In for a Penny, in for a Pound: Three Ways to do Restaurant Loyalty Well

Oct 3, 2013

In For a Penny In For a Pound Three Ways to do Restaurant Loyalty WellIt’s no secret that loyalty programs and mobile technology are increasingly critical to restaurants’ financial and customer engagement success. A recent Millennial Media report finds that restaurants use mobile advertising five times more frequently than other industries to drive business.

Fierce competition between Quick Service, Fast Casual and Casual Dining restaurants also requires new and creative ways to attract, engage and retain customers. An example would be some restaurants focus on ambiance. Red Robin, for instance, is in the process of launching an upscale spin off, Red Robin Burger Works. Other restaurants focus on novel menu items, exclusive or “hidden” offers and the types of alcohol served.

Beyond these anecdotes, here are three ways restaurants are doing loyalty well.

1) Tailoring their customer experience: Restaurants are doing this by learning everything they can about their customers and the details of their loyalty experience, asking

the following questions: What are their customers’ dining patterns? What are their foods preferences? What’s driving them to dine? Is it more for socialization or a family-oriented special occasion? Usually it’s a mix. That’s where analysis of guest data and feedback can help. Restaurants also need to know which communication channels diners prefer and the type and frequency of communication – be it through SMS, email or social media – they’re most comfortable with.

Successful loyalty programs tailor messages to a member’s preferred communication channels, whether customers only want to receive special offers or if they want to seamlessly access their points status only via mobile, vs email. Balancing these needs can create a CRM challenge as these systems must be able to integrate multiple variables and brands must execute a holistic experience based on those preferences. Throughout the customer lifecycle, restaurants must ask themselves “how do we meet our members where they are – and are we making a difference in the customer’s overall brand and loyalty experience?”

2) Customer engagement and personalization through segmentation: Dining establishments are also improving their operations by discovering regular, semi-regular, frequent and intermittent customers and how they engage with the brand and its rewards program. They must discover customers’ overall dining patterns and preferences – accomplished through brief surveys, broader questionnaires and market surveys.
Smartphones are particularly powerful tools for capturing customer profiles, spending data and engagement. It’s critical, however, to make sure customers feel comfortable interacting with restaurants through their smartphones by respecting opt-outs. Restaurants and their loyalty program providers are also looking at segmenting customers based on their brand experiences, tailoring timely and relevant offers that speak to their needs and looking at what drives loyalty and what doesn’t. Demographic data is vital to this as well. The dining and loyalty motivations of a 30 year old can be vastly different from that of someone in their 60’s. Of course, measuring and analyzing the data is key.

3) Return to basics: The last way restaurants can improve their loyalty experience is by improving their dining experience. Historically QSRs have failed to measure up – that’s why they’re increasingly emulating “middle of the road” Fast Casual restaurants.  Casual and Fine Dining establishments are also emulating Fast Casual in order to reduce customer wait times. It’s about striking a balance between the overall experience and the economic and time factors that influence customers’ dining decisions. Starbucks and Panera Bread are great examples of eateries that mix and match the best of both QSR and Fast Casual. Currently 10% of Starbucks’ in-store payments are being made via mobile devices and its customer rewards program continues to earn high praise – and high engagement. Likewise, Chipotle and Firehouse Subs score big on their use of social media. These are engagement elements all restaurants would be wise to emulate.

Final Take


Even with technology at restaurateurs’ disposal, running a successful restaurant is one of the most challenging endeavors. That’s why, as the title of this blog suggests, restaurants should be prepared to go “all in” if they want their establishments to rise above the rest. Great food and a first-rate dining experience are a must, but determining what types of great food and what types of experiences are required. This is where the future of restaurant loyalty lies.

What are some other ways in which restaurants are doing loyalty well? We’d love to hear your suggestions and experiences. Send us an email to or share your comments below.