For restaurants looking to maximize customer engagement and improve retention rates, the term ‘dine and dash’ might come to mind. While the expression means to dine at a restaurant and dash without paying, it can refer to another challenge facing restaurants. It’s what we call the “loyalty dine and dash” – when customers leave a restaurant without enjoying the benefits of its loyalty program.
While food quality, good service, reasonable prices and cleanliness nearly always rank as the top 4 customer expectations, there are a host of other categories that can be tied to restaurant loyalty and make for a more engaging experience.
According to the Nation’s Restaurant News 2013 Consumer Picks Survey:
- The so-called “X-Factor” for casual-dining restaurants – or what ranked top in patrons’ minds beyond the four staple groupings – was “atmosphere,” voted by 65% of survey respondents as next most important on their restaurant appraisal list.
- “Craveability” topped the rankings for limited-service restaurants (at 54%) and menu variety was most important at family-dining restaurants at 59%.
The survey results underscore the need for all types of restaurants to think outside of the typical loyalty box. Customer rewards programs can’t just be about discounted dinners or extended Happy Hours. Loyalty rewards must entice patrons in genuine, experience-driven ways that feed into the coveted best “atmosphere” category that keeps them coming back for seconds – and thirds!
Finding Your Restaurant Loyalty Program’s “Craveability” Factor
The same thought process holds true for turning “craveability” and even “menu variety” into loyalty-related motivators. In these contexts, social media would be very effective in promoting experience-driven engagement. Restaurants could create enhanced experiences promoting exclusivity – an emotional driver.
Or, imagine a smartphone or tablet-based menu updated in real time as restaurant goers receive an email or SMS message alerting them that their favorite dessert has become the most requested by popular vote. And the first table to order it earns points toward restaurant-related merchandise like t-shirts and mugs, or the opportunity to attend discounted entertainment like concerts and sporting events. Florida-based Duffy’s Sports Grill is a great example of that kind of collective engagement.
Even though last year’s Restaurant Industry Tracking Survey found that during 2012 customer retention rates were higher in all 29 restaurants reviewed, no restaurant achieved a retention rate above 78% with most ranging between 40%-49%.
What that illustrates is that restaurants are missing out on a significant customer engagement opportunity as nearly half of all diners fall into the “come once and be done” category.
Why You Need To Reward Regularity
In this category, there is no brand loyalty, no repeat business and certainly no chance that a “grab and go” customer will become a brand ambassador. Under the most critical view, that type of restaurant service is of little value as restaurants with high customer churn will always struggle. In other words, restaurants need their regulars.
That’s why well-structured loyalty programs are so important for casual-dining restaurants. They’re a critical customer engagement tool – beyond simply good food and good service – that tells customers “this is a restaurant that cares about my total experience.”
So if your restaurant is plagued by low retention rates, adding a loyalty program – or revamping your existing one to give diners an entertaining experience with great rewards – can help you to truly connect with your customers and keep them coming back again and again.