What Is A Restaurant Loyalty Program?
In these times of cut-throat competition, restaurants and businesses have come up with loyalty programs to not only retain the existing customers but add more. A customer loyalty program is a restaurant marketing strategy where they offer special rewards or discounted menu items or gift cards to their regular customers. Customers can earn points for every dollar spent or get free coffee for that jumbo sandwich. Just how Chipotle rewards members get 10 points for every dollar spent in the restaurant on through online ordering.
The rewards program are used by the restaurants to make sure customers keep coming back. It is also the business' way to reward their loyal customers.
Restaurants can design their own customer loyalty program as per their business needs and scale. There are mainly two types of loyalty rewards programs-
Here, customers earn points based on the amount of money they spent. Restaurants fix the number of points customers can get for a minimum amount spent. For instance, customers can earn a point or a star for every $50 spent.
Amount-based rewards programs are mostly used by fine dine or full-service restaurants where the customers spend high.
Restaurant management sets rewards based on every visit made by the customers. For instance, they can offer a free coffee or a hash brown on every sixth visit made by the customer. This tempts the customer to make more visits and as a result, they keep coming back.
These loyalty rewards programs are used mostly by quick-service restaurant management of fast-food eateries. That's because here customers visit more frequently and their average spending is low.
The Process of Setting Up a Loyalty Program
Every restaurant management needs to go through the following steps to design the best restaurant loyalty rewards program and strengthen their customer retention rate.
1. Know your customer-
How much does your customer buy from you in a year?
Since how long they have been your customer?
What do they mainly buy? Can you make them buy more?
Do they pay regularly or on a credit basis?
What profit value do they hold for your business?
2. Some groundwork-
It is important to know your customers' needs and their satisfaction levels. For this, the restaurant management can conduct surveys and interviews. Make a team of employees who can deal with customers better and can get them to answer truly.
Remember the program rewards its loyal customers, so now, shortlist the customers who are your frequent shoppers and keep coming back.
3. Set a target-
Once you have a list of frequent shoppers, set your target. For instance, if a customer makes four visits to your restaurant, set your target to 4.4 times.
4. Work out your budget-
A restaurant has to take care of a lot of things from marketing to social media, interior and supplies, etc. Everything is allotted a budget. Similarly, identify how much you want to spend on a rewards loyalty program and set it aside.
5. Categorize customers-
Now, you have the customer data, their loyalty report, the volume of purchase, frequency of online ordering from your restaurant, mode of payment debit or credit card or cash. Categorize them as per your objectives.
6. Boost customer loyalty-
Being in touch with your customer is the best way to make a place in their mind. Make your presence feel on social media, send gift cards or discount offers to their email address. Make sure your sales representative calls them regularly to inform them about sales or premium services.
Running a restaurant is hard work. It's not just the physical work, it's the marketing and social media work.
It's tough to get new customers when you're competing with all of the other restaurants in your area.
1. Sign-up reward
The best way to make your customers sign in to your loyalty mobile app is to offer them a sign-up incentive. It could be anything from points to discounts on some of your menu items or a free coffee.
2. Advertise and incentivize-
Make sure to advertise the loyalty rewards program in your restaurant. The display screens in your fast food joint should keep flashing the daily incentives like getting free fries on two burgers ' or earn points on a meal or every dollar spent.
The pos system used in restaurants these days is very smart. From customer order history to date of ordering and whether it was online ordering or visit and their email address, the pos system has it all. Now, with so much data in hand, you can customize the incentives for different customers and e-mail or text them about it. A good offer will motivate customers to make a purchase again!
Pick the Right Loyalty Program for Your Restaurant
1. Pick the rewards program that suits your business model. For instance, Dunkin Donuts loyalty program offers its loyalty members five points for every dollar spent . And you get free beverage for 200 points redeemed. While some restaurants offer promotional rewards where they offer discounts on meals if the customer visits them within the specified period.
Choose the customer loyalty program that suits you.
2. Most restaurants are using mobile app . So make sure your loyalty mobile app is user-friendly, otherwise not many customers would be willing to use it or sign-up.
3. Even if you are using a punch card or loyalty cards based customer loyalty program , make sure it is not mandatory for your customers to carry the punch card every time they visit you. The best rewards program is the one that can be used via mobile app .
What to Consider When Designing Your Rewards
In business nothing is free. Not even rewards! So consider a few things while designing your rewards-
1. No, loyalty rewards are not for all! Identify your silver' customers. The ones who visit you atleast once or twice a month and design program for them.
2. Make sure the loyalty points can be redeemed fast so that customer can rejoice it keep coming back to you.
3. Make sure your reward size is in line with the business or profit customer brings to you. Like a two-tiered Starbucks rewards program offering different benefits under Green loyalty card and Gold loyalty card .
How do you set up a restaurant loyalty program?
You’re stuck with a clunky process that’s difficult to manage and doesn’t generate the revenue that you need.
The Benefits of Having a Loyalty Program
1. Boosts top and bottom lines-
A recent study by Northwestern University's Spiegel Research Center showed-
The opportunity to earn rewards motivates lower spending customers to spend more
This, means more revenue and profit
2. Improved customer retention, apart from adding new customers.
3. Retention is cheaper than acquisition. A lot of money is spent on marketing to attract new customers. A good customer Loyalty Program motivates your customer to buy from you frequently, thus adding to your top line at a reduced cost.
Conclusion To Restaurant Loyalty Programs
A carefully tailored customer rewards program can help your business earn good revenue and profit, improve customer retention, and build your brand image. So, if your restaurant hasn't signed up for one yet, you can think about getting a loyalty program that suits your business.
To know more, click on Loyalty
You have a restaurant and you want to set up a loyalty program.
You're not sure where to start or how to go about this.