Industry Info

Customers. What would you do without customers? Customers keep the lights on, the paychecks coming, and the bills paid. Customers are ultimately why you do business. You work diligently to get new customers coming through the door. 

You spend money on the location and signage, you stay connected on social media, and you are always making sure they love your food. But what are you doing to keep coming back for more? 

Did you know acquiring a new customer can cost five times more than retaining an existing customer. Plus, one study reports that 20 percent of a business’ existing customers can generate as much as 80 percent of its profits.

What is Customer Loyalty?

“Customer loyalty is a customer’s willingness to buy from or work with a brand again and again, and it’s the result of a positive customer experience, customer satisfaction, and the value of the products or services the customer gets from the transaction.” (Hubspot)

How Do You Keep Customers Loyal?

Apart from great food and great service, what can be done to keep those existing customers spending money at your restaurant? 

A loyalty rewards program is probably the most common sense answer. A recent article in Forbes had this to say about the benefit of loyalty programs:

“Loyalty programs are proven to increase customer lifetime value by up to 30% or more by increasing visit frequency, increasing spend per visit, and winning back lost customers.” 

What Are the Benefits of a Customer Loyalty Program?

Here just a few of the reasons to implement a Loyalty Program:

1. Increases ticket size and order volume
2. Helps Build Your Brand
3. Keep Marketing Cost Down
4. Improves the Customer Experience
5. Provides Valuable Data

Are you taking advantage of customer loyalty programs? Did you know you could have a customer loyalty program built right into your branded mobile app with Forefront? 

The impact of delivery-only virtual kitchens

It’s not quite fall, and the Halloween decorations have already hit the shelves at Target. Come October 31st, there will be ghouls and goblins going door to door looking to get their candy fix. I’m always a little worried that I don’t have enough candy, but there is an easy solution, right? I just buy extra of my favorite candy and if I don’t give it all away to trick-or-treaters I get the benefit of indulging from time to time. 

As we prepare for princesses, firemen, witches, and cowboys, traditional restaurants are facing a different kind of scary, hungry creature; “Ghost Kitchens.” Restaurants are already wrestling with how to make a profit with razor-thin margins and how to keep customers coming through the doors. Now they must contend with a new “ghostly” trend that I’m not sure they are prepared to handle.

What is a Ghost Kitchen?

A ghost kitchen, also known as a virtual kitchen or delivery-only restaurant, is a foodservice establishment that offers take-out only. These are mainly being used by third-party delivery services to bypass delivery from traditional restaurants and increase their own profits. Ghost Kitchens don’t have a storefront for customers to dine in or pick up their own orders.

Who is behind these Ghost Kitchens?

Although there are others, the most notable players in the virtual kitchen game are delivery services like Grubhub, Uber Eats, and Deliveroo. These companies use the valuable data they have collected while delivering for traditional restaurants to determine the kind of kitchens they want to mimic. Retail giant Amazon recently invested in Deliveroo. Renowned VC Michael Moritz of Sequoia Capital wrote an article int the Financial Times entitled “The cloud kitchen brews a storm for local restaurants.” In the article he warns that Amazon’s recent investment in the company “might just foreshadow the day when the company, once just known as the world’s largest bookseller, also becomes the world’s largest restaurant company.” This isn’t great news for restaurant owners, he adds, writing, “For now the investment looks like a simple endorsement of Deliveroo. But proprietors of small, independent restaurants should tighten their apron strings. Amazon is now one step away from becoming a multi-brand restaurant company — and that could mean doomsday for many dining haunts.”

How are ghost kitchens impacting traditional restaurants?

Perhaps for some there may be benefits, but it looks like these delivery-only options are putting the hurt on traditional restaurants. In the recent New York Times article “Rise of The Virtual Restaurant” you can read about Paul Geffner, who has run Escape From New York Pizza, a small restaurant chain in the Bay Area, for three decades. “Two of his five pizzerias, which together had generated annual profits of $50,000 to $100,000, lost as much as $40,000 a year and In May, he closed two of the Bay Area chain’s locations. Later that month, one was replaced with a kitchen that mostly does delivery.”

These virtual kitchens “may also undermine the connection between diner and chef. ‘A chef can occasionally walk out of the dining room and observe a diner enjoying his or her food,’ said Shawn Quaid, a chef who oversaw a ghost kitchen in Chicago. Delivery-only facilities ‘take away the emotional connection and the creative redemption.’”

What can traditional restaurants do to compete?

Build your brand: Emphasize what makes your restaurant unique.Take advantage of social media and make sure your marketing highlights your name and logo. 

Know your audience: Who are your regular customers? What do they value? Customer data should form the bedrock of your marketing strategy, allowing you to personalize outreach and develop a loyal customer base.

Encourage customer loyalty: Loyalty programs serve two functions: to incentivize new clients to stick around after purchasing your food, and to ensure that existing loyal diners still feel as if they are valued by your company.

Take control of your marketing: You can’t rely on third party delivery apps to do the marketing for you. Guess what? They don’t have your best interest at heart. They would happily direct your potential customers to your competition if they already have a driver in the area. Only you truly care about you. 

You don’t go into the restaurant business if you are easily frightened. But no matter how tough you are, you can’t ignore the creeping-crawling reach of third party delivery apps into the restaurant industry; especially their ghostly, dark kitchens. 

So who you gonna call? Ghostbusters…….Probably not. But you can call Forefront. We’d be happy to tell you about how having your own branded mobile app can help you survive and thrive. 

