Customer Loyalty: The Bread and Butter of the Restaurant Business

The restaurant industry is ultra competitive. A shocking 60 percent don’t survive the first year, and 80 percent fail within five years. Those that beat the odds focus on creating amazing dining experiences that go beyond what’s served at the table. They recognize their secret ingredient is the customer, and demonstrate a unique ability to connect with them that inspires incredible loyalty. The most loved restaurants do this by operationalizing a customer-centric culture, providing channels for open feedback and creating an experience for their diners that goes beyond the meal. These top restaurants demonstrate important lessons not only for the hospitality industry, but also for any business striving to win customers’ hearts.

The restaurant industry is ultra competitive...those that beat the odds focus on creating amazing dining experiences that go beyond what's served at the table.

Make Customers Central to the Culture

There are countless outstanding restaurants ranging from Michelin-rated dining spectaculars to hole-in-the-wall fast dining favorites. Yet they all have one thing in common: a pervasive culture that puts customer satisfaction first.New York restaurateur Danny Meyer, owner of Union Square Hospitality Group, embodies this type of culture. In his seminal book Setting the Table, he writes, “My appreciation of the power of hospitality and my desire to harness it have been the greatest contribution to whatever success my restaurants and businesses have had.” Meyer opened his first restaurant at age 27 with little to no experience with finance, marketing or operations. Now, he’s opened more than a dozen restaurants with the focus on diner satisfaction—three of which have Michelin stars.

“My appreciation of the power of hospitality and my desire to harness it have been the greatest contribution to whatever success my restaurants and businesses have had.” - Restaurateur Danny Meyer

While Meyer made customer service the backbone of his restaurants, another chef—David Bouley—used a unique workflow to ingrain a diner-first mindset in his employees. He set up the kitchen so the person bussing tables had to walk by the chef to get to the dishwasher. If all the food hadn’t been eaten, the chef asked the busser why the guest didn’t finish their meal. Bouley wanted to ensure that employees were attentive and guests were enjoying their meals. If they weren’t he would find out why and send a bottle of champagne and complimentary course to their table while the staff addressed any issues to get the diner’s experience back on track.Businesses should take note of how these famous restaurateurs bake a customer-centric approach into their company’s culture and identity.

Turn Feedback into Action

Customers use social media and review sites such as Twitter, Facebook and Yelp to discover, explore and rate their experiences with different brands—and are especially passionate about their dining experiences. The best businesses use these community sites as well as more traditional outlets to learn what’s working well and to address what’s not.No one knows this better than Thomas Keller, known for his Napa Valley restaurant The French Laundry. In January, his New York restaurant Per Se received a terrible review in the New York Times for hefty price tags, cold food and unaccommodating servers that left wine glasses empty throughout courses. Keller responded with a letter to his customers: “The fact that The New York Times restaurant critic Pete Wells’ dining experiences at Per Se did not live up to his expectations and to ours is greatly disappointing to me and to my team. We pride ourselves on maintaining the highest standards, but we make mistakes along the way. We are sorry we let you down.” More importantly, Keller initiated quality control checks to ensure that the reviewer’s complaints were addressed and future customers had a premium experience.

"We pride ourselves on maintaining the highest standards, but we make mistakes along the way" - Chef Thomas Keller, addressing criticism and making changes.

Keller takes a similar approach to criticism on a much smaller scale. When an Australian diner at The French Laundry expressed disappointment with his meal by writing so on the bill, Keller scheduled time to discuss the customer’s feedback in depth, despite the time difference. The conversation ended with Keller thanking him for his review and offering him a complimentary meal upon his return to Napa Valley.Keller recognizes the importance of hearing customer feedback and acting on it. By taking advantage of both public and private forums, he’s able to maintain a positive reputation for his restaurants.

Stay Top of Mind After the Meal

The experience shouldn’t end once the customer signs the check. Restaurants need to stay top of mind so customers spread the word online and to friends, and continue to come back for more. Take San Francisco-based Heirloom for instance. The restaurant sends monthly emails from Owner and Executive Chef Matt Straus on topics of interest such as organic winemaking, seasonal fruit recipes and even personal cooking anecdotes. This ultimately inspired a quarterly magazine where diners can submit stories in exchange for a five-course dinner.The post-meal relationship can also encompass special offers or unique experiences. Heirloom hosts gnocchi classes, wine tastings and special dinners for its most loyal customers. For example, the restaurant hosts a unique dinner the night before it closes for a long holiday. Diners can join for a meal made from everything left in the kitchen—a delicious combination of flavors that would never be found on the regular menu. By elevating the experience from a single meal to an ongoing relationship, restaurants ensure a loyal customer base that always comes back for second helpings.

By elevating the experience from a single meal to an ongoing relationship, restaurants ensure a loyal customer base that always comes back for second helpings.

The most beloved restaurants know that creating loyal customers requires a pervasive dedication to all aspects of the dining experience, from the meal to ongoing engagement and back again. The focus on customer service, open feedback and unique experiences isn’t limited to restaurants however. Any business can take a page from the restaurant playbook to delight its customers When all the right ingredients of the customer experience come together, happy customers return time again—to restaurants, retailers and beyond.We’d love to hear how you approach customer service and building loyalty in your own business, or if you’ve been inspired by a great example out in the wild. Hit us on Twitter @narvarinc.The Narvar Team wrote this story, which originally appeared in Medium. Laura Pauli contributed.