Nourishing Your Restaurant Loyalty Program: How to Feed Patron Engagement (Part II)

Apr 1, 2013

My recent post on restaurant loyalty programs offered several innovative ways restaurants can better feed patron engagement, focusing on high quality rewards requiring few hoops to jump through and the importance of gamification. I also addressed the restaurant industry’s hope for an “economic spring,” as the last few months have been challenging at best. In fact, data from a recent National Retail Federation survey of 5,185 consumers found that 34% of respondents planned to eat out less and 16% are using coupons more often.

However, let’s focus on the positive aspect of that second statistic. Coupons, after all, can be an avenue through which a restaurant program is discovered. Though, as I often say, genuine experiences must trump all. And programs that tie together social media, location and mobile – while bringing them together in one easily-accessible app – are a perfect place to start:

Serving up SoLoMo Hot or Cold
Central to gaming’s popularity are its communal and social applications – a topic we recently covered in a blog post called What Airlines and Hotels Can Learn from Starbucks, Coca-Cola and Sephora’s Approach to SoLoMo. SoLoMo, or social, local and mobile concern the convergence of social media, proximity or local advertising and how both communication efforts are being connected through smart mobile devices. Smartphone and tablet adoption rates hover near 55% and 30% respectively and digital signage costs continue to fall. For restaurants this means the time for new levels of patron engagement is now.

Open Table, a San Francisco-based company connects diners via Facebook and allows users to make mobile reservations. But, beginning in February, the Places I’ve Eaten Facebook app will let users view their friend’s restaurant preferences – where they ate, what they ordered and read descriptions of their general experience. While not strictly a loyalty program, restaurants could easily add a tiered loyalty structure to an in-house Open Tables-like app, incentivizing restaurant visits.

Don’t Get Aggravated, Aggregate
Not only do rewards need to be rewarding, the earning process needs to be seamless and efficient. One way to achieve this is through points aggregation. While the average American household is a member of 18 loyalty programs and the restaurant industry claims 9.7 million members, a third of all loyalty dollar value, $16 billion, goes unredeemed. Part of that disconnect stems from the cluttered nature of existing loyalty currencies.

Belly, however, a Chicago startup, is working to change that. The loyalty currency aggregator allows members to use and share the same points across small businesses, which include restaurants, while benefiting from social media and the metrics gathered from the experience. In February, Belly announced that it planned to hire 150 more employees in 2013, boasted over 1 million loyalty members and had 4,500 businesses signed up. Plink, another burgeoning loyalty aggregator that includes retail, restaurants and the American Red Cross, recently announced that it had surpassed 50,000 offline locations to earn rewards. In another nod to charity (emphasizing that great food is only one part of genuine restaurant loyalty), Plink has partnered with Operation Homefront to assist military families. For every military service member that signs up, Plink will donate $1 to the organization while member earn a $5 gift card. Beyond helping military service members, non-military patrons might be more inclined to eat at Plink-affiliated restaurant just knowing the good work they do, increasing business.

As it stands now, the best forecasts for restaurant industry health predict no economic “heat waves” in 2013, only moderate “warming” of 1% growth. Yet, as seen above, lackluster growth numbers don’t tell the whole story. Ironically, this is exactly the type of restaurant climate that promotes new ideas, new ways of thinking and new loyalty programs to help diners save money, yes, but also get their money’s worth through out-of-the-box rewards thinking.

So are there any restaurant loyalty initiatives I’ve left off the plate? Share your thoughts and knowledge about the best and most innovative approaches you’ve encountered in the comments section below.