Keep the focus on maintaining your existing customers

03-May-2012 - Last updated on 04-May-2012 at 08:36 GMT

Related tags Marketing

Davison: "If customers love your pub, they will recommend you, and new customers will follow"

With many publicans, there is too much focus on luring new customers, and not enough on retaining existing ones. Many pubs’ marketing strategy hinges on tempting new punters, and often means investing in un-targeted advertising, with no real way of determining what return they get on the investment.

A long-term marketing approach is what pubs need, focusing on the long-term relationships the business has with each customer. In many other trades the focus has been on ‘customer lifetime value’ (how much it is worth to a business to keep existing punters).

In marketing/profit terms, it is usually more profitable to have a customer return than to spend money acquiring a new one.

Having a long-term relationship with customers is as important in the pub trade as it is in any other — if not more so — because where a customer’s decision to continue using a company is based solely on the quality of the product, people often judge a pub on the overall experience — a more personal relationship.

If, rather than spending money on attracting new customers, hosts focused on service, and making existing customers feel valued, not only would their marketing budget be more targeted, and return more profit on investment, but many pubs could see a rise in special-event bookings.

Loyal customers who feel valued are more likely to use the pub for special occasions. It is these that drive profit.

It is a wonder publicans have not caught on to the importance of ‘customer lifetime value’ as we are in an industry where upselling is the key to profit. Therefore, after a customer has visited once, and had a positive experience, they are likely to return. The value of each customer coming in is therefore far higher than the value of one meal and a few drinks.

Many pubs still refer to ‘regulars’ as locals who pop in for a few drinks every night, but we should try to create the same loyalty in our
food trade.

Focusing on ‘customer lifetime value’, or existing customers, makes your marketing highly targeted, as they have already displayed a willingness to spend money on your product. If the experience is positively reinforced, they are more likely to do so again than Joe Bloggs who hasn’t heard of you.

My message to pubs is simple: ensure existing customers have the best possible experience in your pub, and don’t spend so much time
and money chasing new customers.

If your customers love your pub, they will recommend you, and new customers will follow.