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5 ways to measure how loyal your customers are

5 ways to measure how loyal your customers are

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Sure, your restaurant has satisfied guests. But how loyal are they? Will they recommend you to others? Will they stick with you through a new menu or a price hike? 

The mere presence of customers (even those who've stuck around long enough to make multiple visits) isn't enough, says Jeff Sauro, author of Customer Analytics For Dummies. Sauro says you need to be able to measure their loyalty so that you can use it to predict the health of your restaurant.

Sauro offers the following tips for measuring guest loyalty:

1. Find out if they're likely to visit again.
The first way to gauge guest loyalty is to compute the percentage of customers who are repurchasing, reusing or returning to a product or service. This data can be collected from past sales or from surveying customers about their past or future intent to visit your restaurant.

2. Gauge word-of-mouth promotion with the Net Promoter Score. 
The Net Promoter Score is a popular way of measuring customer loyalty through understanding word-of-mouth marketing. It is based on a single question: "How likely are you to recommend [XYZ restaurant] to a friend or colleague?"

NPS is calculated by a three-step process: Ask your customers how likely they are to recommend your restaurant to a friend or colleague; compute the proportions of promoters, passives and detractors; and compute NPS by subtracting the percentage of detractors from the percentage of promoters.

3. Be aware of bad profits. 
How do you think consumers feel about paying the check at a restaurant where they had terrible service and bad food? Nobody likes to pay for a subpar or overpriced product or for bad service, and yet, companies financially benefit from a customer's negative experiences. However, it's a short-term benefit. Those are bad profits, and they're a ticking time bomb. They lead to customer resentment and a decrease in customer loyalty, and they eventually impact profits negatively.

4. Find out what guests like most about your restaurant. 
One of the most effective ways to understand what drives customer loyalty is to conduct a key driver analysis. Key drivers are things like quality, value, utility and ease of use. You can identify the most popular or unpopular features or aspects of your product or service and have customers rate that experience as well.

5. Pinpoint your haters
While companies should strive for more promoters, it's often the customers who are least satisfied with their experience who have a much larger impact on referrals and the brand. Research supports that customers who are dissatisfied with a product or service experience are actually more likely to be vocal and tell more friends and colleagues about their bad experience than generally satisfied customers.

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