Maintaining Customer Loyalty While Increasing Restaurant Prices: 6 Effective Strategies

Higher prices should be a last resort, but it’s doable when necessary.

The passion it takes to open a restaurant isn’t enough to keep it going. Unfortunately, life is much more complicated than that.

The last thing that any restaurateur wants to do after curating a loyal base of guests is to run them out with higher prices, but when you’re struggling to keep the doors open, that could be your final option.

Inability to manage prices accordingly is just one of the many reasons that 80 percent of restaurants fail in the first five years of operation. In fact, the National Restaurant Association says that food costs are a problem for 92 percent of restaurant operators. You aren’t alone, and while 80 percent is a daunting number, it leaves a lot of room for hope too.

Don’t let inadequate pricing bring you down. Keep your customers and have the best of both worlds. Just know that it can’t happen overnight. Raising prices requires a perfectly timed rollout and a long-term plan. If you don’t time your price adjustments just right, you risk losing the customers you’ve already worked so hard to gain.

Not only do you have to understand the timing of the markups, you need to know how to market them. Redoing the numbers and crossing your fingers that your guests won’t notice isn’t going to help anyone.

1. Vary your increases

Avoid significantly raising the price of just one individual dish, your guests will notice and probably be quite alarmed at the difference. Instead, go for a more subtle price change across the entire menu, maybe around 1.5 percent. Adding something as drastic as a 15 percent increase on a single dish won’t be taken lightly by customers.

2. Take it slow

Restauranteurs can get away with raising their prices a couple times a year if using the small bumps mentioned in the previous step – making a more thoughtful, long-term pricing strategy much more effective than a single, large jump. Analyze if smaller and more frequent price adjustments rather than infrequent and dramatic changes will work better for you in order to maintain customer satisfaction and profitability.

3. Do your best to justify the increase

You know that raising your prices is the only way to stay afloat, however that’s not enough keep every customer in the door. Make sure guests see that their experience at your restaurant is improving as your prices go up.

See if you can replace your current ingredients with something locally grown or organic, if that ends up being an affordable option for you as well. Take extra care to train you staff to be warm, welcoming, and extra friendly. Ensure top-of-the-line cleanliness or make small decor upgrades. You can also create seasonal menu specials to add extra draw and exclusivity.

4. Show appreciation for loyalty

New customers probably won’t realize if your prices are higher than they were last month, but your existing guests may. Instead of pushing them away, keep them lured in with a loyalty program.

Make your loyalty program available to everyone, but give bonus points to customers who have been in your system for the last year or so. Let’s say that you serve ice cream, and your new program details that every guest gets a free scoop after 10 purchases. If a familiar guest comes in or inquires about the new program, look them up in your POS system and give them the points they’ve earned from past purchases.

5. Market effectively

The way that things are worded can make a world of a difference. If you aren’t able to add shiny new features to your products, use your menu to make it sound like you have. For example:

• Spaghetti and Meatballs
• Three meatballs served with classic sauce over pasta

VS.

• Gourmet Sicilian Meatball with Artisanal Spaghetti
• Handcrafted Sicilian meatballs paired with a rich, savory tomato sauce.

It might not change a single instruction of what you do in the kitchen, still, it can be much more enchanting for your diners.

6. Communicate effectively

When discussing pricing issues with customers, avoid using the words “increased” or “raised.” Instead opt for “changed.” It’s a small change, but the connotation is different enough to assist in easing tensions. It may be hard in certain interactions, however, you should also avoid apologizing for your increases. An apology insinuates that you were wrong, and you know that is not the case. At most, apologize for their frustration or inconvenience.