provided

August 14, 2020 by Matt Drewes — Owner, DRMS Marketing

Restaurants across the country are bracing for a second wave of state-mandated closures as coronavirus cases surge again. Still recovering from the first wave of closures, many will struggle financially in the face of another shutdown. Early estimates from June reported that roughly 15 % of restaurants across the nation could shutter permanently due to COVID-19.

Times are challenging for the industry, but for the many locations persisting, there is also opportunity to regain share. As restaurant spend continues on an unpredictable but, overall, upward trend amid increasing consumer confidence, operators can get ahead of their competitors by adopting a strong approach to keeping and acquiring customers during the pandemic and beyond.

Turning lemons into lemonade

Based on Cardlytics' view into one in two U.S. card swipes (and $3 trillion in annual spend), our data shows that as some states began to pause or reverse reopening plans, full-service restaurant spend saw higher year-over-year (YOY) losses. The week of June 25, dine-in spend was down -36.9 % YOY, compared to -31.8 % YOY the week prior. Still, just the week before (June 11), spend was down -38.8 %, demonstrating the unpredictability of consumer behavior amid restaurant openings and closings. While overall restaurant spend is recovering from the worst lows it experienced during the pandemic, marketers need to invest in bringing in new customers and double down on customer loyalty.

New customers are driving sales

As the pandemic forces people to change their habits, customers are experimenting more with new restaurant options, especially ones that are convenience-driven and meet the unique needs of today. New customers are driving sales across all categories of restaurant and namely, 50 % of total chain sales. If restaurants want to keep these customers coming back, they must connect with the customer immediately to reinforce what was hopefully a positive dining experience. Using technology from mobile and online touchpoints to quickly connect with them offers the opportunity to invite them back before they move on to their next dining "experiment."

But keep your loyal customers

While new customers might be driving sales, now is also the time to pay extra attention to your frequent or loyal diners. Our native ad platform, which is built in banks digital channels, found that returning, high-frequency customers accounted for about 30 to 50% of all sales, highlighting the importance of maintaining close contact with this group.

Different diners, same strategy

Whether you're driving new diners or retaining your loyal population, the good news is that the strategy is largely the same.

1. Remind them why they love you

Customers, both new and old, should be reminded of your differentiators. Is it your amazing Tuesday specials? Your signature pasta dish? Did they visit you on a special occasion? Sometimes, simply reminding diners about what sets your restaurant apart from others can bring them back for their next experience.

2. Technology = convenience

If you haven't invested in your technology, now is the time. Whether people are dining in, getting takeout or ordering delivery, a seamless experience for diners across all channels is the expectation. With full-service dining trending downward YOY and no real certainty around when we will return to pre-COVID restrictions, having a solid omnichannel experience, driven by technology, is how restaurants will persist past these uncertain times.

3. Show the savings

Cost savings is always a driver for diners, but these days, it is especially critical. A recent survey found that 88% of Americans were feeling financial stress caused by COVID-19 which, while troubling, gives brands the opportunity to help. Showing customers that you're providing a cost-efficient experience while giving them additional savings will help drive sales. For example, 64% of customers were more likely to use a brand when provided the opportunity to save. As an added bonus, giving customers additional savings shows that your brand cares about what is important to customers, thus building loyalty in the long run.

While there is no doubt restaurants are facing unprecedented challenges, what will drive future success is clear. Restaurants need to focus on attracting new customers and retaining loyal customers by providing a differentiated experience, convenience via technology, and cost savings in order to sustain during COVID-19 and beyond. And with customers' preferences and needs at the center of the industry, they'll be met with happy diners who'll continue coming back for years to come.