How to Implement a Customer Loyalty Program for your Restaurant
The value of a customer loyalty program is insurmountable to any restaurant establishment. These repeat customers yield a greater return on investment (ROI) than the targeting of new leads. Establishing these repeat guests is a must for your business to survive and thrive in the competitive market of the restaurant industry. One of the top performing strategies to do so is through restaurant customer loyalty programs.
Despite the effectiveness of customer loyalty programs, only about 30% of restaurants offer a customer loyalty program. Therefore implementing a customer reward or membership program will make you stand out amongst your competitors. Let’s take a deeper look into these customer loyalty programs, so you can either start one, or improve your existing program.
Does it Actually Work?
Implementing a restaurant reward program is shown to make your customers: 1) more likely to come back, and 2) more likely to buy. Studies show that customers are 81% more likely to return to your establishment when there is a reward involved.
According to the awesome infographic below, guests with a loyalty card are also 2 times more likely to buy something than a person without one. This is especially great if you’re pushing a new menu item or some other promotion.
Getting people to sign up is also not a challenge. After all, 80% said they’d sign up if their favorite restaurant had a loyalty program.
2 Main Types of Restaurant Customer Loyalty Programs
Although there are a wide variety of customer reward programs in the restaurant industry, there are two primary programs that thrive. Each for their own reasons.
Buy 10, Get One
This is your traditional Punch Card program where customers can “Buy 10, Get 1 for Free.” This type of program keeps things simple and easy for both you and your customers. It is especially beneficial for small, family-owned restaurant businesses.
The Punch Card program is most effective for restaurant establishments that have one particular menu item that they focus on. This includes cafes, sandwich shops and coffee shops. It is easy to have one single punch card that represents your menu. Such as, “Buy 10 Sandwiches, Get 1 Free.”
If it’s within your small marketing budget, I would highly recommend upgrading the traditional paper card to a digital punch card program, like Pirq. A digital program will provide you with customer data that will open your doors of opportunity for marketing. It’s also more convenient for your customers. A digital punch card means they won’t lose your punch card, because it’s always readily accessible in the palm of their hand (in their phones).
Memberships are points-based programs, where the reward system is ongoing. As your points build up, you can redeem your rewards. Though these programs require more setup time, they are shown to be highly effective for a wide variety of establishments.
Membership programs are effective for casual dining establishments, fine dining, chain restaurants and more. The reward structure is always customizable and tiered. This allows you to offer rewards for even the most complex of menus. You can customize your reward systems for your specific location, based on new menu items or promotions or special events. It also allows you to tailor the program to each individual customer. Rewards can be established based on menu preferences, frequency of visits and their special events, like birthdays and anniversaries.
These complex memberships are also often convenient for your customers. Everything is tracked automatically through the app or digital platform. This is also the case on the restaurant end. After the initial reward structure is set up, everything else is automated.
Perhaps the greatest benefit or running a membership reward program for your restaurant is the access to data. Membership reward programs provide you with insights to personalize your customer journey, gauge your marketing strategy and even improve your menu.
Things that the Best Restaurant Loyalty Programs Have in Common
When shopping around for and optimizing you restaurant’s customer loyalty program, keep the following in mind.
Everything marketing these days should be mobile friendly, but particularly for customer loyalty programs. Mobile programs allows your guest to experience immediate reward gratification, when they are still physically in your restaurant. Digital engagement also allow you to send mobile-based, marketing campaigns like SMS messages and push notifications through an app. Plus 73% of smartphone users say they are very likely to download a loyalty app. So you just might get a few more people to sign up for your customer loyalty program.
Customer Insights & Customer Database Analytics
Incentivizing your customers to sign up through a digital-powered program grows your customer loyalty. It also grows your customer database. The bigger your database, the bigger your marketing opportunity. With a large enough database, tracking customer data, you can send automated, personalized marketing campaigns. This data will also provide you, as a restaurant owner, with valuable insights to help you improve your sales.
Beyond the Discount
The best reward programs have more to offer far more than just discounts. Offering rewards like convince and special treatment is a huge incentive for guests to sign up for your program.
The combination of rewards + convenience + special treatment is like magic for customer loyalty. Help them feel like a member of your restaurant club by offering some of the following:
- Seating requests and preferences
- Anniversary or birthday “gifts”
- Reservation access and convenience (if you don’t take day-of reservations by phone, allow them to do so through your app. If you only have 3 reservations available per time slot, allow an additional 5 slots for members-only.)
- Takeout and delivery ordering
- Special access to events (send invites for special events to members before the rest of the public)
- Free branded swag (we aren’t talking what all your customers get, like a plastic cup with your logo, but something like a baseball hat or t-shirt)
Effortless Earning & Reward Redemption
According to the infographic, these are the top two things your customers want most from your customer reward program. 55% say that easy redemption of the rewards is important and 51% say the ease of earning points is a top desire.
Additionally, it might go without saying, but these rewards should be specific to your customer loyalty program members only. These rewards should not be available to everyone that walks through your door, or everyone with a coupon.
Other Ways to Build Loyalty Among Your Customers
As we emphasized in this article, personalization is huge when building a relationship with your customers. A great way to do this, that all successful companies around the world are utilizing, is through personalized online responses. This can be Youtube comments, social media tags, Yelp or Google reviews.
In the case of the restaurant industry, to build customer loyalty, this is achieved through personal responses to online reviews. As noted in “5 Yelp Tips for Restaurant Owners,” you shouldn’t just respond to bad reviews. Encourage repeat visits by responding to positive reviews. Their great visit means they will probably come back, but this sense of special treatment means they will keep coming back over and over again.
When they turn into regulars, make sure to reward this too. Acknowledge your regulars and give them special treatment. Make an effort to call them by name, remember where they like to sit and what they like to order. The digital tools from your customer loyalty program can help you identify these characteristics, and identify who your regulars are.
For more tips, personalized to the restaurant industry, check out our blog. New tips come out twice a week! They’re great for restaurant owners, restaurant suppliers and distributors, and hospitality marketers.
You can also find more infographics at Visualistan