Restaurants are always looking to drive a consistent stream of customers in the door. This process is known as customer acquisition or bringing in new customers to your business.
In the restaurant industry, customer acquisition is usually centered around mass communication. This includes restaurant marketing strategies such as newspaper ads, radio ads, and limited-time offers.
However, it’s tough to measure how effective mass communication strategies are because of how impersonal they are. That’s why it’s crucial to thoroughly understand the customer acquisition definition and how to use it for restaurant success.
What Is Customer Acquisition
Customer acquisition is the process of obtaining new customers and bringing them down the marketing funnel. This means guiding them from brand awareness to making a purchase decision.
Most companies take customer acquisition and its costs into account when evaluating how much value their customers bring their business. This is where customer acquisition management becomes necessary. Customer acquisition management is the link between customer relationship management (CRM) and advertising.
These are the processes for managing customer prospects, questions, and restaurant marketing strategies. Common and successful customer acquisition strategies are having a restaurant loyalty program and customer referral programs.
Key Takeaway: Customer acquisition in the restaurant industry is essential in order to keep your business running successfully. Having the right customer acquisition processes is key.
Benefits of Customer Acquisition
You’ll need a customer acquisition process in order to establish your business within the restaurant industry. Having one in place comes with many benefits such as gaining new clients and increasing revenue. It's also ideal for customer retention.
Three benefits of customer acquisition include:
- It helps bring in new clients for your business which results in more income and an increase in restaurant profit margin.
- Improves brand awareness by inclining clients to explore your other products, or in the restaurant industry, other locations or menu items.
- Attracts potential customers to your business. These customers include regular and old customers.
3 Ways to Measure Customer Acquisition
Tracking and measuring customer acquisition is important in order to understand your restaurant’s performance and costs. To do this, you’ll need to set restaurant KPIs.
Here are three ways to measure customer acquisition:
1. Conversion Rate
A restaurant’s conversion rate is similar to an eCommerce conversion rate. It’s a growth metric that measures the percentage of people that complete a process after starting it.
It’s important to establish the start and end of a process when working with conversion rates. For a restaurant, it can be the percentage of people that reserve a table compared to the total number of guests.
2. Customer Acquisition Cost
In order to understand how effective your customer acquisition strategies are, you need to calculate your customer acquisition cost (CAC). A company’s CAC is a metric that companies use to determine the success of acquisition processes.
It’s common for a CAC to help identify which processes are leading to the best results. Calculating CAC requires you to divide the marketing costs by the number of consumers.
3. The Rate of Visits and New Customer Acquisition
Your restaurant’s website will have some useful insights that you can use for customer acquisition strategies. This includes the rate of visits.
It’s possible to track early interactions with potential customers through the rate of visits on certain pages of your website. This allows you to evaluate how effective these landing pages are and how to improve them.
When it comes to the rate of new acquisitions, you can compare rates over different periods to determine if the results are increasing. To do this, multiply the number of customers you have acquired over a certain period by the length of that period.
4. Persuading Clients To Become Customers
The goal is to grab people’s attention and persuade them to become customers. It’s possible to do this by matching your niche market’s wants, needs, and expectations.
To do this, businesses will collect data through prospecting either online using digital technologies or offline. These strategies help businesses gain trust, affection, and loyal customers.
The Process of Customer Acquisition
The customer acquisition process is all about strategy and each business’ customer acquisition strategy will vary based on its industry. Some are more effective based on the targeted niche, but there are a few processes that you should always follow.
Here is the process of customer acquisition:
1. Identify Your Potential Customers
Before you opening a restaurant, opening a bakery, opening a grocery store, opening a coffee shop, or opening a food truck, you need to know who you’re targeting. This will help you determine their wants and needs while allowing you to ensure your restaurant marketing is done right.
2. Focus On Achieving Your Goals
When you write a restaurant business plan, you will establish goals. These goals are crucial for customer acquisition which is why you have to work towards achieving them.
This includes doing research on your target market, conducting surveys, and staying in touch with your customers. It’s possible to do this through different types of email marketing or a restaurant loyalty program.
3. Employ the Right Staff
When running a successful restaurant business, you need to have the right staff working for you. This includes wait staff, bar staff, servers, the restaurant manager, inventory control manager, and different types of chefs.
These employees should willingly devote their time and effort to help you work towards the company’s goals. It’s important for employees to be responsible, have good communication, and be versatile.
4. Understand CAC
Familiarize yourself with customer acquisition cost (CAC) and how to calculate it. This is crucial because your processes for acquiring customers are part of the financial investment in your business.
5. Generate Demand
For new businesses, generating demand is often a challenge. However, with proper brand awareness, generating demand gets easier. Customer acquisition and marketing strategies help.
Frequently Asked Questions About Customer Acquisition in the Restaurant Industry
Customer acquisition is an ongoing process, especially for businesses in the restaurant industry. What works for your restaurant may not be ideal for another restaurant or the food truck equivalent of your restaurant. To better understand restaurant customer acquisition, read the following commonly asked questions:
What Is the Purpose of Customer Acquisition?
The purpose of customer acquisition is to bring in new customers to increase your revenue by developing a place for your business within the industry. With more customers, your restaurant will be able to increase profits and income.
How Do Restaurants Gain Customers?
These are five ways your restaurant can gain customers:
- Promote the location of your restaurant on social media
- Create a unique menu, such as a seasonal menu, dessert menu, brunch menu, or prix fix menu
- Offer special items or promotions, such as happy hour
- Improve your customer service
- Maintain the ambiance of your restaurant
How Do Restaurants Engage With Customers?
Restaurants can engage with customers in the following ways: