What is Retention Marketing & Why Does it Matter for Your Restaurant?

February 4, 2013

Restaurant Marketing

There’s a restaurant near me that stands out because it does an incredible amount of marketing. Ads all over the place. Groupon and Living Social deals non-stop. They even run direct mail ads in a couple local circulars. Even if we assume they’ve negotiated amazing ad discounts, they’re still spending at LEAST $5-10k/month on advertising. For a typical casual sit-down restaurant, that’s a decent chunk of change.

What really surprised me, though, is that even with all that advertising, the restaurant didn’t have any plan for organized retention marketing. In other words, they spend a ton of money blasting their message to the general public, yet they spend little to nothing trying to bring back the people who actually enjoyed themselves in their restaurant. In the world of restaurant marketing, that’s a huge mistake.

It’s expensive to constantly attract new guests. You can spend thousands every month on ads designed to target a general local audience and only a small percentage are going to make it into your restaurant. Some won’t be interested in your style of food. For some, the location is inconvenient. For others, it’s the price. Some just don’t eat out much. Lots of people will see the ads over and over and you’ll never change their minds. A lot of people will never stop in simply because they already have favorite restaurants and they don’t like change. That’s especially true when someone’s dining dollars are limited. Although a lot of us DO enjoy eating at new restaurants, we tend to spend most of our disposable dining funds at our established favorites.

Why does this matter? Well, take any 100 people off the street and show them your ad. You can assume that a very small number will ultimately decide to go to your restaurant. Now, take a group of 100 of your happy previous customers. Invite them in to try a new dish or to enjoy a special promotion. Which group do you think is going to have a higher success rate? If you guessed the group of existing customers, you’re exactly right. Retention marketing experts are well aware of this.

Some people will argue that happy customers don’t need additional marketing efforts. After all, they know who you are. They know WHERE you are. They can choose to go back at any time.

The flaw with that argument, though, is that life is complicated. We get busy and we get distracted. We forget about the amazing alfredo sauce at our favorite bistro. We sit around asking each other where to eat, and as soon as the discussion comes up, 5 out of 10 of our favorite restaurants just disappear from our brains. We tend to pick the things that are easiest to remember, or the things that have been on our mind most recently. That’s what retention marketing does. It goes to your happy customers and it sticks your restaurant in their mind. Maybe it’s a special coupon. Maybe you put out a message about a new dish right before the lunch hour. Maybe you post photos of a brand new dish. All of it works to keep you in front of your customers, and it helps them to remember to come back.

Two of the most powerful forms of retention marketing right now are Facebook and email. Facebook marketing is great for restaurants because it’s free and people opt in easily by liking your page – and when they do it, their friends see them do it. Some of them may also decide to opt in at the same time. The downside to Facebook marketing, though, is that people have to remember to do it while they’re actually on Facebook. There’s also the fact that Facebook is constantly changing how they display content, and it’s not uncommon to find that many of your eager fans are missing out on your updates.

A good local email marketing program usually costs $100-200 per month per location, but it can also help you get around a lot of the problems with Facebook marketing. More people use email than Facebook, and your staff can get people signed up right there in the restaurant. Full service email marketing providers will even take the signup cards and do the data entry for you. Email also gives you a more reliable way to reach guests at specific times, since most of us check our email quite frequently (and these days, a large number of frequent restaurant visitors have email on their smartphones). This can be a great way to get people hungry for your food right around key meals.

Remember, this isn’t to say that you should never run ads or Groupon specials. Instead, we just want to remind every restaurant owner of the enormous potential for increasing business through retention marketing. The easiest sales are the ones you make to the people who already love you!

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