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When The Numbers Don’t Add Up: Restaurant Loyalty Programs Could Use an Omnichannel Push

As we continue to spread our omnichannel loyalty perspective—see our May whitepaper on the subject—it’s important to highlight its tenets on specific industry verticals. Today’s we’ll examine restaurants.

If “the customer is always right,” as the expression goes, then why does recent data suggest otherwise when it comes to the restaurant industry? A recent report by the National Restaurant Association (NRA) found that 57% of adults said they’d be more likely to eat at restaurants offering customer-loyalty and reward programs. Even with that support though, only about 30% of restaurant operators are even offering such incentives.

Considering that repeat customers typically spend one-third more than new customers—a statistic that likely holds true for the restaurant industry since returning diners are more familiar with menu selections and more eager to indulge—then delivering restaurant loyalty should be top on the agenda, right next to serving delicious food.

If more than half of adults say they would dine out more often at a restaurant with a loyalty program, but less than a third of eateries have adopted them, then it stands to reason there’s a lot of money being left off the table. Historically, slow adoptions rates were due to financial expense or not-yet-ready technology. However, it’s 2012—a time where technology can enable most anything for a non-punitive fee.

For those restaurants with loyalty programs, most reward customers for frequent dining through accumulated points based on the cost of a meal. Better than no program but not enough in todays ever increasing world filled with technology and high consumer expectations for a seamless customer experience. Restaurants need to evolve their programs to incorporate omnichannel loyalty beyond that two-dimminesional approach. This strategy is about creating a tailored customer experience through relevant marketing channels, and leveraging customer feedback and data which in turn shapes more valuable rewards.  The crux is making everything about driving loyalty metrics and engagement.  Upgrading from multi-channel marketing to omnichannel begins with not only gathering the most accurate and real-time restaurant patron metrics, but also collating this data in a central location that management can use to drive behaviors. Consider a loyalty program that, beyond doling out points, offers members the chance to view a menu on their mobile device, recognizes and acknowledges members for their loyalty, allows them to use an app or other device to place an order in advance, and encourages members to connect with others through social media to share their dining experience (thereby earning rewards for spreading the good word) while also being able to see which of their friends have dined at the same restaurant chain or exact location and what menu choices their network of friends suggested.  And, then take it one step further and imagine capturing this data in real-time to drive consumer insights relevant for improving the loyalty program and even the company’s offerings as a whole.  It’s a very real possibility and one that will certainly differentiate those that are willing to take the leap.

Too often existing multi-channel restauranteurs think only in terms of email promotions or print-at-home coupons, missing this creative out-of-the-box step. An omnichannel restaurant loyalty program thought can integrate these data collection points into a complete restaurant patron picture.

Of course, some restaurants are closer to achieving omnichannel loyalty than others. For instance, the Palm’s 837 Club offers its members anything from complimentary desserts to weekend getaways for two. And moving beyond strict in-restaurant loyalty is one place omnichannel is trying to take the industry. So it very well may be that places like the Palm that are employing facets of omnichannel loyalty without even knowing it.

Another example may seem a bit afield but it underscores the continued blurring and merging of not only marketing channels, but the very industry verticals themselves. Nordstrom Café is an in-department store eatery whose menu items are linked to the overall Nordstrom loyalty program. And since good food is essential to the restaurant loyalty experience, it’s important to note that the café’s Yelp reviews have been extremely positive. Here’s an entre of the two most recent Nordstrom Café Coral Gables, Florida critiques:

Luis Pablo A. writes: “This is really a great place to eat! The food quality is really good, in fact awesome! They serve the best french fries I can remember, and the calamata olives spread is fabulous. The steaks are really steak house quality and with a very very reasonable price.”

Yessy M., of Miami, simply says this: “You mention Nordstrom Cafe and I think of the Citrus Turkey Sandwich…Thanksgiving in a sandwich!!”

Can’t you just taste their excitement?

That’s why Kobie is continuing to address the power and potential of omnichannel loyalty. By linking these genuine in-store/in-restaurant experiences and channeling it through a loyalty program, it only enhances its value. We may be years away from omnichannel loyalty becoming the norm, but the more we promote its benefits to restaurateurs and customers alike, the faster it will catch on. Starbucks too, also gets props for its rewards program in which it incorporates social media and customer feedback, but I don’t want to over-roast your beans so won’t describe that example at this time.

Clearly there’s evidence of omnichannel restaurant loyalty in practice. But more restaurants need to get hungry that when the NRA produces its 2013 survey, the number of loyal customers and the number of restaurateurs delivering that omnichannel loyalty experience will add up.

Read more of our omnichannel loyalty insights here.

 

Bram Hechtkopf

Bram Hechtkopf