Serving Up Restaurant Loyalty Program Success

Nov 27, 2012

Considering food’s importance in human civilization and social bonding, loyalty programs designed to attract, retain and engage restaurateurs might seem redundant. Good food sells itself, right?

It does to a degree. But surveys repeatedly show that restaurant loyalty program members spend more than their non-loyalty member counterparts and in at least one study, 43% of companies with loyalty programs witnessed spending gains.

So it makes perfect sense that restaurants would continue developing their loyalty and rewards programs with customer retention in mind. In recent restaurant and dining news Darden Restaurants Inc., owner of the Olive Garden and Red Lobster chains, has embarked on a major technology upgrade. The improvements, which began in the summer of 2012, call for the integration of both chains to digitally collect and share consumer data, a move designed to create a more accurate picture of Olive Garden and Red Lobster patrons. Once that building block is secured, Darden hopes to improve its “to go” ordering system, offer online and text-ahead seating, sell e-gift cards and perhaps go all out with a complete loyalty program.

But if Darden truly wants to break new ground and create a unique, experience-driven loyalty program, it should keep in mind that point accumulation and text-ahead seating are only part of the loyalty story. Darden says its motivation for the upgrade “is to better connect with the 20- and 30-something age group,” a demographic the restaurant chain feels it’s largely lost. If text-ahead seating is just now being implemented I can understand their demographic challenges: younger diners have expected this level of connectivity for years.

Outback Steakhouse, on the other hand, is a great example to emulate. Owned by OSI Restaurant Partners LLC, Outback recently launched its Tablemates rewards loyalty program that links a patron’s Facebook (and email) friends to rewards earned. Members create up to 8-person “virtual tables,” where table members earn points for free menu items and other perks – even if they’re not dining at an Outback restaurant. Tables can earn up to 350 points per year, faster than members could earn by themselves. The program also promotes “table games,” additional collective experiences that aren’t just about enjoying discounted or free food.

Armed with the right loyalty management tools, Outback Steakhouse becomes a destination to have fun.

But Facebook isn’t the only social media platform driving this engagement. Newer “subchannels” like Instagram and Pinterest – both more image-friendly than text-centric Facebook – help further the dining social experience long before and well after a meal has been eaten. Smartphone in hand, users can snap pictures of their favorite foods and entice their friends to come check for themselves what they’re missing. Likewise brands can post their own pictures (and videos) of their most delectable dishes and recipes, furthering what’s become a dynamic and real-time two-way conversation. Starbucks, for example, boasts more than 8,400 Pinterest followers and nearly 600,000 on Instagram. And all kinds of other restaurants are hopping on — Witness Jimmy John’s right now, just stop in and you’ll see for yourself.

Of course, tracking the ROI of Facebook, Instagram and Pinterest can be a challenge if you are looking beyond easily measurable social KPIs. But the barriers to entry of a social media campaign are almost non-existent today, and the costs associated can be minimal. The most challenging aspect, as reiterated by Domino’s social media guru Ramon DeLeon, is the commitment from all staff from all corners of restaurant operations to remain dedicated to the text-driven and image-driven online conversation.

There’s no question that food – and easy access to it – remains central to the human experience. Too often left off the list of culinary accolades, though, is the social experience the same good food engenders. Today that social experience includes the digital world as much as the physical. Either way, restaurant loyalty programs shouldn’t be thought of as dessert, but rather a main ingredient of a main course, once again proving that good food and the joy of consuming it, should be shared.

Good food may sell itself, but loyalty should be viewed equally as a vital ingredient for success.