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Restaurant Loyalty is Dying and What to Do About It

Exit Sign When I first started off this marketing business with my business partner, I was focused on working with restaurants. Since then the company has expanded with working with tech startups, mining companies and with food and hospitality. But what has become an alarming trend among restaurants in Vancouver is the number of closures of restaurants in this city, increasing your restaurant’s profits andcreating customer loyalty are more important than ever.

Dale Mackay is a celebrity chef, and the winner of Top Chef Canada. He opened two restaurants, both of them, sadly didn’t survive. It’s not only just those restaurants, it’s the fact that even chain restaurants like Moxie’s are having trouble succeeding. There are a few issues that are related to why I believe restaurants in Vancouver, and most likely every where else is having a tough time keeping afloat.

Restaurant Loyalty Mistake: Aiming Too Much at Gen Y

Restaurants hoping to build loyalty by aiming exclusively to Gen Y’s and trying to get them to come back again and again to the restaurant hoping to get them to be a life time customers is a big mistake. Marketing to millenials is a tricky business. With discovery tools such as Yelp, Urbanspoon and Open Table, young adults are no longer interested in eating at the same establishments.

When I was growing up, my parents and I would go out and eat at the same Chinese restaurant almost every other week. It was one of the better Chinese restaurants in the 70’s and 80’s. We went their as a family until they closed in the 90’s due to retirement.

This was because competition was low for Chinese food at the time, and the customer service was excellent. They truly treated us like a family, and always complimented on how good looking my older brother was.

But today’s youth aren’t loyal to a restaurant, they want go to where it’s trendy and what’s hot in the moment. They go to where all their friends go for that particular moment and then they’ll move on to the next restaurant that opens up that has the next best cuisine.

Because young men and women love novelty they don’t want to experience the same food, they want to take their money and make the most of it.

Younger generations don’t want to want to feel shunned by friends, and so they try to keep up with the foodie talks by going to those places so that they ensure they have a place in the foodie hierarchy.

The harsh truth is that if you’re using old school methods to keep the young people in, it’s not going to be very successful. All you have to do is look at how Facebook is slowly being abandoned by teens, to realize that younger generations skip and hop like hop scotch.

Restaurant Loyalty Mistake: Forgetting Baby Boomers

Baby Boomers are working beyond the traditional 65 years old, and accumulating more wealth, and are considered the largest demographic with money to spend. I find that baby boomers are starting to lose loyalty to restaurants as well, but many restaurants that have catered to an older generation and baby boomers with sophistication have, in my opinion, survived much longer.

Baby boomers have more money to spend, and have a stronger understanding of wine and alcohol and are willing to spend more during special occasions. One of my favourite restaurants that I enjoy in Vancouver is Kits Daily, an upscale and professional restaurant that has done extremely well at attracting both baby boomers and generation X and Y’s.

I truly believe that the intent of the restaurant was to provide the greatest, freshest quality of food on a daily basis. But never at the expense of making food cheap. I think this attracts a certain type of clientele, not too mention that the menu changes on a daily basis.

What Can You Do to Create Loyalty?

1) Create Loyalty Cards

Hotels (even 5 stars) and large retail markets have used loyalty points and cards for a long time, and have been very successful at it. Starbucks has even offered different levels of loyalty rewards to ensure that customers feel special. When a customer attends your restaurant, casually ask if they would like to receive a loyalty card to collect points.

Your restaurant may not be able to have the same sophistication that these large chains have, there’s still no excuse not to have one. One of my favourite sushi joints, Sushi Zero One has a loyalty card, and the place can only seat about 13 people.

2) Change Up Your Menu with Specialties

If you’re not able to attract the baby boomer crowd, but want to increase loyalty among younger people or to create a great word of mouth referral, make sure that your menu has changes from time to time. I’m not just talking about seasonal changes, I’m talking about weekly specials that can be tested and promoted.

I would also strongly suggest that you post your seasonal changes on your website and on your Pinterest boards.

I worked with one restaurant where loyal customers wanted to come in, but they always asked if there was anything new on the menu. They had tried the old stuff, but were getting sick and tired of eating the same menu items six months later. They were craving for something different.

By creating something different, it keeps people on their toes. Even in the world of advertising, we try not to use the same print advertisements because people tend to go, “Oh that’s been done.”

3) Treat Your Customers Equally

While baby boomers are the ones that are spending more money, and they are most likely to come back, don’t forget to treat all your customers equally. It’s a very hard balance int he world of restaurant marketing. The reason is because baby boomers are the ones that will spend, but it’s the younger people who are going to be the one telling people about your restaurant on social media faster than most people.

Young people are the ones most likely to introduce new customers into your restaurant, while baby boomers will too, they won’t be able to do it at the speed that Gen Y’s do.

But this also means taking your customer feedback seriously, and responding to their Yelp Reviews, or reviews on Trip Advisor. Respond to both good and bad comments, and just taking that extra interest will show that you’re quite serious.

Great customer service to all is vital, and if you’re finding your staff isn’t motivated in delivering the best, consider using gamification in your restaurant. This is how I increased sales at a cafe I managed a few years back.

What are you thoughts, do you feel that restaurant loyalty is dying and competition is too fierce? And what do you believe the solutions are.

Photo courtesy of Oliver Biederbeck.

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Vincent Ng is the founder of MCNG Marketing, and the author of Pinterest to Profits with Pintalysis and the host of the Pinterest podcast, Pictures to Profits. You can grab your free e-book on How to Search Optimize Your Pins for Pinterest and Search Engines."