Responding to a generation that doesn’t have time and loves technology.

If you did not know already, Millennials have overtaken the Baby Boomers as the largest living generation. These 18-25 year olds are making waves in almost every industry. 

They may be young, but Millennials have major buying power. Millennials average yearly expenditures total around $47,112. Together, Millennials spend $600 billion in the United States each year. The Millennial population is projected to spend $1.4 trillion shopping each year by 2020.

Where are Millennials spending all this money? Well…More than any other generation Millennials prefer experiences over things, and the good news for the restaurant industry is that eating out is one of those experiences they love. 

Despite working fewer hours Millennials spend less time on food prep. They eat at restaurants 30 percent more than other consumers. More than half (54 percent) eat at restaurant at least three times week and spend 14 percent more than other diners when they do. 

What about online and mobile purchases? Millennials spend more time on apps and the internet than they do watching television and make 54 percent of all purchases online. 

During a UPS study of Millennial shopping habits, only 11 percent of Millennials reported they will make their next purchase in a physical retail store. A whopping 79 percent of Millennials have ordered take-out via website or app. That is 29 percent more than the older US adult population.

If you can win these experience-seeking big-spenders, you can have a customer for life. 60 percent of Millennials remain loyal to brands they purchase. On top of that, 56 percent of Millennials are drawn to mobile loyalty programs and are more likely to stay loyal to a brand because of loyalty rewards than any other generation. The majority of these loyal customers (94 percent) also love to use coupons and have a preference towards digital formats. 

How do you capture the Millennial generation and grow your restaurant business? 

-Meet Millennials where they are..on their phone.

-Help Millennials save time with a mobile ordering option and easy store finder.

-Enhance Millennials food experience with a visual menu and virtual gift cards. 

-Scratch the Millennials itch to save with mobile push notifications and in app coupons and promos.

-Capitalize on Millennials higher spending habits with in app upselling. 

-Gain the loyalty of Millennials with an in app loyalty rewards program. 

How you handle customer complaints and concerns can make or break your reputation.

When you make a purchase online or when you are choosing a local place to take your family for a meal, how do decide which option is the best? If you are like the 94% of other customers, you first read online reviews (Fan and Fuel, 2016).

Business and restaurant managers have to make customer reviews a priority if they want to be competitive in their industry. The unfortunate reality is you can not make everyone happy. No matter how much you pride yourself in customer service you will get a negative online review. It’s not an “if,” but a “when.” Some times negative experiences are truly out of your control, but often times you or your team bare some responsibility.

We have scoured the internet and read countless posts from experts across multiple industries to bring you what we think are the top 5 best practices.

1. Keep It Short And Sweet

Three to four sentences is a good rule of thumb.

No matter how unfair a negative review, resist the urge to defend every point and prove your case. It may sound counterintuitive, but long-winded responses can actually legitimize the complaint, as if the review needed defending in the first place.

For that reason, don’t go into detail (it can sound defensive) and don’t ask follow-up questions. You want to avoid saying anything that could further incite an upset customer and encourage them to add more detail and negativity to their review. (Ryan Erskine, Forbes.com)

2. Have A Statement Prepared

Use a prepared statement to respond to customers via social media as well as a sentence, which directs them to continue the conversation offline (e.g., customer care number or Direct Message). In a customer’s eyes, a lack of response is a decision to ignore them. So try to respond within an hour. For instance, “Hey Danielle, thanks for letting us know! Can you… . Apologies for the inconvenience. (Kandia Johnson, blackenterprise.com)

3. Say Thank You

Show customers that your business appreciates and values candid feedback, and always remember to say thank you in responses to reviews (even the bad ones).

Some things you can say:

• “Thank you for your review. I’m sorry to hear you had such a frustrating experience, but I really appreciate you bringing this issue to my attention.”
• “Thank you for bringing this to our attention. We’re sorry you had a bad experience. We’ll strive to do better. ”
• “Thank you for letting us know know about this. Your feedback helps us get better. We are looking into this issue and hope to resolve it promptly and accurately.” (reviewtrackers.com)

4. Offer To Make It Right

Always offer to make your wrongs right. If someone was unhappy with their meal, invite them in for a free dinner on the house, and put your best chef on it. If their shirt arrived with a tear in the sleeve, send a replacement one — and do it ASAP.

Many times, customers won’t take you up on your offer of a freebie, but it’s vital that you offer regardless — if only to show potential leads that you’re willing to go the extra mile. (Tara Johnson, cpcstrategy.com)

5. Find The Learning Experience

The only negative experience is one in which you can’t learn something from. Don’t make this review one of them. Through listening and talking to your colleagues, find the learning experience.

If your customer was having a bad day, jot down some notes or phrases that you can say next time and see if that works. If the product has a limitation, write down a sound-bite that you can share, or have someone’s name or email address you can pass to the customer. Have a running document of the reviews, what caused them, and your learning experience so that you’re constantly iterating upon and improving yours, and the customer’s experiences. ( Adriti Gulati, Hubspot.com)

These 5 tips can help you turn lemons into lemonade when a negative online review comes your way. How you handle a negative review speaks volumes to your customers present and future.

Of course everyone wants to avoid negative reviews, and there are steps you can take to decrease negative feedback. For restaurant owners specifically, one surefire way to avoid a negative review is order accuracy. Did you know mobile ordering increases order accuracy? This means fewer orders sent back, less food waste, and happier customers.