For restaurant operators and their marketing executives, a well-designed and well-executed loyalty program does more than drive customer engagement and frequency of return visits– it forms an essential part of the company’s overall marketing strategy and can be a significant contributor to the company’s bottom line growth.
Separate from other marketing initiatives, loyalty programs can also give restaurant operators direct insight into what guests think about their menu items, staff and overall quality of service before, during and after the dining experience. In other words, how their customers experience their brand. And from this collected data, executives can evaluate company performance against key performance indicators to determine how their loyalty program impacts the restaurant’s reputation and encourages customer referrals, repeat purchases and renewals.
In today’s intensely competitive loyalty landscape, it’d critical for marketing departments to contribute to the profitability of any business – and demonstrate this contribution through measured and proven results.
How? Through a customer loyalty program.
While a well designed loyalty program is one facet of a comprehensive marketing plan, it should also be a central component. When it comes to profitability, many marketers forget that new customer acquisition is more expensive, and less lucrative, than customer retention. And as a result, they often silo their loyalty programs instead of integrating them into the overall marketing strategy. When it comes down to it, loyalty programs reflect what marketing campaigns aim to achieve: increased brand interactions, increased spend and more profitable customers.
Here are our ten restaurant loyalty programs tips to achieve best results
Send guests a relevant “come-back” promotion or offer
Today’s consumers are inundated with dozens of marketing messages daily, delivered through every channel. To keep your restaurant’s promotion or program call-to-action from adding to the digital chaos, marketers should strive for meaningful loyalty interactions and intelligent messaging that really resonates with consumers. Relevancy is key. You want them to come back because they received a genuine experience; so instead of sending guests irrelevant information or offers, use the knowledge gleaned from your CRM and transactional data sets to send messages that are timely and personalized and offer both a reason and a request.
Use relevant marketing channels.
Understanding the demographics of your patrons and the marketing channels they prefer is crucial to knowing how you can reach and impact them effectively. To promote your restaurant program effectively, deliver messaging through those channels you know your guests prefer and that illustrate your knowledge of the individual. Don’t use marketing tactics that past data has proven won’t generate a response. Establish a presence on all communication channels that are relevant to your customer base – from direct mailings and personalized emails or geo-targeted alerts, to user-friendly, mobile optimized websites and applications – and keep your target audience in mind.
Break down silos.
Whether your goal is to increase traffic, promote new menu items or introduce new dine-in or out services, this information needs to be communicated through your loyalty program. Your loyalty program should be viewed as an extension of all other marketing initiatives (advertising, POP materials etc.) and therefore used to reinforce a desired behavior. As your most loyal patrons make up your program consider providing them with expanded or specialized content and rewards that reflect overall marketing campaigns as this can deepen the engagement levels and accelerate goal achievement.
Encourage “Word of Mouth” advertising.
Just as restaurants know the value of Word of Mouth for good reviews and to drive traffic, so too can it drive loyalty participation – especially in the restaurant and retail sector, two industries that are social by nature. In fact, recent studies show that Word of Mouth is embraced by Millennials – who view it as a leading purchase influencer. For marketers, “social” influence needs to go beyond traditional social media channels and aim for ROI-driven marketing initiatives with measurable sales impact. With the development of Big Data, researchers can use data-driven Word of Mouth to evaluate purchase influence, and as a result, use their findings to boost the ROI of any company marketing campaign. Using the power of Word of Mouth advertising, good loyalty programs will be shared organically.
Segment members to identify and give special treatment to your high-value members.
Make sure you distinguish between high-value and infrequent customers, and distribute rewards by segmenting them into good, better and best customers. While 63% of company marketers focus their attention on new customer acquisition, smart companies know that 20% of shoppers constitute their loyal customer base – and it’s this same 20% that drives 80% of restaurant and retail revenue. Key information to consider is this: loyal customers spend ten times more than new customers, they are 60-70% more likely to purchase additional items at the point of sale, and they are 70% more likely to advertise your company. Every customer likes to receive the VIP treatment – it’s important to send them special promotions and rewards opportunities to offer an impression of exclusivity.
Use test messaging strategies on loyalty members to see what works.
