Operations – Developing Customers

by Peter Thor, President, Bellissimo Foods

Where do you find customers, and how do you keep them?  These are among the most frequently asked questions by restaurant operators both big and small.  Finding any customer is easy.  Finding and developing loyal customers, however, is much more difficult.

Customers are those with whom you engage in transactions for mutual gain.  This broad definition of “customer” extends beyond paying patrons (guests) to both internal and external “customers” (e.g. employees and suppliers) on whom you depend to make your business successful and to grow.  Research has shown that business growth is closely linked to companies which focus on “customer loyalty”.  Suppliers and restaurants which have a close working relationship and support one another all perform better.  It is common sense to also accept that enthusiastic loyal employees will provide better customer service and help sell your guests to become loyal customers.

So how does one go about developing customers?  Patrons that purchase food from you are guests, but perhaps not so easily converted to loyal customers.   As has been stressed many times, the quality independent pizzeria depends on repeat and loyal customers to be successful.  So you must have strategies in place to both win new customer trial and encourage repeat dining.  Advertising, coupons, door hangers, and school or community involvement are all good ways to get the initial trial.  Savvy operators, however, realize that coupons and price discounts do not win the type of loyal customer you want to keep.  Those who buy primarily on price will switch the moment they get something cheaper.

A growing tactic to encourage repeat business is loyalty programs.  In many forms, loyalty programs can be as simple or complex as you design.  In its simplest form, customers earn points toward free food via their purchases.  Coupon specials toward a future visit are also a form of a loyalty program, and many delivery pizzerias use coupons fixed or printed on the delivery box.  But even that becomes addicting.

Marketing to potential customers is necessary to encourage both trial and repeat, but all of it is wasted if the dining experience and food do not live up to the value proposition you’ve advertised.  This is where the chain restaurants’ constant focus on price and coupons is detrimental to our industry.  The constant bombardment of coupons to consumers conditions them to focus on price discounts.  So combat the coupon-driven chains and promote your pizzeria via the most effective marketing tool you have… promoting your unique difference!  Deliver value, not price.  Encourage trial via additional menu items like combo specials or up-selling new items.  Focus on your local area to cultivate first time guests and loyal customers.  Frequency is important in neighborhood advertising whether you use door hangers or sports team specials.

Developing a loyalty program is important for the following reasons:

  1.  Repeat business/loyal customers are required for the quality independent to grow and be financially successful
  2. Loyal customers’ “word of mouth” advertising is most effective – and free
  3. Using a loyalty program helps to learn about your customers.  It will help you better target your market and adapt your business over time
  4. Advertising and getting coupons to repeat customers is inexpensive as it can be donefor free via a website, Facebook or emails

Another way to generate repeat business is to have other “loyal” customers helping you, like your employees and your suppliers.  Employees are the front line in any business.  Their enthusiasm, knowledge of the menu, specials, and your quality ingredients can contribute greatly to your success.  Remembering that “customers are those with whom you engage in transactions for mutual gain”, treat your employees as the important part of the success chain they are.  A mutually beneficial relationship with employees rewards them with more than a paycheck, where everyone understands their roles and the importance of their contribution.  Loyalty (reward) programs work with employees as well.

Suppliers too should be customers.  If the supplier is simply participating in a weekly auction rather than a loyal sales relationship, the restaurateur will simply be a customer of convenience.  Many of the valuable benefits of a two-way “customer relationship” will be absent.  We (and maybe you) saw this first hand with Hurricane Sandy, where large broadline distributors left many independent pizza shops without service while their larger customers were serviced.  Short on a cheese on a Friday?  Who will deliver it to you?  Surely not the supplier who has to pitch his prices to you every week.  Far better to develop a customer relationship with key suppliers, where a mutually beneficial relationship can be fostered.

Loyal customers are required to be successful.  We encourage you to think broadly about who your customers are, how to attract them and, more importantly, how to keep them.  Our mutual success depends on it.

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