What is Customer Churn?
Customer churn or customer attrition is the percentage of customers that stopped using your service or going to your locations during a specific period. Marketers use this data to create marketing campaigns to save at-risk customers. Operators utilize this data to optimize business operations.
For companies that rely on loyal customers, such as restaurants or retail stores, a high customer churn rate can be devastating for businesses on many levels.
In the restaurant industry, which is heavily dependent upon customer loyalty, reducing customer churn rates is an absolute necessity.
Competition in the industry continues to grow at a record-breaking pace from new concepts, technology, and delivery.
Consumers have more choices than ever before when it comes to where they choose to dine.
So, if you want to be successful in today’s competitive environment, you need a way to identify churning customers and get them back through your doors.
Why do Customers Churn?
There are many reasons restaurant customers might have to churn.
Often it is because of poor customer service.
Other reasons may be that your restaurant food quality and choices are below par, or are overpriced. Or perhaps the level of cleanliness in your restaurant could be improved.
Whatever the reason, it will typically come down to one general explanation.
They did not have excellent customer experience, and they do not have the incentive to return.
Consequently, they decided that one of your competitors is better worth their time and money.
Why Is Reducing Churn So Important?
Retaining loyal customers is much less expensive than acquiring new ones.
According to the Harvard Business Review, acquiring a new customer can be anywhere from 5-25 times more expensive than retaining a current one.
Add to that the time between losing one customer and gaining another, and you can quickly see that an out-of-control churn rate can be devastating for any business.
Worse, if you do not recognize it, it will only continue to climb.
Unfortunately, many restaurateurs do not know what their churn rate is, or which way it is trending.
Likewise, they do not have the technology to monitor this vital business metric. Customer attrition will occur naturally in business.
But when churn rates begin to climb with no intervention, it can quickly derail any momentum your business has generated.
Loyal customers are more valuable to your business; the longer they remain faithful, the higher your customer lifetime values, and the lower you can maintain your customer acquisition costs.
How to Measure Customer Churn Rates
Unless you have a photographic memory and you see every single customer whoever walks into your place of business, you’re going to need an alternative way to measure customer churn.
For eCommerce businesses and subscription-based companies, measuring customer churn is as easy as plugging in a number and doing the necessary mathematical calculations.
Restaurants, on the other hand, cannot accurately identify individual customers.
Add in passers-by and out-of-towners, and creating loyal customers becomes next to impossible.
Without the ability to identify the visits of these individual customers, any calculations made will be skeptical, at best.
Therefore, churn calculations become extremely difficult to tally accurately for restaurants and other brick-and-mortar businesses.
That is unless you are using the Bloom Intelligence WiFi marketing and analytics platform.
How Bloom Intelligence Identifies Churning Customers
Every WiFi-enabled cell phone or device is continuously sending out a signal looking for WiFi access points.
This signal contains a unique code that the restaurant’s WiFi access point sensors will log into its database.
From that point on, Bloom will know when that device comes into range.
This identification is how we calculate individual customers and the frequency of customers.
The customer doesn’t have to log into the WiFi; they just have to be within the range of guest WiFi.
Among other important customer key performance indicators provided by Bloom, you will now have a much more accurate understanding of the number of customers and the frequency of your customers to your locations.
Bloom automatically monitors your customer foot traffic or individualized presence analytics for you, and how that behavior changes over time.
We then analyze and clean all this raw data to provide you an easy-to-see graphical representation of customer behavior.
One of the most important indicators is how your churn rate is trending by month, quarter, or year.
These trends will allow you to identify at-risk customers quickly, and create an automated marketing strategy – campaigns based upon different scenarios to save your at-risk customers.
Bloom’s intelligent algorithm sets monitor each customer’s frequency distribution, individually and as a whole, to understand your customer attrition rate.
By analyzing customer frequency, the platform can accurately predict when a customer should be returning for another visit.
If the customer does not return by that date, they are “At-Risk” of churning.
You can then take steps through Bloom’s automated marketing suite to persuade the at-risk customers to revisit your location(s).
Using WiFi Analytics to Reduce Customer Attrition
Using WiFi analytics to monitor and report on your customer churn rate, you’ll be saving money compared to hiring a third-party to do this for you.
Plus, with Bloom, it is entirely passive. You don’t have to lift a finger to see your customer churn rate, which receives real-time updates.
Plus, you’ll be collecting data from a considerable sample size of your customer base, giving you the ability to spot trends quickly.
If you notice an immediate spike in the metric or a trend up or down, it will be much easier to identify the possible reason for the change.
Then, you can take steps to stop negative movement or reinforce the things that may be driving it in a positive direction.
Ways to Stop Customer Churn at Restaurants
As we mentioned before, customer attrition boils down to guests having negative customer experiences. If you notice an increase in churn, you’ll need to implement customer service training and operational procedure adjustments.
However, even if you have the cleanest restaurant with the most cordial staff and the most reasonable prices in town, it won’t help much if your churned customers don’t know you’ve made efforts to improve.
The Bloom Intelligence automated marketing suite of tools can genuinely help your business grow.
Bloom allows you to set up an automated, or triggered marketing campaign.
All you need to do is create a single message to send your churned customers or even customers who gave you a bad rating, ideally containing an incentive to return, such as a free drink or appetizer.
When Bloom identifies a customer who is likely churning, the system will immediately send that message to the churned customer.
Clients all over the country are running this type of campaign using the Bloom platform. And they are seeing impressive results leading to strong business growth.
For instance, a Florida-based restaurant chain began running an at-risk campaign several months ago.
They have seen a whopping 38% of these customers return to their restaurants.
Additionally, their customer attrition rate has dropped every month since executing the campaign.
To see the details, download the report here. As you can see, this is just one of the countless campaigns that Bloom’s intelligent marketing suite can execute.
WiFi Marketing FAQs
What is WiFi Marketing?
WiFi marketing is a marketing technique that uses guest WiFi to collect & clean customer data such as names, emails, phone numbers, customer behavior, and demographics. This data is used to personalize marketing campaigns to increase customer loyalty, build online reviews, and save at risk customers. Also, the performance of every campaign can be tracked down to the tangible ROI of a customer walking back in your door.
Why are WiFi Analytics Important for Effective WiFi Marketing?
WiFi Analytics is the process of collecting and analyzing anonymous data from WiFi-enabled devices through WiFi access points. This provides key performance indicators (KPIs) such as dwell times, frequency, and other advanced location analytics for physical locations. Once a customer opts into the Guest WiFi landing page their individual presence analytics are associated to the customers profile. This process enables WiFi marketing platforms to track the performance of all campaigns sent to customers down to someone walking back into their door.
How Are Customer Profiles Built with Smart WiFi Marketing?
A customer profile is a description of a business’ customers typically stored in a company’s customer relationship management software (CRM). It includes demographics, behavior data, zip codes, birthdays and customer contact information, such as email address or phone number. Enterprise WiFi marketing solutions automatically build customer profiles for physical locations by combining customer data from multiple different sources such as your Guest WiFi landing page.
What is Remarketing with WiFi?
WiFi Remarketing allows business owners and marketers to send targeted advertising and behavior-driven promotions to people, via online advertising and email marketing, to customers who have logged into your guest WiFi.