Loyalty programs can help increase customer lifetime value by driving repeat business. Whether it’s a points system where customers can redeem their points for food, merchandise, or a birthday reward, restaurant loyalty programs can effectively increase revenue.
Additionally, these programs allow restaurants to gather information about their guests, such as dietary preferences and other details. It allows the brand to create more targeted offers and promotions.
Table of Contents
Offers
A successful restaurant rewards program gamifies purchases, encouraging repeat visits. When customers see their dollars being converted into points and then redeemed for free items, they start to think of each purchase not as a dollar spent but as a step toward a goal. The best restaurant loyalty programs heavily emphasize customer retention, which is facilitated by this mindset and makes it much easier for customers to part with their money.
In addition to increasing retention, loyalty programs offer restaurants an opportunity to upsell and cross-sell. For example, by offering bonus points to those who order combo meals instead of a la carte dishes, restaurants can increase sales on drinks and sides. Another way to maximize revenue is by promoting targeted promotions to loyalty members, such as a two-for-one deal on burgers.
While most loyalty program participants view transactional benefits as necessary, restaurants can set themselves apart by focusing on experiential benefits that create a deeper connection with their customers. It could be as simple as offering exclusive access to specific products, expedited or VIP service, personalized offers, and more.
Great food, top-notch service, and a pleasant ambiance are all excellent ways to encourage repeat business. But, in this increasingly competitive marketplace, you may need extra oomph to keep your customers returning for more. Whether you’re considering adding a loyalty program to your restaurant or just looking for tips on improving an existing one, here are some of the best practices to consider.
Reward Points
As the name implies, a restaurant loyalty program uses points to reward guests for their patronage. However, these programs are much more than digital punch cards, as they can also serve as a treasure trove of customer data analytics and targeted promotions. By tracking key metrics like patrons’ favorite dishes, preferred dining times, and how often they dine, restaurants can customize offers to drive guest engagement.
Restaurant loyalty programs can encourage customers to spend more than usual when used well. It is particularly effective when the rewards offer upsell opportunities, such as a bonus for purchasing an additional side or drink. The gamification of racking up points can turn casual diners into devoted regulars, especially if the experience is tailored to delight them with personalized service.
Depending on your restaurant’s brand, the point system can be tied to specific behaviors that align with your mission and values. For example, if your restaurant recognizes the hard work of certain professionals, such as teachers and firefighters, you can offer special perks to these guests on their respective holidays. A hassle-free sign-up process is also essential for encouraging participation in your loyalty program. It can be accomplished through an app, QR code, or a simple form easy for guests to find and use.
Loyalty solutions enable guests to sign up with just a credit card swipe. It removes the need for a physical loyalty card and makes the entire sign-up and redemption process seamless for your guests. It can also be branded to match your restaurant’s aesthetic, making it an even more seamless addition to the guest experience.
Discounts
One of the most effective ways to drive customer engagement is by offering irresistible discounts. The right offer can make a big difference in increasing your restaurant’s customer base and overall revenue. Using guest notes and analytics, you can track your customers’ dining behaviors and send them customized coupons that align with their interests and needs.
Tiered and point-based loyalty programs can increase revenue by encouraging guests to spend more than they would otherwise. This program incentivizes guests to earn and redeem rewards, which also helps them feel special and appreciated.
Discounts based on time, such as happy hour or early bird specials, can encourage more frequent visits and higher order totals by creating a sense of urgency. They also allow restaurants to promote add-ons, such as alcoholic beverages or appetizers, that increase the average order total.
As the focus of loyalty programs shifts from transactional to experiential, many restaurants are exploring new levers of customer engagement. These may include exclusive access, priority service, and personalization to create emotional outcomes that are harder to achieve with traditional loyalty incentives like merchandise or points.
Free Food
Many restaurants offer free food to their loyalty program members. Whether a free appetizer or dessert, this incentive encourages guests to frequent the restaurant more often, increasing customer retention and revenue.
Another benefit of a loyalty program is tracking guest data and using it for targeted marketing campaigns. By understanding which menu items are most popular, which locations customers visit most frequently, and when they dine, restaurants can use this information to create targeted promotions to boost revenue.
For example, if a particular dish has been popular with your guests, you can launch an email campaign offering a two-for-one deal on that item to drive traffic and sales. Then, you can run reports on the results of your promotion to see how it performed and determine whether you should repeat the strategy.
In addition to generating more revenue, loyalty programs promote brand affinity by encouraging guests to recommend the restaurant to friends and family. Those who recommend the restaurant more often become loyal customers, driving more revenue and new customers.
Loyalty programs are becoming more and more critical for the success of restaurants. By rewarding customers for patronage, restaurant loyalty programs encourage repeat visits, higher customer retention rates, and better brand loyalty. It makes them a must-have for any restaurant owner looking to take their business to the next level. With the right rewards and promotional strategies, your restaurant can stand out amongst the competition and become a place your customers will love to return to again and again.
Special Events
Restaurant loyalty programs help restaurants cultivate long-term customer relationships, reduce customer churn, and increase the likelihood of repeat business. By creating a line of communication with loyal guests through email and mobile apps, restaurants can offer targeted promotions to encourage recurring visits. It allows the restaurant to communicate with a targeted audience and provide special deals tailored to their preferences and dining habits.
Loyalty programs also make it easier for restaurants to track and understand their guest data. By collecting information like what guests purchase, which locations they frequent, and when they visit, restaurant loyalty programs can better cater their offerings to individual preferences and boost table touches. This strategy can result in higher average ticket sizes, more frequent visits, and increased customer lifetime value (CLV).
Many restaurant loyalty programs require new customers to sign up during their first visit using a handheld device or POS terminal to prompt them to add their email address and opt-in. Others use dedicated loyalty program apps that make earning and redeeming points, managing rewards, and finding special offers easy. Apps may also include:
- Online ordering.
- Receipt scanning for in-store purchases.
- Other tools or special promotions.
Restaurants can drive loyalty by offering sign-up incentives, gamifying the dining experience by rewarding guests with free food or points after certain thresholds and upselling and cross-selling to increase order size. These strategies can be effective, especially during a pandemic when guests are already hungry and impatient with waiting.
Also Read – What Is a Contact Center and How Does It Improve Customer Retention?
