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Hospitality Marketing

Customer Retention Management System You Can Start Now. [Hospitality Marketing]

Are you a hospitality business owner? If you have ever wondered how to make your guests return to your restaurant, hotel or cafe, this post is for you. And no, it’s not another email list.

In the hospitality industry, the focus often lies on attracting new customers. But what if there was a more cost-effective way to boost revenue? Imagine turning your guests visiting your business for the first time into loyal customers who keep coming back. It is not a dream—it’s a strategy you can implement starting this week. By shifting your focus to customer retention, you can increase your revenue without the high costs of constantly acquiring new customers.

Let’s dive into why focusing on loyal customers can boost your revenue and how you can implement this strategy with a simple loyalty card program.

Are loyal customers better for the business than new customers?

Turning existing guests into loyal regulars costs less than acquiring new ones. Despite this, many businesses focus primarily on getting new customers through the door. Losing focus on our existing customers is a weak strategy. Loyal customers bring more value in the long run—they spend more and refer others, providing a steady revenue stream with less effort and cost to a hospo business.

Studies show that marketing to a new customer is 5x more expensive than retaining an existing one.

Moreover, according to Forbes, loyal customers are 50% more likely to try new products and spend 31% more.

How do you make your customers come back the second time?

First, I would like you to understand some critical stats. These are key to the strategy I want to share today and could help to improve your hospitality business’s marketing.

Did you know?

  • A guest visits your restaurant for the first time and has a flawless experience. The statistical likelihood of your guest returning for a second visit is about 40%.
  • They return for a second visit and have another flawless experience. The likelihood of them returning for a third visit remains around 42%.
  • After a third flawless visit, the likelihood of your guest returning for a fourth visit jumps to over 70%.

Since we are unaware of which customers visit our business for the first time, these statistics highlight the importance of consistently providing outstanding service. A good guest experience can increase their chances of becoming regulars​​​. And the primary goal of that is to grow our establishment’s loyal customer base.

Imagine the following marketing strategy

Put yourself into the shoes of a guest.

Imagine you are walking into a restaurant for dinner. They offer you flawless service, and you are having a great time. At the end of your meal, they give you a small but tempting present—a business card-sized invitation to return for a free meal of their in-house special next time. You feel valued and appreciated, and you also find the offer tempting.

The next time you visit, you enjoy another great meal, and redeem your free in-house special. Your experience is again fantastic, and they give you a new card. They invite you to try one of their amazing desserts for free on your next visit.

By your third visit, you will be enjoying the complimentary dessert. At the end of your evening, they hand you another card, this time for a free main course on your fourth visit. Of course, you will take up the offer! It is very tempting, and you will return the fourth time.

By now, you feel a solid connection to this restaurant. You are emotionally attached. You have a new go-to spot for future dining.

The restaurant’s marketing campaign strategy has succeeded. You have become their loyal customers.

However…

The loyalty card system won’t work alone.

The key to ensuring your guests return to your hospo business lies in providing an outstanding guest experience.

Create your loyalty card system

To the hospo business owner: This is what you need to do.

Since you know your business best, you have to do the planning. Come up with three tempting, almost irresistible offers that entice your guests to return. Here’s a suggested sequence as an example:

  1. First-time visit: offer a complimentary bottle of wine with a purchased two-course meal (either starter + main or main + dessert) per person on the next visit.
  2. Second-time visit: offer a free dessert with a purchased main course per person on the next visit.
  3. Third-time visit: offer a free main course with a purchased starter or dessert per person on the next visit.

If you follow these steps, your guests will return for the fourth time, too. By that time, statistically, you will have a new loyal customer.

Step-by-step implementation of the loyalty card system

Here are the steps to implement this program at your restaurant, hotel, or café:

  1. Get the ideas: Brainstorm and decide on the offers you want to provide (as per above).
  2. Write the ideas down: Clearly outline the program and the sequence of offers.
  3. Design the cards: Create attractive and clear card designs.
  4. Write the memo: Create a clear and concise memo explaining the program to your team.
  5. Introduce it to your team: Explain the program and its benefits to your staff.
  6. Gather ideas: Collect feedback from your team to refine the program.
  7. Iterate before printing: Make necessary changes based on feedback.
  8. Get the cards printed: Finalise and print the updated cards.
  9. Alter menus and drink lists: Make any changes required to menus and drink lists to reflect the program.
  10. Implement: Launch the program and monitor its effectiveness.

A bonus tip!
How about finishing off the sequence with a creative idea? With a final card. What if we asked for a Google Review based on their experience?

We are sure they have returned four times because they enjoyed what your hospitality establishment offered. Why not strengthen your restaurant's marketing with a guest review?

Conclusion

Avoid discounts; instead, give something for free. Free items feel like a gift and build goodwill without cheapening your brand. In addition to that, your guests will not have the expectations of you providing products/services with a discount.

Avoid giving discounts! A gift is a one-off occasion; discounts are not!

By implementing a loyalty card program like this, combined with outstanding guest experiences, you can create a steady flow of returning customers who feel valued and appreciated, increasing your revenue and ensuring long-term business success.

Do you have questions? Let me know! I also can help you design these cards.


Follow this blog as I share hands-on marketing tips with readers that I find helpful.

Thank you for reading my post.

I am Shopi.
I provide no B.S. marketing & design for Hospitality Businesses.