Do restaurant loyalty programs work? Or are they a race to the lowest prices? The verdict is that they work especially for millennials. You know the 24-35-year-olds with high disposable cash, that like to eat out or order-in a lot?
44% of millennials (25-34) say they are more loyal to restaurant brands than before. And 30% of millennials plan to sign up for every loyalty program. Source.
Restaurant loyalty programs can be a very strategic way to engage and retain this highly valuable group of customers. But, are your loyalty programs relevant?
47% of operators believe their loyalty program offerings are mostly relevant. By comparison, only 27% of consumers share that opinion. Source.
Before diving into ideas for your very own loyalty program and when they are relevant, let’s first understand how they work.
The science of a restaurant loyalty program
It works on two principles – Reward and reinforcement.
Behavior that is followed by pleasant consequences is likely to be repeated, and vice-versa. So when you reward consumers in exchange for desired actions, you can influence them to continue engaging in these actions. This is the basic design of any loyalty program.
Now let’s get you some ideas that you can use for your Restaurant and get results.
Restaurant Loyalty program ideas for delivery restaurants:
1. Loyalty points
Flexible and easy to understand and hence the most popular. Guests get points on the basis of their bill amount. You could attract new guests with loyalty points for their first order. Meanwhile, loyalists continue to earn bigger by ordering more. Be sure to brand your loyalty program with your own brand name and signature style. This would help you reinforce your brand with your customers.
Use this when: You maintain a database of your customers and are systematic about tracking customers.
2. Rewards networks
This uses the same loyalty points concept but for a group of restaurants. Restaurant directories and aggregators run this kind of restaurant loyalty program. The drawback is that this doesn’t support your dine-in loyalty program. And customers might become loyal to the network but not to your restaurant.
Use this when: You don’t want to do the groundwork of setting up your own restaurant loyalty program. But remember, the customer becomes loyal to the network and not your restaurant.
3. Free delivery
This is a quick and easy way to score a few brownie points with your customers. Waive off delivery charges for customers who have collected a certain number of points.
Use this as: An add-on to your always-on restaurant loyalty program or as a bonus.
4. Tiered restaurant Loyalty programs
A tiered restaurant loyalty program is perfect for attracting first-timers, encouraging loyalists, increasing repeat orders and the order value. First-timers sign up because of its simplicity while loyalists stay involved to get bigger rewards. We won’t be surprised if your customer lifetime value shoots through the roof, for this group of customers.
Use this when: You have customers that order from you online and dine-in at your restaurant as well.
Create seamless omnichannel Loyalty programs that integrate with your POS, Online orders and CRM.
Restaurant Loyalty program ideas for dine-in restaurants:
1. Welcome drink or a free dessert
Greet your loyal customers by name when they arrive at your reception. This should not be a challenge if you have a POS that integrates with your Loyalty data. Serve them a complimentary welcome drink as they wait for a table or give them a free dessert at the end of the meal.
2. Preferred seating
Keep certain tables and sweet spots (like a table on your patio or terrace) reserved for your loyal customers. This is undeniably one of the most powerful ways of making your customers feel special.
Use this when: You have tables to spare.
3. Jump the queue
Allow your loyalists to get advance bookings on high-interest days (Valentine’s day for example) or a busy Friday. And it gives first-timers them that much more reason to be part of your loyalty program.
Use this when: You have peak periods and high traffic days.
4. “Get a free gift on your 10th visit”
The simplest way to encourage loyalty to your restaurant – you give your guests something in return for a certain number of visits. But unlike Loyalty points, visit-based program don’t encourage higher spending. This might be useful if your goals are increasing the frequency of visits.
Use this when: Most of customers visit you because of your location, i.e proximity to a place of work. Especially good for cafes.
5. Celebrate the season
Celebrate spring, summer or just about any topic of common interest. Add in a special menu item or dress up your space to serve a personal experience. You can be creative with this and make your loyalists feel special and give them a reason to recommend you to their friends.
Use this when: You have a slump period or a group of customers that have not engaged with you for a while.
6. Invite-only events, concerts and theme nights
This is a great way to build a community. Organize invite-only concerts or theme nights for your loyal customers. But keep in mind that hosting these events can be quite an expensive affair.
Use this when: You have a little extra budget.
7. Secret menus
Design secret menus only for your customers with a certain number of loyalty points. This loyalty program gets a lot of attention because of its exclusivity and high word of mouth. Make it even more compelling for your regulars by changing the menu around every month. This will promote curiosity and make your loyalty program even more desirable. Shake Shack is famous for their secret menus and has customers raving.
Use this as: An add-on to an always-on omnichannel loyalty programme.
8. Celebrate your customers’ special days
Send them a greeting card, a discount for a birthday dinner or a gift card for their anniversary. But as you can imagine this program is limited to a few times a year.
Use this as: An addition to an always-on loyalty programme like a tiered loyalty programme.
9. Time-bound campaigns
“This weekend only”, or for the “Next 2 days only” – you must have seen these kinds of campaigns. Offer something special for a specific period of time only. This is another way of encouraging your loyalists to participate in your loyalty program.
Use this when: You want to activate usage of your dine-in loyalty program.
10. Referral program
Customers recommend their good experiences to their friends. So allow for that to happen by rewarding your loyalists for introducing you to new customers. Create a word-of-mouth mechanism that works on your behalf.
Use this as: A tier in your loyalty program. People are more likely to recommend when they have just had a great experience.
11. Align to a cause
Do good and good things happen to you. You could ask your loyalists for a cause that they are (or would like to) associate with. And you could donate a small percentage of their bill value to the cause on their behalf. This will also prevent your customers from switching over to another restaurant.
Use this when: You have engaged loyalists who respond to your feedback campaigns.
Top Tips for your restaurant loyalty program success
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- Introduce customers to your loyalty program at the right time – When it comes to getting your customers to sign up for your loyalty program, timing is crucial. Send an SMS notifying your users the number points they have stacked up right after the first order. Strike the iron when it’s hot.
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- Stay top of mind – Having a loyalty program is a great start but you need to promote it to the right customers at the right time to stay relevant. SMS reminders are a great tool. [Check out: Promoting restaurant loyalty programs – 7 ideas you can implement today.]
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- Gamify – Loyalty programs are a bit like playing a game. Users get rewarded for certain actions and reach higher “levels” with greater rewards. Branding your loyalty program with your own moniker is a great way to capture your customers’ mind space and making it exclusive.
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- Mix it up – Having a separate online and dine-in loyalty program is unacceptable to the modern restaurant customer. They expect a smooth loyalty experience when they order from you online, get takeaway or dine-in at your space. Be sure to opt for a loyalty program that works for all these above situations.
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- Track progress and remind – Getting users to adopt and use your loyalty program is based entirely on how you design your loyalty program and how often you engage them. Try sending a weekly, bi-weekly and monthly scorecard of the points stacked, redeemed and points needed till the next tier.
And you are off to the races!
Whether you use one or a combination of methods, building a tribe of advocates is a great strategy for your restaurant’s growth, sales, and profits. And when you have the technology that makes it easier for you, you are that much closer to a certified win.
Here’s to lasting customer relationships.
(Tell us what to research into. Sound off in the comments below)
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