Picture this: Customer Layla visited your restaurant, enjoyed the food, paid the bill, and left, never to return. The visit was purely transactional from start to end, with no personal connection made. Satisfied but not engaged, Layla chose other restaurants for subsequent meals.
But this story could have a different result. When Layla visited your restaurant, the server Fatima remembered her, offered a personal recommendation, and greeted her warmly upon her return. Feeling valued, Layla became a regular guest and brought friends.
The difference? Customer engagement.
For restaurants, and many other businesses, customer engagement can be a powerful tool to keep customers interested and turn them into regulars.
In this article, we’ll explain what customer engagement is, and isn’t and why it’s important. We’ll show you how to use customer engagement to transform one-time visitors into loyal advocates.
Let’s dive in!
What Is Customer Engagement?
In its simplest form, customer engagement is the process of building an emotional connection between your brand and your customers.
In a restaurant setting or other sectors , customer engagement is going beyond the transaction of serving a guest and getting them to pay the bill. It’s about creating positive, memorable interactions that foster loyalty and repeat visits. This involves personalized service, attentive staff, and making guests feel valued and recognized.
Customer engagement is applicable to almost every industry. However, it’s quite popular in business-to-consumer (B2C) industries like restaurants, coffee shops, e-commerce, and other retailers.
Common ways brands engage guests is through online communication like email and SMS marketing and in-person experiences at their store or dining concept.
Other opportunities include social media marketing, customer loyalty programs, mobile apps, and omni-channel marketing.
Further reading: How to Create a Customer-Centric Loyalty Program
The psychology behind customer engagement
While it may seem like a new idea, the power of customer engagement in restaurants taps into fundamental human psychology. It boils down to 3 main pillars: trust, personalization, and emotions versus transactions.
Let’s clarify what this means.
- Trust and familiarity: Our inherent nature drives us towards the known and comfortable. Consistent positive experiences build trust, making guests more likely to return to a familiar and reliable establishment.
- The power of personalization: Even small, genuine gestures that show you recognize and remember a guest create a significant emotional impact. This personalized attention fosters a feeling of value beyond a simple transaction.
- Emotional loyalty vs. transactional loyalty: True engagement cultivates emotional bonds, leading to deeper loyalty than that driven solely by discounts or convenience. Guests who feel connected return for more than just the food. They return for the positive experience and feeling of connection.
Benefits of customer engagement for restaurants
Now, let’s look at why you should truly care about customer engagement in your restaurant, coffee shop, or bakery.
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Improved customer retention
One of the top benefits of customer engagement is that it increases retention. Research shows that a 5% increase in retention can boost profits by 25% to 95%!
Retention means customers keep coming back to your coffee shop, food truck, or restaurant. If you manage multiple locations or branches, it can mean guests dining at your concept wherever you are.
Research has also found customer acquisition is 5 times more expensive than retention. In addition, it’s easier and cheaper to sell to an existing customer than to sell to a new one.
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Opportunity to try new products
Loyal and engaged customers are more likely to be excited by your new products, dishes, and beverages.
If you offer seasonal menu items, your engaged customers will be the first to try them. In fact, they are 50% more likely to try new products, compared to only 31% of new customers.
You can take it a step further and ask them to rate new products or take photos and post them on social media.
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Better referrals and more customers
Engaged, loyal customers are more likely to refer you to friends, family, and followers. They can help improve your restaurant’s referral program. This means more high-quality customers coming to your restaurant or coffee shop.
For many brands, a referral program is part of their loyalty program, where both the referrer and the referred get points or rewards.
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Higher lifetime value
Another important benefit of customer engagement is that it increases your customer lifetime value (CLV). CLV for a restaurant is the total estimated revenue a single customer will generate for your concept over their entire relationship with you.
This metric considers how much customers spend per visit, how often they visit, and for how long they remain a customer. Understanding CLV helps restaurants recognize the long-term worth of each guest and make informed decisions about customer acquisition and retention efforts.
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Stronger competitive edge
In a saturated F&B market, engaging with your customers is an opportunity to stand out from your competition and stay top of mind. Since customer engagement helps build loyalty beyond food, it can strengthen a restaurant’s reputation and drive repeat business.
Measuring customer engagement in your restaurant
Every strategy requires key performance indicators (KPIs) and metrics to ensure its success. Your customer engagement strategy is no different. Here are 5 of the top customer engagement metrics to track.
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Customer retention rate
One of the most important customer engagement metrics is the customer retention rate. It measures the percentage of your customers who continue to dine with you over a defined period, usually a year.
A high retention rate signals strong engagement and loyalty, indicating guests are finding value in their relationship with your restaurant.
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Repeat visit frequency
This metric indicates how often existing guests or customers come back to your restaurant, food truck, or coffee shop.
The higher the frequency of visits, the higher the level of loyalty and the deeper level of customer engagement. It’s an indicator that customers are choosing your restaurant as their preferred, regular dining option.
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Net Promoter Score (NPS)
The NPS measures customer satisfaction and their willingness to recommend you. A high score indicates strong engagement and loyalty, meaning these satisfied customers can contribute to your word-of-mouth marketing efforts.
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Loyalty program participation
One of the benefits of loyalty programs is boosting customer engagement. Tracking loyalty program participation means seeing the number of customers who actively use and engage with your restaurant loyalty program. It’s also an indicator that your rewards and incentives are resonating and encouraging engagement and repeat business.
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Social media engagement
To monitor engagement on social media, you’ll need to track metrics such as likes or reactions and comments. Shares are an engagement metric but not all posts deserve to be shared.
A high level of engagement shows your content resonates with your audience, fosters a sense of community and connection beyond in-person dining.
How to improve customer engagement in your restaurant
By now, you understand the value of customer engagement and how to measure it. Here are a few quick tips on how to increase engagement in your restaurant, coffee shop, or other business.
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Train your staff
Inform staff about what customer engagement is, how it works, and train them to offer personalized, memorable dining experiences.
For staff, engagement can take the form of warm greeting, smiling, and using the guest’s name (if the data is available). They should also practice active listening and be clear when articulating menu details and answering questions.
Further reading: Top 8 Strategies for Providing Excellent Customer Service
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Use technology
Using restaurant technology, including a restaurant management system (RMS), point-of-sale (POS) system, and customer relationship management (CRM) tools are all ways to increase engagement.
It’s best to use solutions that can integrate together so you can have a unified guest experience at each touchpoint. For example, your restaurant POS can provide details such as guests’ previous orders, which staff can use to personalize the experience or make recommendations.
If you have a restaurant website or mobile app, consider integrating it with a loyalty program to offer more personalized experiences.
For example, if you’re using Foodics, you can integrate your RMS with your POS, restaurant website and mobile app, loyalty program, self-order kiosk, and more.
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Create experiences
These in-house experiences can include special events, a chef meet-and-greet, or interactive menus. Use menu engineering tools to identify customer favorites and recommend them to guests, without being pushy or salesy.
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Be active online
Last but certainly not least, maintain your online presence to engage with guests across social media, your website, mobile app, and other channels.
Build a community around your brand, run restaurant email marketing campaigns, among others.
To conclude
The best customer engagement strategies are those that feel genuine, personalized, and consistently build meaningful connections with guests beyond transactions.
Engagement is about creating memorable experiences that keep customers coming back.
In a world where tech and automation take center stage, the F&B industry remains a highly human-focused industry. However, restaurants can use technology to improve engagement and retention.
Foodics is the leading Restaurant Management System that helps restaurants and cafes to create the best experience through seamless operations and insightful reports. We help business owners make decisions about the best customer engagement strategies. Book a personalized demo now!