The old adage, “What’s good for the goose is good for the gander” can be especially true when it comes to loyalty. As your loyalty program’s membership is made up of a cross-section of your patrons, utilize your membership base to test (and retest) marketing messaging, campaigns and even promotions to your various customer segments. This controlled environment can provide actionable insights that can be received in real-time and then disseminated to a wider audience later.
Success Story: Take the Italian favorite Maggiano’s Little Italy, for example. Known for their large portions of authentic Italian dinners, they tested a smaller menu, with more controlled portions, in select restaurant locations to try and attract a larger lunch crowd. Upon realizing its success, the smaller menu was adopted by all locations nationwide.
Empower your employees.
For restaurant owners, employees are the front lines of all business operations and the face of the brand to your customer base. Within this role, employees often directly influence a customer’s dining experience and can significantly impact whether or not they will return to your restaurant. For those reasons, it is critical to ensure that all staff members (servers, hostesses, bartenders, etc.) are fully trained on all aspects of your restaurant loyalty program so they are adequately prepared to engage potential new members. Make it as fun and easy as possible. Give store clerks a script they can read that contains the program’s standard messaging, explains the value to the customer and extends an invitation for them to enroll. Train employees on how to use the loyalty program software to register customers and process rewards. Finally, come up with creative ways to encourage employees to promote your rewards program – like contests and prizes – just as you would encourage your customers to join.
Promote your loyalty program.
Promoting restaurant loyalty programs is not about facilitating outreach to the general public; it’s about getting to the right customer in a way that will really resonate. Today’s business culture is driven by innovative technology, opposing customer opinions, and a never-ending search for “the next new thing.” In this environment, restaurants can ensure they reach targeted customers by marketing through omnichannel, engaging consumers through channel-optimized loyalty program marketing campaigns that are “right timed” to deliver messages at every touch point relevant to customers on their own level. Unlike traditional rewards programs, omnichannel loyalty gives marketers a way to reach consumers with the right message at the right time, in a way that is organic, intuitive, individualized, engaging and fun, and represents the brand appropriately.
Success Story: The Colorado-based chain, Larkburger, promoted its new loyalty program by creating a contest that asked customers to suggest the name of the program. The result was increased customer engagement and a $50 Larkburger gift certificate for the winner.
Engage with customers, especially after their dining experience.
Consumer feedback is crucial to restaurant success – and those who listen to this feedback and make changes accordingly stand out from the rest. Customer reviews allow you to analyze your current business practices and evaluate what might be negatively affecting your success. If there is negative feedback, consider the following questions: What is the root cause of the problem? Is it a communication issue? How can we correct it? How will this affect the overall customer experience? Customers are the backbone of any operation. By using their concerns to improve the dining experience, you are not only securing their return, but you are creating opportunities for these diners to use positive Word of Mouth to engage additional consumers and boost your restaurant’s ROI.
Success Story: The popular chain Saladworks created the website www.SaladworksListens.com to gain customer feedback in real time, and have a staff on hand to respond to that feedback immediately – including feedback received after hours and on weekends.
Keep the data flowing.
Today’s technology has businesses in every sector analyzing data to change the way they operate. Just as these businesses use loyalty data to influence marketing decisions, they use other forms of data, too – from transactional to social intelligence – to ensure operational success. For example, through data collection and analysis, restaurants can identify critical facts and figures about what diners prefer, what they’re purchasing – or not, which rewards they like and those they’re not taking advantage of on a daily basis – all in real time. Factor in social media, and these same restaurants can use comments, “likes” and retweets to gauge customer opinions, better understand diner trends, and leverage data to put their loyalty marketing dollars to work where it actually counts.
Success Story: The Great Outdoors, a Texas-based sub shop chain, created a mobile loyalty program to engage customers, track their transactions, and apply rewards and discounts directly to consumer payment card transactions during the actual point of sale. By employing this program, the restaurant chain increased annual member visits by 63%, and discovered important information about customer dining habits and purchasing preferences.
For restaurants, customer loyalty programs are an effective way to turn new customers into regulars, increase the frequency of customer visits, gain more insight into the restaurant’s customer base, attract new members and increase revenue. By following these best practices and avoiding the bad ones, restaurant operators and their marketing executives can incorporate customer rewards programs into annual marketing campaigns that drive member engagement exponentially and boost customer loyalty year-round.