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How to Drive Sales When New Customers Are Not Enough

6 minute read

Restaurant marketers: you’re working hard to bring new diners in the door, but are those efforts leading to increased net sales?

If you answered, “I’m not sure,” you’re not alone. Many restaurants are successfully driving in new guests but are unaware of how quickly their existing base is “leaking” customers that don’t return. This “Leaky Bucket” effect undermines the net impact of marketers’ successful acquisition campaigns.   

By analyzing purchase data from our bank partners, Cardlytics identified key spend trends to help marketers quickly spot and fix a leaky bucket, and ultimately, grow sales.

The Leaky Bucket effect slows growth across restaurant categories

Restaurant brands are bringing in many new customers, but unfortunately, their “bucket” of current customers is leaking as fast, or even faster, than they can fill it. This is a natural industry phenomenon in which customers want choice and variety, and have hundreds of considerations in their immediate area. In the last 12 months, top restaurant brands in key categories faced major headwinds to their own growth:

  • QSR: 50% of guests were new, but 53% lapsed and didn’t return to the same restaurant
  • Casual Dining: 75% of guests were new, but 83% lapsed and didn’t return
  • Upscale Dining: 55% of guests were new, but 57% lapsed and didn’t return

Quickly re-engage customers after their first purchase

The easiest way for restaurants to stop a leaky bucket is to drive a repeat purchase from newly acquired customers. And the sooner the better. Across top restaurants, 50% of customers make a second purchase at the same restaurant within 45 days after their first purchase. After that point, the risk of a customer lapsing significantly increases. Marketers should engage their new customers quickly and consistently to keep them coming back throughout the year.  

Use purchase insights to identify at-risk customers

Lapsed or “about-to-lapse” customers are very difficult to identify and influence. These customers haven’t been to the restaurant in some time, and mass media is not an efficient tool to reach them. At Cardlytics, we can identify and retain at-risk customers and bring back lapsed customers. Through our purchase insights, we not only understand if consumers have made a purchase at your restaurant, we can actually target consumers based on their purchase patterns across your category—driving them to your restaurant for their next dining occasion.

Cardlytics’ pay-for-performance model only charges a fee if that customer makes an actual post-advertising purchase. Forget about paying for likes, shares, impressions, or clicks…  only pay for actual purchases. Let’s work together now to build loyalty with your at-risk customers and drive overall sales.

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