Research Report: Customer Retention in the Restaurant Industry

This research report investigates the factors influencing customer retention within the restaurant industry. The study examines the relationships between food quality, the restaurant booking system, loyalty programs, and service quality and their impact on customer retention. The report highlights the significance of food quality, emphasizing that customers are willing to pay more for better quality and additional amenities. It also explores the importance of an efficient booking system for customer convenience, particularly in the context of technological advancements. Furthermore, the report analyzes the role of loyalty programs in encouraging repeat business and customer affinity. Finally, the study underscores the importance of excellent customer service, including employee behavior, in ensuring customer satisfaction and long-term retention. The findings suggest that restaurants must prioritize these aspects to cultivate customer loyalty and maintain a competitive edge in the market. The report references several academic sources to support its claims.

Running head: CUSTOMER CHOICE
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Literature Review
Name of the Student:
Name of the Organization:
Author’s Note:

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Title of the research Report: RESEARCH REPORT ON THE FACTORS
INFLUENCING CUSTOMER RETENTION IN THE RESTAURANT INDUSTRY
In the modern day scenario, one of the most important aspects of the society is the
large scale growth of shopping malls. However, this must be noted that the shopping malls
have attracted the attention of a large number of customers within a very short time periods.
There are however many different factors that are responsible for the popularity of the
shopping malls. However there many different aspects like customer loyalty programs, the
equality in the services delivered, the booking system that is being used in the malls, the
quality of the food being served and many other such things.
Objective 1: To investigate the relationship between the importance of food quality for
choosing a restaurant and customer retention.
-Is there any significant relationship between food quality and customer retention?
One of the very important aspects that determine the customer’s selection of
restaurant is the standard of food served by them (Yan et al 2015). While selecting any
particular restaurant the customers are usually influenced by some specific aspects like that of
the menu, the price of food, the atmosphere, and the convenience factors. However this must
be kept in mind that the customers are often governed by their demographic factors as well.
The teenagers mainly want to visit restaurants that do a lot of experiments in serving new
kinds of food whereas the people between the age group of fifty and more usually tend to
follow a common and traditional menu in the same preferred restaurant. Customers on the
present day scenario are ready to pay high amount of price provided that they are getting
proper quality of food and also some additional facilities that is some added advantages.
Restaurants therefore try to keep the price of the food know and try to maintain high quality

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so that they can retain bulk amount of customers (Yan et al 2015). Restaurants have really
changed the modern lifestyle in a major way. It has helped people a great deal and has also
made them very much alert on the other hand. The modern day customers are very much
health conscious as well. They know that eating too much of outside food might render them
unhealthy. Hence, they are looking for good quality, fresh and healthy food from the
restaurants. However there are also other factors like the taste of cuisines. The restaurant
ambience, services provides that influences the customer retention. Hence, the restaurants
must aim at maintain the proper quality of food keeping in mind the demographic patterns,
the customer attitudes and most importantly the health of the customers.
Objective 2: To investigate the relationship between the importance of restaurant
booking system for choosing a restaurant and customer retention.
-Is there any significant relationship between a restaurant’s booking system and
customer retention?
The reservation or the booking system is a very big factor that influencers the
customer‘s choice of restaurants. This is because of the fact that customers nowadays want
easy and quick services (Boo 2017). Technological innovations have made it possible for the
restaurants to use many modern methods of booking like mobile app, web pages, online
booking. The customers are also very much comfortable in using the electronic and
digitalized booking system so that they can avoid standing in long queues or holding on to the
telephone lines for long in order to get their booking. This is because of the fact that the
customers nowadays are looking for several additional services. The customers are of the
opinion that getting their food and their tables booked through electronic digital systems are
much better than booking through the old paper based offline booking system. Bookings

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through mobile apps, websites have changed the booking system a great deal (Al-Tit 2015).
So, naturally the customers will be inclined towards restaurants providing the, a quick and
smooth booking system.
Objective 3: To investigate the relationship between the importance of loyalty programs
for choosing a restaurant and customer retention.
-Is there any significant relationship between loyalty programs and customer retention?
One of the important aspects that the customers are looking for in different restaurants
id the loyalty program offered by them, In other words, the modern-day customers are very
much eager about getting some additional benefits from the restaurants apart from the good
quality food. Hence, it is an effort being undertaken by the restaurants to retain their
customers by offering them some or the other benefits or rewards (Yan et al 2015). This can
be done by the restaurants by offering some extra discounts or some additional free services
to their customers. These benefits include some special rebates or some free delivery
services. The restaurants are developing these loyalty programs on a long term basis as it is
the best possible means of retaining the customers. The customers will develop a kind of
loyalty or an affinity towards their favourite restaurants if they get something more than the
regular day to day things.
Objective 4: To investigate the relationship between the importance of service quality
for choosing a restaurant and customer retention.
-Is there any significant relationship between efficient customer relationship and
customer retention?

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In order to retain the customers and promote the repeat customer purchasing, it is the
duty of the restaurants to satisfy the customers at every single step (Han and Hyun 2015).
This can be best done by providing proper customer service. This is because if the customers
face some very unpleasant and poor services at a restaurant, they will obviously not like to
return back to the same place again. This will easily give them the option of switching over to
other alterative options. Poor customer service like delay in serving the food, or unfriendly
ambience of the restaurant, unavailability of tables and many other such things usually causes
customer dissatisfaction.
-Is there any significant relationship between efficient customer relationship and
customer retention?
Another important aspect that influences the customer retention is the behaviour of the
employees or the restaurant staffs. The staffs must be properly trained in customer handling.
They must always greet the customers with smile and appear very polite and friendly to the
customers (Yan et al 2015). This is one of the most important aspects of the hospitality
industry. The customers will be dissatisfied if they are behaved rudely by the restaurant staffs
and this will hamper the customer retention.

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References
Al-Tit, A.A., 2015. The effect of service and food quality on customer satisfaction and hence
customer retention. Asian Social Science, 11(23), p.129.
Boo, H.V., 2017. Service Environment of Restaurants: Findings from the youth
customers. Journal of ASIAN behavioural studies, 2(2), pp.67-77.
Han, H. and Hyun, S.S., 2015. Customer retention in the medical tourism industry: Impact of
quality, satisfaction, trust, and price reasonableness. Tourism Management, 46, pp.20-29.
Yan, X., Wang, J. and Chau, M., 2015. Customer revisit intention to restaurants: Evidence
from online reviews. Information Systems Frontiers, 17(3), pp.645-657.