How to Retain Lifelong Customers for your Catering Business
July 10th, 2017
Repeat business is the lifeblood of a successful catering company. Delighted customers that return again and again not only know what they want, but make it easier for you to plan and deliver. Despite this, many catering companies focus heavily on new business, leaving their existing customers stranded. In this article we share some tips for building better client relationships, and turning those new contacts into lifelong customers that will champion your business for years to come.
The stats: Why customer retention is a good thing
A study by Bain & Company estimates that an increase in customer retention by just 5% leads to up to 95% overall increase in profits, while keeping existing customers costs five times less than attracting new ones. These are some pretty impressing numbers. But if you’re still not convinced, a Cross-Channel Marketing Report conducted in 2014 found that over 4 in 5 companies agreed that retention is cheaper than acquisition. If you’re not focused on repeat business, maybe it’s time to ask yourself: ‘Why?’
Provide consistent customer service across all your channels
There’s nothing more infuriating than an inactive Facebook page. While your business doesn’t have to sign up to every new social media service under the sun, it’s important that every channel you do use has speedy and effective response times. Show your customers that you care by addressing their questions and concerns quickly and effectively, be it via email, phone, Twitter or Facebook. Some services (like Facebook) even provide response rate statistics, making it easier for you to tell how your customer service staff are performing.
Distribute customer satisfaction surveys
Done right, customer surveys can engage first time customers by encouraging them to gauge and recall the quality of your service. Using an automated software solution (like Foodstorm) and emailing it through your CRM database is the most cost effective solution, but in order to make the most of your questionnaire, you’ll want to consider the following benefits and considerations:
Benefits of customer satisfaction surveys
- Real time feedback – Survey results from recent customers will give you up to date performance reports, instead of how your company was performing six months ago.
- Benchmarks and baselines – using the same survey questions allows you to create a database of results for determining baseline standards and setting future benchmarks and goals.
- Raises awareness – Not only do you gain valuable insights into the customer experience with your brand, you also re-ignite awareness between you and your customers.
- Demonstrates customer value – Asking customers for their opinion shows that you value their feedback and strengthens existing bonds for better opportunities at repeat business.
Considerations when designing your survey
Spam and junk mail are the bane of our modern digital existence, and the last thing you want is for your catering company to be a part of it. Ensure your customers are aware that their information will be used securely, and consider offering anonymous feedback for better response rates.
Make sure the software allows for personalisation of your message to customers, don’t send surveys too often, and consider incentivising the process in some way (10% off your next catering service etc). Also, ensure that your CRM or email capture portal is set up so that customers can opt out if they need to.
Implement a customer loyalty program
According to a survey by selfstartr.com, 83% of customers agree that they are more likely to do repeat business with companies that have loyalty programs. That statistic alone should be enough incentive to start a loyalty program for your customers.
What is a Customer Loyalty Program?
A customer loyalty program (CLP) rewards customers with specific discounts, prizes or incentives for repeat business. The best kind of CLPs are relatively simple, though setting one up requires a bit of forethought. Customers should be encouraged to return again and again to your business, hitting milestones and goals repeatedly. That’s the essence of any loyalty program. The more your customers use your service, the more they are rewarded.
How do I set up a Customer Loyalty Program?
While it sounds simple on paper, setting up a great CLP that works for both you and your customers requires a bit of strategic planning. The last thing you want is to overpromise and underdeliver.
Here are 3 key points for designing your Loyalty Program:
- Set clear goals and targets – The simpler the better. Without clear milestones and finish lines, customers lose interest.
- Reward the ‘right type’ of behaviour – This will depend largely on your business and what you are offering as a reward. The simple ‘free tenth coffee’ idea scales pretty well across most business types. If you’re unsure, look at business leaders in your speciality and see what they do.
- Rewards must be a bonus – The final element to a successful CLP is to pitch every milestone or goal as a clearly defined award. Fuzzy ‘point accumulation’ programs aren’t as effective as it’s difficult to identify an end goal that is a bonus. The reward should also be ‘worth the effort’ for your customers.
Artificial advancement: The key to kickstarting your customer loyalty program
In their book The Endowed Progress Effect, two professors, Joseph Nunes and Xavier Dreze, proved that giving your customers a head start, or an ‘Artificial Advancement’, in a CLP will benefit their return rate.
They showed this with a relatively simple experiment. Customers of a car wash company were given one of two loyalty cards. They were both similar in design, with the key difference being one had eight unmarked loyalty steps and the other had ten, but with the first two pre-stamped. All customers were told they would receive a free carwash when their card was filled.
You know what these esteemed professors found? Though both groups of customers had to purchase eight car washes to get a free carwash, only about 1 in 5 from the ‘8 Stamp’ group came back enough times to get a free wash. The ’10 Stamp’ group meanwhile, boasted a completion rate of about 1 in 3.
Giving your customers a head start on their loyalty program is a sure fire way to win their hearts and generate more effective repeat business. These types of programs also translate well into the catering and food service industry. Give it a shot, and watch those first time clients return again and again.
Be proactive with your email marketing
Personalising your email marketing and newsletters is only part of the journey to converting those first time clients into lifelong customers. Your mail campaigns should focus on adding value, be it through special offers for repeat customers and referrals, or providing great content to show your customers you’re more than just a catering business – you’re an authority in the industry.
With up to 80% of your business potentially coming from those 20% that are your repeat customers, email marketing can also be handy for communicating open dates and final order dates for special events and holiday calendars. Promote an early bird special or offer up last minute deals, just make sure you’re always providing value to your customers and showing them how much you care about their business.
Get into text
With outstanding open rates and a direct connection right to your customer’s handsets, SMS is an underutilised but effective way to communicate and market to your customer base. SMS marketing is highly personal. You can use it to:
- Provide up to date progress reports on catering services
- Offer short window special offers
- Direct customers to your customer satisfaction surveys or other links
- Send reminders about upcoming deadlines
Turn that first time customer into a regular user by providing a direct and intimate link between them and your business. Use SMS sparingly though; make sure you have permission from the customer to receive SMS updates and offer an opt out option. Also, make sure you have the ability to receive and respond to any replies.
Coordinate special offers through your website
Your catering website should be the hub of your digital activity. After a first time client has had a chance to digest just how amazing your catering service is, why not send them a follow up SMS or email encouraging them customer to check out a special offer on your website. You’re not only providing value, you’re showing customers how to use your website and make the most of your eCommerce platform.
Empower your customers with online accounts
Your CRM and eCommerce platform isn’t just for you and your staff. Give your customers online access to their invoices, order history and payment options. Make it easy for your customers to repeat orders with a single click, setup order schedules (if you cater to offices and businesses, this is a great tool) and generally make customers want to go back to your website again and again. If your current platform doesn’t offer this kind of ease of use, why not check out Foodstorm’s easy-to-use Catering Management Software, and make your business hum with mobile friendly software built specifically for the food service industry.
Never forget what makes your customers love you in the first place
Great food and outstanding service. Without these two cornerstones, no catering business can gain the benefits of happy, lifelong clients. Make every catering experience a dream for your customers, be it a first time service, or a regular Wednesday lunch you’ve been putting on for years.
While you go out and make daring acts of culinary excellence, Foodstorm has your back. A robust and feature rich Catering Management Software that makes it easy to focus on what you love doing, consistently delighting your customers with amazing food and excellent service.