The Interconnected Dynamics of Urbanization and Customer Loyalty


Hatched by Glasp

Sep 28, 2023

4 min read


The Interconnected Dynamics of Urbanization and Customer Loyalty


In this article, we will explore the complex relationship between urbanization and customer loyalty by examining two seemingly unrelated topics: San Francisco's housing crisis and the psychology behind restaurant regulars. While these may appear as distinct issues, they share common underlying factors that contribute to their respective outcomes. By understanding these connections, we can gain valuable insights into the challenges faced by cities and businesses alike, and uncover actionable advice to address these issues effectively.

The Urbanization Paradox:

San Francisco's housing crisis is a result of a multitude of factors, including height limits, rent control, and a challenging permitting process. These regulations were born out of tenant, environmental, and preservationist movements that have shaped the city's landscape over decades. Simultaneously, shifts in societal norms, such as delayed marriage and longer lifespans, have led to a redistribution of population. Young adults and affluent retirees are gravitating towards urban cores, while immigrants and the less affluent are moving out. This demographic shift is a reflection of changing employment patterns, with lifetime job security giving way to a network of weak ties between companies.

The Rise of Social Density:

The advent of social networking and the subsequent wave of consumer web and mobile products have further fueled the urbanization trend. Platforms like Facebook, Snapchat, Foursquare, and Twitter gained traction by leveraging critical mass in specific geographic areas. This preference for social density has transformed both San Francisco's culture and the technology industry. However, this gentrification wave predates the dot-com era, with San Francisco's progressivism primarily focused on protecting the city's environment, heritage, neighborhoods, diversity, and overall quality of life.

Housing Challenges and Economic Implications:

One significant consequence of San Francisco's housing crisis is the insufficient supply of affordable housing. The city has only added an average of 1,500 units per year for the past two decades, despite a population increase of 32,000 people from 2010 to 2013 alone. Unlike other major U.S. cities, building permits in San Francisco are discretionary rather than as-of-right. Consequently, the market produces housing units predominantly for individuals with above-moderate incomes, exacerbating the affordability issue. A more elastic housing supply in the Bay Area could not only make living affordable but also stimulate economic growth by enabling a larger portion of the population to find jobs and contribute to the local economy.

The Psychology of Restaurant Regulars:

Moving from the macro-level urbanization issues to the micro-level dynamics of customer loyalty, we delve into the psychology behind why people become restaurant regulars. Community, routine, and personalization are the key factors that drive individuals to develop a strong affinity for a particular dining establishment. A study by SevenRooms reveals that 51% of Americans believe that being remembered by their waiter would enhance their dining experience, highlighting the importance of personalized service.

Understanding Different Types of Regulars:

Restaurant regulars can be categorized into two main groups: everyday regulars and special occasion patrons. Everyday regulars value routine and seek comfort in familiarity. They frequent the same spot, order the same drink, and expect their dish to be prepared exactly to their liking. On the other hand, special occasion patrons visit the restaurant less frequently but are willing to spend more and often bring along friends to celebrate birthdays or anniversaries.

Building Customer Loyalty:

To cultivate and maintain a loyal customer base, restaurants must create an environment where patrons feel like an integral part of the community. This sense of belonging fosters a strong emotional connection, making customers more likely to return. Additionally, personalized service, such as remembering individual preferences, goes a long way in enhancing the overall dining experience. By improving customer loyalty by just 5%, restaurants can see a significant increase in profits ranging from 75% to 95%.

Actionable Advice for Urban Development and Customer Loyalty:

  • 1. For urban planners and policymakers: Focus on creating a more elastic housing supply to address affordability issues and stimulate economic growth. Streamline the permitting process to facilitate the construction of new housing units, particularly for lower-income individuals.
  • 2. For restaurant owners and managers: Cultivate a sense of community within your establishment by creating a welcoming atmosphere and fostering personal connections with customers. Train staff to remember individual preferences and provide personalized service to enhance the dining experience.
  • 3. For individuals: Support local businesses and establishments to contribute to the vibrancy and diversity of your community. Become a regular at your favorite restaurant and develop a sense of belonging, while also being open to exploring new dining experiences.


The intertwined nature of urbanization and customer loyalty demonstrates the broader impact of societal and economic forces on both cities and businesses. By recognizing the common threads that connect these seemingly unrelated topics, we can devise more holistic approaches to address their challenges. Through a combination of policy reforms, community-building efforts, and personalized service, we can create cities and businesses that thrive in an ever-changing world.

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