This blog post intends to look at the one night stand trap: restaurant diners customer lifetime value.

Restaurant diners can vaguely be split into two categories: one night stands and long term relationships.

The one night stands are only interested in their meal that night. They come along to your restaurant for a good time, not a long time, and tend to eat, drink and spend.

restaurant diners customer lifetime value

Long term relationships are customers who are known to you and your restaurant staff. They dine in your restaurant fairly regularly and have a favourite dish. They choose to come back to your restaurant because they know you and rate you and appreciate the familiarity.

The one night stand trap

There’s a good chance one night stands make up the bulk of your customer base so it’s understandable why restaurateurs tend to focus on them instead of the long term relationships.

Restaurateurs are also guilty of falling into the trap of chasing new one night stands instead of trying to turn the ones they’ve already had into long term relationships, or nurturing the long term relationships they already have.

And it is a trap. Because long term relationships are a lot more meaningful to your business, and can make you a lot more money, than you think.

Restaurant customer retention

According to the Gartner Group, 20 percent of existing customers will be the source of 80 percent of future profits and increasing customer retention rates by only 5 percent will increase profits by 25 to 95 percent

The next time you wave a one night stand out the door of your restaurant, think of these words: customer lifetime value.

Customer lifetime value of your restaurant diners

Customer lifetime value refers to the net profit from the entire future relationship with a customer.

So if a customer comes into your restaurant and spends £100 then comes back once a month for twenty years – that’s a potential customer lifetime value of £24,000.

Instead of putting £100 in your till that night then turning your attention to attracting tomorrow night’s guests, a bit of effort nurturing a relationship with the guest who just left could pay dividends.

Online feedback

So how do you go about building a long term relationship with your restaurant customers?

The obvious answer is to give them an excellent personalised customer service experience that will make them want to come back.

Another important factor of building a long term relationship with your restaurant customer is to monitor their feedback and respond to it. Reviews of your restaurant on TripAdvisor, Yelp, Twitter, etc, are a valuable resource of your customers experience. Did someone have a great time at your restaurant? Thank them personally. Did a customer have a valid complaint? Respond to it, take their criticism on board, and use it to make improvements to the way you run your business.

Responding personally to your customers online allows you to build a relationship of trust and loyalty.

How simpleERB can help

simpleERB makes it easier for restaurateurs to manage their online reviews and analyse their customer feedback.

We give you the option to add a link to your customer confirmation email which allows the customer to submit their thoughts to you after their meal.

This allows you to read your feedback directly from the customer and means you can respond to and deal with negative reviews before they reach review sites.

The features also encourages customers to share positive review on Yelp, Trip Advisor and Facebook (you’ll need to be logged into simpleERB to see).

simpleERB builds a complete record of all your customers and their preferences, ensuring that if Customer A is gluten intolerant and Customer B likes a seat by the window, you’ll be aware of this before they arrive at your restaurant and an create a personalised customer service experience.

simpleERB can help you boost boost the customer lifetime value of your restaurants diners.

Because while one night stands are fun, long term relationships are ultimately a lot more satisfying (and profitable).



What’s your favourite acronym? Here on the simpleERB blog we’re still partial to a WTF. ROFL and LMAO feel pretty dated now, and don’t get us started on YOLO. Incidentally, we just found out the ubiquitous BAE stands for Before Anyone Else. You learn something new every day.

Restaurant acronyms

Restaurant acronyms

Of course business acronyms are very important too. Everyone knows B2B, ROI and KPI, but were you aware of OIBDA (Operating Income Before Depreciation And Amortisation) and GAAP (Generally Accepted Accounting Principles?) There’s an acronym to suit every situation, a fact exemplified by recent revelations regarding New York restaurateur Danny Meyer.

Meyer keeps a list of each customer who books at any of the restaurants within his Union Square Hospitality Group and uses acronyms to take notes of their quirks, notable features and preferences. A mole within the Union Square Hospitality Group claims it is the most thorough customer system they have seen in the various restaurant groups they have worked for. Here’s some of the acronyms and codes Meyer uses in his customer database with an explanation of what they mean.

FTD: A first time diner

NL:  A customer who will “Need Love”.

LOL: A customer who will need “Lots Of Love”

SOE: A customer with a “Sense Of Entitlement”.

BIG SIGN: A customer who may well be wearing a sign saying “pay attention to how important I am”.

NO FLY ZONE: A person who will find all of Meyer’s restaurants mysteriously booked up whenever he or she tries to make a reservation. (The mole says the designation is often used for fake names used by companies that make, then resell, reservations.)

MUST DO: An important customer who will always get a table, no matter what.

How simpleERB can help

Meyer’s codes and acronyms are extensive, but a useful way to keep track of customers needs and offer a tailored customer service experience. If you fancy making up your own restaurant acronyms, simpleERB can help. We store a complete database of all your customers and their preferences, so if you have a LOL or a SOE, you’ll know about it in advance and can prepare accordingly.

Just make sure your acronyms aren’t too offensive or NSFW. If a staff member let them slip, JK probably wouldn’t be defensive enough –  and you may find your customers go AWOL.

Want to keep a record of all your customers preferences? Sign up to simpleERB – free for small restaurants and easily affordable for bigger ones.

 

 

 



It would appear, going by recent research, that the child of this writer has been secretly in control of Britain’s menus. I know, it came as a surprise to me too. Alas, since 2010 (the year she was born), Mac and Cheese (her favourite) has seen it’s place on restaurant menus increase by 550%. Customers it seems, can’t get enough.

Some theories suggest that a return to traditional home cooked foods is behind the surge in popularity, but you can’t rule out the explosion of ‘American’ cooking whereby ‘Mac’ regularly appears as a side dish.

Some other interesting findings were that pizzas and burgers remain the favourites whilst customers are getting a better choice of vegetarian options than previously. The term ‘superfood’ is also much more widely used.

You may wonder if these trends matter, but it does give some sort of guide to how customers are viewing eating out and what they are looking for. At the end of the day, we’d all like to know our diners better.

know your customers

know your customersimpleERB is clever. You know that already. As well as all of the calculations it makes under the hood, it’s also blessed with a photographic memory. The handy thing about this is that simpleERB remembers your customers. Mr Fleming? Ah yes, he likes his red wine chilled and prefers to sit away from the bar. When you add notes about a customer, simpleERB remembers. The next time the customer comes in, simpleERB will present you with the info you’ve already noted meaning the customer feels at home and you can treat them (a bit) like family.

simpleERB also allows you to download your customer list at any time, so you can export them to your own mailing system for email marketing. You can segment out your customers based on date of booking or based on the quick info buttons, which you can customise meaning you can always stay in touch.

 



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