Building Your Retail and Restaurant Loyalty Strategy

Aug 15, 2014

Building Your Retail and Restaurant Loyalty StrategyAs restaurants and retailers seek out creative ways to deepen engagement with new and existing customers, the performance of these brands’ loyalty programs is being more closely monitored than ever before. And whether the goal is to entice patrons to return to a restaurant or promote the opening of a new store, for loyalty programs to deliver on these performance goals, marketers need to move beyond simple behavior/reward models and strike a balance between strategy and the channels they engage customers on. Finding this balance will require a deeper understanding of what customers are looking for, as well as a broader knowledge of the loyalty landscape in the restaurant and retail space.

Research has found that the top three external marketing priorities of Chief Marketing Officers last year were customer acquisition, giving customers a personal experience and customer engagement. Today’s CMOs are also responsible for revenue growth, adding another “bottom-line” priority to their growing list. CMOs are also having to work more closely with CIOs in order to ensure their loyalty programs are seamlessly integrated into other functions of the organization.

In other words, loyalty programs are being held to a higher standard, with technology innovations and strategy being set as top priorities. And as CMOs continue to streamline their loyalty programs in the retail and restaurant industries, there are four themes they should focus on to increase loyalty growth: personalization, omnichannel loyalty, mobile integration and integrated multi-tender loyalty.

Here is a deeper look at some of the key loyalty program trends and strategies to consider this year:


While personalizing the loyalty experience ultimately increases the chance of driving a positive customer response to a campaign or promotional message, restaurants and retailers need to make sure they use personalization selectively. Marketers need be careful to monitor customer sentiment- especially for emerging channels like mobile and social media. Although the messaging and incentives may be personalized, excessive use of this approach can overwhelm consumers, and lose the “personal” experience that the message was meant to communicate in the first place.

For example, CMOs have realized that personalization does not need to be as far reaching as planned, but only focus on reaching consumers in a way they will actually respond to. Think about it. If marketers know a particular consumer responds best to mobile interaction, it would be pointless to personalize their marketing through direct mailings just because a similar group of consumers may have, at one point, responded positively in that manner. The challenge, therefore, is to find the perfect balance between enticing customers with a personalized message through their preferred channel while refraining from becoming too invasive.

Omnichannel Loyalty

Personalization goes hand-in-hand with omnichannel loyalty. With advancements in technology powering the way brands connect with their customers, the expectations of those shoppers and diners have also become higher as they demand relevant information – on relevant channels. Knowing this, and recognizing trends in how consumers operate, restaurants and retailers agree that omnichannel loyalty gives them a way to reach consumers in a way that will really resonate.

Omnichannel loyalty can help to drive:

  • More Connections with Consumers: Today more than ever, customer shopping and dining has become a tech-driven experience. Research, recommendations, reviews and brand interactions can happen digitally, before consumers even enter a store, and ultimately affect purchasing decisions. Modern consumers are technologically savvy shoppers and diners – due, in part, to the prevalence of smartphones, social media, gamification, GPS technology and big data. 
  • Real-Time Program Feedback: Through omnichannel marketing, restaurant and retailers can capture data in real-time and use this information to entice individual customers through communication channels they prefer. By doing so, loyalty program organizers can tailor messaging to impact consumers and increase their chances of gaining a response.
  • Smarter Methods for Smarter Customer Retention: Omnichannel loyalty provides customer insights that allows marketers to leverage real-time data and in turn build custom rewards programs that are both timely and relevant.

Mobile Integration

Mobile continues to be an integral part of restaurant and retail loyalty programs and marketing campaigns – and if the rate of customer adoption is any indication, the importance of mobile strategy shows no sign of diminishing anytime soon. For loyalty programs in the restaurant and retail space, mobile technology is essential to maintaining an engaged and active customer base, giving CMOs one of the most direct channels in which to interact with their customers and gain real-time insights.

In recent years, the prevalence of mobile devices has paved the way for mobile wallets. Allowing customers to make secure in store payments, without needing a credit or debit card, mobile wallets are making consumer purchasing easier and more convenient than ever before. For loyalty programs, this puts all of a customer’s information at their fingertips – from rewards statistics, payment information and credit card data – using nothing more than the consumer’s personal smartphone. According to recent studies, 43% of all smartphone users, nearly 113 million consumers, will use mobile wallets by 2017. If they don’t fit already, current loyalty programs are being formatted to be able to integrate with mobile payment platforms for future customers.

Due to the rise of interactive mobile technology, gamification has become a popular way for businesses to keep consumers actively engaged and entertained. Giving customers the opportunity to earn points and redeem rewards for purchases or free items, gamification is all about making the most of modern technology. It adds a level of competitiveness to the loyalty experience and by embedding games into the loyalty program, gamification creates a loyalty environment where members are challenged, incentivized and engaged in a way that brings a level of fun and entertainment to a program.

Integrated Multi-Tender Loyalty (IMTL)

As today’s CMOs are increasingly more responsible for the revenues of a brand, integrated multi-tender loyalty (IMTL) presents an ideal opportunity to bring together a retailer’s credit card and loyalty program; which oftentimes existed in parallels or competed with each other.

Historically, loyalty programs and retail credit programs were executed as separate customer-facing programs, with little to no integration. Many retailers struggled with a lack of unified loyalty branding and seamless integration between multi-tender and credit programs, often resulting in confusion among associates and customers…and lower engagement levels. IMTL brings an integrated approach that delivers one seamless experience to engage all customers – regardless if it’s through credit.

Furthermore, it provides retailers with a new way of getting to know their customers better, building stronger and profitable long-term relationships by combining multiple CRM, credit and loyalty program platforms into a single integrated data warehouse, this means that decisions on all tenders (payment types) are reflected in one place.

With customization and personalization being critical to the success of today’s loyalty programs, ITML’s approach provides retailers with more information about the wants and needs of all customers. This creates value for members by using data to deliver personalized offers that create the right emotional connection, leading to more opportunities for those customers to earn and redeem in an omnichannel manner. 

With a renewed focus on ROI and revenues, CMOs who capitalize on these trends will be the difference maker for a high preforming loyalty program in 2014. There are more consumers enrolling in loyalty programs today than ever before and the retail sector owns 39% of those memberships. CMOs that embrace the advancements in personalization, omnichannel loyalty, mobile integration and integrated multi-tender loyalty are ensuring a deeper level of engagement and an enriched member experience for years to come.