In many industries, Pareto’s Principle, also known as the 80/20 rule, applies: 20% of your customer base represent 80% of your business. In the restaurant industry, the basic idea applies as well, however, when we analyze the numbers, it is much more a 70/30 rather than an 80/20 rule.
But no matter what, it is essential that you treat your best customers well and manage to bring them back as quickly and frequently as possible.
Loyal customers are often defined as those who will purchase the same brand regardless of convenience or price. They’re not interested in alternatives. According to NPD, loyalty is the key reason consumers pick a place in 3 out of 10 visits in the foodservice industry across the Big 6 European countries (Big 6) – France, Spain, Italy, Germany, UK, and Russia. This makes ‘Loyalty’ together with the ‘Store Location’ the most important reason for choosing a place overall.
Of course, there are slight differences per country, with loyalty being more important in France (36%) and Spain (33%), compared to UK (27%) and Russia (25%).
Loyalty is also different depending on which segment in the market we are looking at. In those with the more ‘functional’ visits, it is less about experience and more about habit and convenience. For example, workplace cafeterias, coffee bars, and bakeries depend heavily on their customers coming back every day. On the opposite side of the spectrum, full-service restaurants rank lower because people also want to try something new from time to time and may therefore not be as loyal to one specific place.
Trust – a key driver during the pandemic
The key ingredient to building loyalty is trust, and trust has been an essential driver during the pandemic. In fact, 74% of all respondents across the Big 6 reported in June that they only patronize businesses they trust (NPD Sentiment Study, Big 6, June 2021). It was mostly about trust in the operator’s safety measures and hygiene, but trust in the people also plays a big role. Interestingly, people don’t trust brands/chains as much as they trust people/independent restaurant owners.
The road ahead
Whilst Loyalty had been an increasingly important driver for consumers’ restaurant choices before COVID-19, it was elevated even more during the pandemic. Because trust was so much more important, people tended to stick to the places they liked and knew; and they were not open to trying anything new.
There is no question that the appeal of going to places that I have never been to or trying food that I never experienced before will come back. But the loyalty – built through trust – is expected to remain a growing driver for people when they make the choice of where to go.