With a robust loyalty program, restaurants can capture rich customer data that informs their business. This can include transactional benefits, like free menu items or discounts, and experiential outcomes, such as exclusive access or personalized service.
Loyalty programs can significantly reduce the high cost of acquiring new customers by driving repeat and referral business and boosting brand visibility. Read on to learn how.
Rewards
Restaurants can leverage loyalty programs to track customer buying patterns and identify opportunities to increase retention, visits, and order size. In addition, restaurants avoid extra fees and commissions by encouraging customers to use dedicated apps to order for delivery instead of third-party services.
The restaurant customer loyalty program, featuring rewards like discounts, free meals, and personalized offers, has been instrumental in cultivating a devoted customer base and fostering continued patronage.
By gamifying purchases by converting dollars into points and rewarding diners after reaching certain thresholds, a loyalty program encourages guests to come back often. The rewards may be as simple as free food, a discount on a future visit, or branded merchandise. However, restaurants need to balance the attractiveness of these incentives with ensuring profitability.
Additionally, loyalty programs are an effective strategy for upselling and cross-selling, which can drive incremental revenue. For example, offering bonus points for combo meals can boost beverage sales or side orders.
Additionally, restaurants can provide free delivery codes in exchange for loyalty points to attract online diners and convert them into on-premise patrons. In marketing, this tactic can help to mitigate the Rule of Seven, which states that it takes at least seven interactions with a brand for consumers to become familiar with its offerings.
Referrals
Restaurants must leverage their customer base as brand ambassadors to grow their business. Loyalty programs are a great tool to do just that. They encourage repeat customers and increase customer lifetime value (CLV).
Loyalty programs can be used as a strategy for upselling and cross-selling. For example, a loyalty program can reward customers who buy multiple items, like drinks or side dishes. This can help restaurants boost their average ticket size.
The best loyalty programs are designed to drive emotional commitment from customers. To do this, they must incorporate new loyalty levers, such as exclusive access and personalization. For example, some brands offer personalized rewards tailored to each member’s buying history, preferences, and lifestyle.
Upsells
Rather than trying to upsell every customer, loyalty programs can help you target loyal customers with relevant offers and messages. This increases your chances of converting them into new or repeat patrons.
Using customer loyalty programs’ information, restaurants can deliver personalized content to diners, such as special offers and meal recommendations. By connecting this data to digital ordering and mobile app experiences, restaurant chains can drive retention and customer revenue.
While traditional loyalty card programs have many benefits, they can also be cumbersome for customers and difficult to track. By going digital, you can offer the help of a traditional card-based program while eliminating its inconveniences.
For example, many QSRs use item-based loyalty rewards to increase customer spending. These programs give customers a free product several times after purchasing an item. Increasing the average order size helps improve your overall restaurant revenue.
A recent survey revealed that money-saving perks (complimentary food and discounts) were top priorities among pandemic-era loyalty program users. This is especially true for QSR customers, where 81% want to earn these rewards.
Cross-sells
Loyalty programs incentivize customers to visit your restaurant frequently and spend more to reap exclusive rewards. A loyalty program allows restaurants to track sales numbers over time. It can help to identify trends that may be useful for targeted promotions and customer engagement efforts.
In addition to driving more visits, loyalty programs can increase the average check size by leveraging cross-sells. For example, a wine pairing with a meal could be recommended to loyal customers by your staff. In addition, your loyalty program will provide valuable insights about your customers that can be used for more personalized marketing strategies.
Restaurant brands have an excellent opportunity to leverage loyalty programs for long-term success. By focusing on key metrics, customer loyalty can lead to higher profit margins and sustainable growth.
In addition, retaining existing customers is more cost-effective than attracting new ones. According to a study, increasing customer loyalty by just 5% can boost overall profit by 25%-95%. This is why many table-service and QSR operators are turning to loyalty programs to drive more business.
Convenience
A loyalty program can help restaurants track and analyze sales data, such as which products or services are most popular. This allows them to target promotions and rewards better, maximizing their impact. Loyalty programs can also reduce costs by eliminating the need for third-party delivery services.
Many table-service and QSR brands offer a customer loyalty program. Typically, customers use branded mobile apps to place orders for pickup or delivery and access their loyalty points. Some apps feature other features, such as order tracking and personalized recommendations.
As loyalty program members increase, companies can reduce advertising budgets and other marketing expenses. In addition, repeat customers spend more than new ones.
While money-saving rewards continue to top diners’ wish lists, other tips can make a big difference. One example is a secret menu that offers unique twists on your traditional offerings. These special items can be a fun way to show your loyal customers that you appreciate them and want them to return. Your existing customer base can act as free ambassadors and help spread the word about your restaurant.
