the cost of losing a customer in a restaurant

The cost of losing a customer in your restaurant

What does it mean to lose a customer?

Some customers will return after a bad experience, and give the restaurant another chance. If the experience is bad enough, the customer will decide they will never return.

What can cause a bad experience?

A bad experience with, the Server, the food, the ambience, the owner and even other guests. The restaurant can control all of those variables except for the guests.

When a patron or guest, decides they will never return, what is the potential lost revenue.

If your restaurant is filled 50% of the time with regulars, and a regular comes in once a month, the cost of losing a regular would be losing the revenue of 6 visits times $30 per year, which equates to $180 per year. Factor into that equation, other people that guest may bring with them. Add in special events and alcohol , and the annual potential lost revenue may be closer to $500.

Beyond the math, and the potential lost revenue, is there a great variable?

Take the simple lost revenue, and factor that by the number of people that the guest might interact with over the course of a year, and provide a negative review.

How about online reviews?

If that guest is inclined to go out of their way, and spend the time to provide negative feedback online. This going to hurt the most. This type of guest can do the most damage, and reach the most people. Take that $500 and double it, as a guesstimate. One bad experience can cost 1K in lost revenue a year, 12 bad experiences 12K. This math is making broad assumptions, but even if it 25% accurate, it is still a lot of money.

What can be done?

The best thing is to respond to the negative reviews, and apologize and offer them a free dinner the next time the come in. Tell them to ask for you in person. Impress the rest of the viewers with your concern.

Why not track it before it gets that bad?

It takes tack, to find and address an unhappy customer in your restaurant. Most customers will say that everything is ok, when it is not. This is because they don't want to look like they are the problem or cause a scene. The problem starts with the questions the Server's are asking the guests. Typically they ask "How is the food tasting?" or "Is everything ok?".

The servers should be asking questions that lead to honest answers. Have the Server wait by the table, until the conversation ends then crouch down and ask the guests, "Does the food meet their expectations, and if the overall service meets their expectations." Don't make it personal. Guests are afraid to be negative incase they often the Server.

Try having the manager visit every table with a notepad and pen, and ask "if you have 30 seconds, can I ask you 4 questions which you can answer anonymously about your experience tonight. Ask:

- "Were you greeted right away by your server when you sat down? "
- "On an anonymous scale between 1 to 10, how well were you served?"
- "Was there a portion of the dinner that you didn't enjoy?"
- "What would you change about the restaurant or service?"

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