In a recent interview with Gary Vaynerchuk, Jon Taffer (known for his hit show Bar Rescue) touched on restaurant marketing and customer retention, saying:
- A first-time customer is about 40% likely to return for a second visit.
- If they return for a second visit, they’re still only about 42% likely to return for a third visit.
- If they return for a third visit, they’re 70% likely to return for a fourth visit.
Taffer emphasizes how important it is to capture guests’ loyalty on their first three visits. If you can do that, you most likely have a long-term return customer.
He lays out an example of how this might work.
- The host/hostess asks the guest if it’s their first time eating at your restaurant.
- If they’re first-timers, you signal this to servers and management (e.g. new guests get red napkins).
- Management comps the guest’s meal on their first visit, and hands them a “$5 off” coupon for a specific meal. That coupon prompts the second visit.
- Servers and management know it’s the guest’s second visit when they use the coupon — only given to select first-time guests.
- The second meal is closing, management approaches the guest as they’re finishing, asks how the meal was (ya know, does the standard restaurant manager small talk) and says, “You’ve gotta try our [insert dessert or appetizer].” Then hands them a coupon for a free piece of cheesecake, for example, for use during their third visit. Now you’ve prompted their third visit.
So, let’s say the first meal cost you $5. The second meal isn’t a big loss, with only a $5 discount. The third meal you gave away a $1.35 piece of cheesecake.