An Easy Way To Attract New Customers on a Low Budget

Blog / March 2, 2018

I recently watched a video of Jon Taffer who you probably know from the TV show Bar Rescue. He’s one of the most well known experts in the food industry. He gave some advice for gaining customers that I thought was very interesting and highly suggest trying it for your restaurant. It went like this:

For most restaurants the cost of acquiring a new customer using traditional advertising tactics is between $40-80. That means paying for magazine ads, radio, direct mail, paid social media, etc. 

It costs less to keep a customer than it does to gain new customers. The trick is to get new customers to return after they have a great experience. Jon notes that if first time customers have a great experience they’re 40% likely to visit a second time. If their second visit goes well they’re 42% likely to come a third time. If their third visit is good then they’re 70% likely to come again. So you not only have to market to them once, but through multiple visits.

Bring them in

To get a new customer in your door at minimal cost you should offer maybe 100 coupons to new visitors with no restrictions. Do this using your local network and social media channels. When the first time customer comes in and they hand the host or server the coupon they are given a red napkin instead of a white napkin. Or you can use some other kind of symbol so that your staff and your manager knows they’re a first time customer. 

During that first visit have your manager visit with the guest after they get their meal and ask how their meal is going. If it’s going well the manager can give the guest a business card or something to come back for a free dish like an appetizer. Now they’re coming back and it’s costed you the price of your food.

Bring them back

When the customer comes back a second time they present the business card to the host or server and gets another visit from the manager. Now you’re building a relationship with guests. After a second good experience, the manager can give a coupon one last time for a free dessert to get the customer back in a third time.

Now you’ve began making a loyal customer and it’s only costed you the price you’ve paid for your food rather than $40-80. If your brand is consistent with the good experience of your restaurant then your odds of those customers coming in regularly and at a higher frequency are over 70%.

One last thing I wanted to note about what Jon said is to not discount your food. He says people get addicted to discounts. They don’t get addicted to free. Again, they get addicted to discounts, not free. This is what I call the Groupon effect. Customers use things like groupon and likely won’t go back unless they have another groupon. People understand you can’t give away your food for free all the time so they expect the next time they come they will have to pay.

The video I'm referring to is embedded below. I’d highly suggest watching the whole video, but if you want to skip right to the good part it’s at 44 minutes.

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