Loyal guests are repeat guests, so incentivizing them with valuable offerings that reward their commitment to your brand is definitely a win-win.
Consumers have become accustomed to being rewarded for their business since the 1700s, and Canadians on average are members of eight loyalty programs per household. For restaurants, introducing a loyalty program offers a magnitude of benefits.
“To amp up basic loyalty programs, operators can further engage customers by adding a gamified aspect or even incorporating surprise awards into their programs,” recommends Anne Mills, senior manager of consumer insights at Technomic. “With a rewards program, brands can also harness big data to better understand consumer behaviour and offer more tailored experiences. This, in turn, will drive repeat traffic and sales.”
- 36% of consumers say a rewards program is an expectation at fast food, and 34% say it’s not an expectation but could encourage them to visit more often
- 41% say a rewards program is an expectation at fast casuals, and 32% say it’s not an expectation but could encourage them to visit more often
- 64% of consumers say they visit fast-food restaurants because the price is reasonable, while 53% say the same of fast-casual restaurants
Source: Technomic’s 2018 Canadian Future of LSR Consumer Trend Report
“With a rewards program, brands can also harness big data to better understand consumer behaviour and offer more tailored experiences.”Anne Mills, senior manager of consumer insights at Technomic
Building your brand
Developing the “right” loyalty program for your restaurant concept can result in many positive benefits from an improved guest experience, elevated brand position, and financial paybacks:
A complimentary glass of champagne, a discounted meal, complimentary birthday treats, and perks that surprise guests at point-of-sale checkout or payment all evoke positive guest brand association that leaves them feeling well thought of and valued, and returning for more. Often the calculation of what was spent to achieve the reward becomes overlooked, which results in guest retention.
Positive restaurant brand experiences lead to positive word of mouth, which in turn lead to more bums in seats. In this digital age, positive reviews, social sharing, and increased website traffic are critical to a restaurant’s survival, so these opportunities are HUGE pros when considering a loyalty program.
The fact: brand loyalty equates to increased sales. On average guests enrolled in an effective loyalty program will spend 46% more with your business, because they are visiting you more by an average of 35%. These results are achieved by offering an easy-to-use program where the guest values the reward benefits
Asking your guest to join another loyalty is a big ASK from a consumer perspective. Keeping their fears, daily challenges, spending habits, and decision-making behaviour top of mind is critical in developing a loyalty reward program designed for “your guest.”
So, what’s going to entice YOUR restaurant guests to feel comfortable in providing their personal information and gaining their interest in managing yet another app on their phone, or carrying another plastic card in their wallet?
Here’s where to begin understanding the loyalty landscape from an operational and guest perspective:
The loyalty applications or systems that will pair best with your existing POS system to avoid incremental equipment, integration and training fees.
Find the best digital reward and loyalty programs for you
These have become more popular in recent years as mobile phone capabilities have transitioned into digital wallets. A simpler acquisition process, less plastic in guests’ physical wallets, automatic reward tracking and user updates, reduced marketing costs, and daily brand exposure are just a few of the benefits of going solely digital.
Do a comparative analysis
Review the ease with which guests can join the program directly at POS or through digital channels, the data depth of the reporting, automation and trigger marketing support, the ease of reward redemption, flexibility in developing new rewards and incentives, and the fee structure of the program.
- TIP: 49% of Millennials eat out at least once a week and they are using takeout and delivery apps on average more than other guest segments. Millennials prefer point accumulation reward programs, based upon dollars spent, as seen with the success of the Starbucks reward program.
Be the guest!
Join restaurant loyalty programs that already exist to understand the end-user experience, to gauge the value of various reward incentives from complimentary menu offerings to point accumulation.
Consider member acquisition
This is the initial goal of every loyalty program, but where does this step make sense within your current guest experience? For quick-service restaurants with an ordering counter, the “join us” ask is much more authentic when your guests place their order. However, for fast-casual and sit-down restaurants, table and receipt messaging may fit in more smoothly as part of the guest experience, with subtle server messaging relating to perks that can be achieved by joining the loyalty program.
Create a dedicated role
Assign someone within your team to act as the reward and loyalty expert. This step is critical to the program’s success, as it won’t manage itself. Organization of a successful loyalty program begins up front.
These various steps will provide your team with valuable insights to help identify which type of loyalty program will achieve guest retention, increase cheque size, but also be manageable for staff from front-of-house operations to head office.
About the Author
Kate Engineer is a hospitality communications consultant with more than 12 years of consumer-centric cross-functional marketing and communications experience.