The Ten-Minute Manager's Guide to...Cultivating Regular Guests

By Virginia Gerst, Special to R&I -- Restaurants & Institutions, 11/1/2005

Winning new business is nice but return customers are the bread and butter of successful operations.
“Regulars are important to chains, and they are mandatory for the independent operator,” says Ronald Gorodesky, president of Restaurant Advisory Services, a Blue Bell, Pa.-based restaurant-management company. “Independents look for 50% to 60% repeat business.”

Building a core of regulars can be as simple as a warm greeting at the door or as complex as an reward-laden frequent-diner program. Whatever the method, the goal is to bring first-time visitors back again and again.

Memory Bank Rates Interest
Staff members at Schwartz Brothers Restaurants butter up regulars by remembering their favorite table, menu items and beverages.

Management of the Bellevue, Wash.-based multiconcept operator finds that tracking such details helps keep the company on track.

“We are in the business of serving wonderful food in a great atmosphere, but we really are in the business of making people feel special,” says Lindsey Schwartz, president of the company that includes Seattle-area restaurants Atrium Cafe, Chandler’s Crabhouse, Daniel’s Broiler and Piazza Italian Cafe.

For 35 years, such information had been stored on note cards, pulled before each guest’s arrival and updated after each visit. It recently has been transferred to a point-of-sale system that does the job.

Computer-based solutions, designed to store relevant personal information about thousands of customers, function as marketing tools as well as memory banks, and are already in use in other industries. Restaurant consultant Gorodesky calls them “the wave of the future” for foodservice operators.

“Restaurants are behind the rest of the corporate world in the use of technology,” he says. “But they eventually catch up. And when they do, it makes a major impact on business.”

Regular Training
It’s not enough for managers to understand the importance of pampering repeat customers. The serving staff needs to be on board too.

“We train employees to ask themselves at every table, ‘Will these guests come back?’” says Schwartz. “Servers need to think about what they can do to make sure that happens.”

At daily meetings, managers read letters from satisfied customers and discuss problems that may have arisen with guests. “We discuss what we plan to do that night to make sure people will come back,” says Schwartz. “It’s the mindset we want all our employees to have.”

Co-owners Moshe Petel and Spurgeon Solomon take a similar approach during meetings at 75-seat Grazie, an upscale Italian restaurant in Miami Beach.

“We tell our staff every day that the customer is king,” says Petel. “Without customers, we are nothing, because they support the restaurant. It’s important that everybody on staff appreciates that.”

Newsletter Perfect
Newsletters are “a tremendous way” of building customer loyalty, according to Michael Franks, co-owner of Chez Melange, a 70-seat cafe in Redondo Beach, Calif.

For the 22 years he and Chef Robert Bell have operated the restaurant, Franks has mailed a monthly newsletter; he switched to a weekly electronic version in 2004. “E-mail gets to people faster, more often and with less cost,” Franks explains.

So far, 5,000 diners have filled out forms, delivered with their meal checks, requesting the communiqués. Newsletters also are posted on the restaurant’s Web site.

“We have customers who have moved as far away as Singapore getting it,” says Franks. “We think of them as family who have left town; this keeps us in touch.”

The newsletter originally was designed to promote upcoming events at Chez Melange as well as at the partners’ Chez Allez Gourmet Shop and Chez School of Food and Wine. Franks has since expanded its scope to include personal updates on his family and restaurant staff, information on seasonal produce, details of relevant community events and reviews of area restaurants.

Customer feedback reveals a taste for the broader, chatty approach. The reviews have proven particularly popular. “Some people want to know who I think I am to criticize other people’s restaurants,” he says. “But most say my opinions are their favorite feature.”

Newsletters keep readers connected to Chez Melange.

“When you’ve been around for 22 years, there is a danger that people will forget about you,” says Franks. “This keeps us fresh, and reminds people that we are still here.”

Welcome to the Club
Dining clubs that reward guest loyalty can be powerful tools for building repeat business.

The Palm Restaurant established its 837 Club eight years ago. Today, 90,000 diners belong, according to Fred Thimm, president and CEO of the Washington, D.C.-based steakhouse chain.

Members pay a one-time $25 fee and receive a point for every dollar spent. Points are redeemable for items ranging from dinner certificates to the top prize: a seven-day trip to any of the two-dozen cities where Palm operates. Invitations to members-only dinners, complimentary wine selections and discounts at select vacation destinations also are part of the membership package.

The program has paid big dividends, Thimm points out. In 2004, its 90,000 members accounted for one-third of the chain’s sales.

Gastronomy, a Salt Lake City-based multiconcept operator with nine restaurants—including Baci Trattoria, Market Street Grill and The New Yorker—has 17,500 members in its frequent diners program.

Guests, who pay a one-time $15 fee, receive one point for every dollar spent; 350 points earns a certificate for $25 toward a Gastronomy meal. Members receive quarterly reports and annual membership cards.

In addition, the top 100 diners at each restaurant, deemed “premieres,” receive special cards and benefits including free valet parking and permission to order the chain’s popular early bird dinners at any time.

Care and Feeding
Personal relationships mean business for Grazie. Eighty percent of customers are repeats, according to co-owner Moshe Petel. He and partner Spurgeon Solomon go to great lengths to take care of them.

“One of us is always there, and we recognize our regulars,” says Petel. “They are the ones who keep Grazie going; we will do anything to make them happy.”

If car parkers are backed up, Petel or Solomon grab the keys and fetch a regular’s automobile. If a camera battery dies or a mother needs apple juice for a child, one of the partners goes on a quick shopping trip.

The owners surprise regulars with free appetizers, desserts or glasses of limoncello, and sometimes tear up an entire dinner check. When new menu items are introduced, they serve samples, then stop by the table for feedback.

“People really appreciate it,” says Petel. “They think—‘Wow, my opinion counts here; they have me trying new things.’ The reaction is amazing.”

Personal relationships put regulars on management’s team.

“When customers feel a connection with the owners, they tell you things they don’t like on the menu, because they want you to succeed,” explains Petel. “If guests don’t know you, they leave and tell their friends. And they won’t come back.”

Virginia Gerst is a Chicago-based freelance writer.