How do you attract more customers to your restaurant in the ever-evolving landscape of the restaurant industry? 2024 presents a unique set of challenges and opportunities.
As diners become more cautious about their spending, the traditional approach of aggressive price hikes is no longer sustainable. According to Deutsche Bank analyst Lauren Silberman, the era of relying on menu price increases to offset negative traffic is coming to an end.
In this blog post, we will explore three effective strategies that can help restaurant operators not only attract more customers but also foster positive traffic growth and boost comparable sales.
How Do You Attract More Customers to Your Restaurant in 2024? 3 Effective Strategies
- Loyalty Programs: Enhancing Value Without Sacrificing Margins
As the restaurant industry faces a price sensitivity challenge, deep discounts are no longer the golden ticket to winning over customers. Silberman suggests a shift in the composition of value offers, emphasizing strategic investments in loyalty programs. Rather than slashing prices, restaurants can leverage promotions such as free delivery or buy-one-get-one deals. This approach has gained traction in the Quick-Service Restaurant (QSR) sector, where franchisees are wary of steeper discounts.
For instance, casual chains like Olive Garden and Outback are moving away from unprofitable discounts. While initially successful in increasing traffic, Red Lobster’s $20 Ultimate Endless Shrimp promotion resulted in a significant operating loss. Adjustments, such as raising the promotion price to $25, can protect margins without alienating price-sensitive diners. Wendy’s and Domino’s have also adjusted their value offerings, showcasing the industry’s adaptability to changing consumer dynamics.
Moreover, rewards platforms emerge as powerful discount tools, offering personalized value and optimizing operations. Starbucks and Shake Shack are examples of brands successfully using rewards campaigns to draw traffic to specific dayparts, showcasing the potential of well-crafted loyalty programs.
The success of these endeavors points to the untapped potential of well-crafted loyalty programs as a dynamic and flexible means of engaging customers in the modern restaurant marketplace. As the industry continues to navigate the delicate balance between customer satisfaction and profitability, these innovative strategies are shaping the future of how restaurants approach value propositions in an ever-changing market.
- Efficiency Improvements: Unlocking Hidden Potential in Operations
As labor market stability improves and commodities are normalized, restaurants have the bandwidth to optimize their operational efficiency. Silberman emphasizes the impact of operational improvements on driving positive traffic. Smaller store models and automated equipment are investments made by chains in response to high turnover rates in recent years.
Chipotle’s story serves as a testament to the potential of operational improvements. Despite a dip in throughput in 2023 compared to 2014 and 2015, the brand’s ongoing efforts, including Chipotlane expansion and in-person employee training, have contributed to positive traffic. The lesson here is clear: meaningful improvements to operations translate directly to enhanced sales. McDonald’s timeless wisdom still holds—every second saved at the drive-thru can lead to a significant comp boost.
As labor market stability improves and commodities are normalized, restaurants have the bandwidth to optimize their operational efficiency. Silberman emphasizes the impact of operational improvements on driving positive traffic. Smaller store models and automated equipment are investments made by chains in response to high turnover rates in recent years.
Chipotle’s story serves as a testament to the potential of operational improvements. Despite a dip in throughput in 2023 compared to 2014 and 2015, the brand’s ongoing efforts, including Chipotlane expansion and in-person employee training, have contributed to positive traffic. The lesson here is clear: meaningful improvements to operations translate directly to enhanced sales. McDonald’s timeless wisdom still holds—every second saved at the drive-thru can lead to a significant comp boost.
- Menu Innovation: Creating Buzz and Expanding Occasions
While the trend in recent years has been menu simplification for faster fulfillment, strategic menu launches can be a powerful tool for attracting customers during slow dayparts. Silberman highlights the importance of impactful innovation in driving traffic, citing McDonald’s successful Grimace Shake campaign as an example.
Restaurant giants like Wendy’s and Pizza Hut are extending their hours to tap into late-night crowds. Moreover, innovative offerings like Pizza Hut’s handheld Melts cater to on-the-go diners, creating new occasions for customers to indulge. Taco Bell’s experimentation with chicken nuggets and the return of Nacho Fries showcase the potential for snacking occasions during non-peak hours.
In conclusion, 2024 demands a departure from the traditional playbook. While price hikes and deep discounts may have served well in the past, adapting to the changing dynamics requires a holistic approach. Loyalty programs, operational efficiency, and menu innovation are the pillars that will support restaurants in attracting customers, fostering positive traffic growth, and ultimately thriving in an ever-competitive industry. As we step into the future, it’s clear that the winners will be those who can embrace change and redefine the dining experience.
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