For decades, loyalty programs have been a very effective tool for retailers to encourage new business and grow their customer relationships. Loyalty in restaurants, on the other hand, is a concept that some marketers have overlooked. Yet loyalty strategies in both sectors have quite a lot in common, and are a primary way for restaurants and retailers alike to boost customer interaction with their brands, determine purchasing preferences and demonstrate their appreciation for their customer base.
Following are two loyalty programs – one retail and one restaurant – that have demonstrated effective ways to influence consumers’ behaviors, increase their engagement with the brand and grow their programs:
Red Robin Royalty Program
With more than 30% of its patrons under the age of 18, Red Robin is strong in the family category – and has targeted its Red Robin Royalty program to include benefits and rewards suitable to diners of all ages. First tested in 2011 in 75% of the restaurant’s locations across the United States, this customer rewards program currently stands at 2.7 million members and climbing. The program continues to attract new customers with the right incentives and rewards existing members with redeemable for free gifts and special deals throughout the year, for example:
- A one-time, instant free appetizer for registering
- A free gourmet burger during the diner’s birthday month
- After ordering nine items, a tenth item free
- After ordering at participating locations once a week, for five consecutive weeks, $20 off the sixth visit
- Various “surprise and delight” offers throughout the year
Why Does Red Robin’s Royalty Program Attract Members?
Using omnichannel marketing to reach a diverse customer base across all the channels their members are, Red Robin has found ways to drive dine-in traffic through interactive social media initiatives, mobile marketing and targeted online messaging. Furthermore, by swiping the customer’s Red Robin Royalty card, team members get immediate access to a customer’s rewards status so they can redeem those rewards accordingly.
What Can Restaurants Learn from Red Robin?
Capitalizing on the idea that dining frequency, preferences and interactions constantly change, Red Robin Royalty’s road to redemption centers around its adaptability and ability to heed customer feedback and react accordingly. One of the most popular national casual dining chains today, Red Robin’s loyalty program continues to grow: in 2013, the chain witnessed a 4.1% revenue increase to $1 billion annually. Following this trend in 2014, Red Robin expects sales to increase exponentially as 25 additional locations open, boosting the number of potential Royalty participants at restaurants nationwide.
Bloomingdale’s Loyallist Rewards Program
Bloomingdale’s Loyallist strategy is simple: reward consumers for every dollar spent, through any form of payment, at any time. Whether program members shop in-store, online or at the outlet stores – or use cash, credit, or the Loyallist card – they earn Loyallist points. At certain times throughout the year, these “Loyallists” can earn double, triple and quadruple points, and the more they earn, the more benefits they receive – like free shipping and “Power Points” shopping. For every 5,000 points earned, members receive a $25 Bloomingdale’s gift card, regardless of their status in the program.
While Bloomingdale’s traditionally focused on an older audience, marketing executives have recognized the rise of the Millennial shopper. Tailoring their rewards towards this demographic, they have incorporated mobile and Bluetooth technology into their marketing initiatives, and have eliminated the need for a credit card – giving younger shoppers the ability to join the program without eliminating their eligibility to join without credit.
Why Bloomingdale’s Loyallist Program Attract Shoppers?
Capitalizing on mobile trends and store locations to drive in-store traffic, Bloomingdale’s is leveraging Bluetooth technology to promote the Loyallist program to mall shoppers in real-time and in-location – offering potential customers incentives to join the Loyallist program and earn rewards points for every dollar they spend on their Bloomingdale’s card. Using localized technology (geofencing and proximity) designed to scan for Bluetooth devices throughout the mall, the retailer’s marketers are able to send special “opt in” prompts – only one per customer, per mall visit – related to a pre-selected brand or product carried at Bloomingdale’s. If these mobile users agree to opt in to the messaging, they can download content related to that brand or product; or in some cases, a high definition video explaining how they can become Loyallist program members and save. Outside of this initiative, Bloomingdale’s marketing team has also invested heavily in different mobile applications that give their customers the ability to access Loyallist cards, balances and rewards through their personal smartphones, regardless of location, thus easing the purchasing process overall.
What Can Retailers Learn from Bloomingdale’s?
Bloomingdale’s Loyallist program is successful because it focuses on the one goal all loyalty programs should strive for: giving members relevant rewards they can actually use. When Loyallist cardholders spend money – any kind of money – they are rewarded with points they can later convert to payment; which encourages these shoppers to return to the store and spend even more on future purchases. By rewarding loyal customers with tiered points’ earnings, this program demonstrates Bloomingdale’s commitment to their customers; and in turn, makes customers more committed to the brand. Finally, it offers a straightforward and distinctive program that attracts new customers – emphasizing the notion that the key elements of any successful loyalty program are simplicity, attainable rewards and a collection of points that customers can identify with and actually use.
What do these loyalty programs have in common? They demonstrate brands that have tailored their loyalty programs based on what benefits their customers use the most. Factoring in technology, marketing initiatives, rewards and the constant push to better understand their customer base.
The Bottom Line: Brands who invest in their dining or in-store/venue experience with timely incentives that add value and are relevant to consumers stand to gain from increased membership, greater customer engagement and bottom line growth.