Why you need a loyalty program for your restaurant
September 16, 2022
Putting manpower and money behind customer acquisition for your venue can be costly and time consuming. The answer? Repeat business. The majority of businesses benefit more from customer retention than they do from customer acquisition. That means loyal, returning customers are where you get the majority of your sales from, as opposed to new ones that have never visited your venue before.
Do restaurant loyalty programs work?
The Pareto Rule states that 20% of your customers make up 80% of your sales proving that working on nurturing your customer base is a huge benefit for hospitality businesses. At a time when customers are trying to be more loyal than ever before — enter the #supportlocal movement — a loyalty program is now that much more effective.
Plus, who doesn’t like to save a bit of money where they can? In fact, 75% of customers say they would switch brands for a better loyalty program.
What are the benefits of a restaurant loyalty program?
A loyalty program is a sure-fire way to bring customers back to your venue time and time again. Sure, every restaurant, café or bar has repeat customers. You have those customers that live around the corner and call your spot their “local”, as well as those customers who are just loyal — perhaps popping in every day for their morning coffee or every Sunday for their brunch — but a restaurant loyalty program can still increase venue visits by 35%. If two cafés sit side by side, both have good coffee, yet only one has a loyalty program that offers your 8th coffee free, chances are a customer will choose the café with the loyalty program and head there for their daily morning coffee.
As well as bringing customers back, a restaurant loyalty program can also entice customers to spend more per transaction, increasing your sales and putting more profit into your pocket.
Your customers feel valued
Loyal customers need to feel their business is appreciated and there is no better way than throwing in a freebie every so often. It says, ‘Hey! Thanks for sticking by us.’ At small cost to the business, your customers will feel valued and appreciated, making them that much more likely to return time and time again.
It’s a one-time effort
If you’ve never had a loyalty program before, it might take some time and manpower to get it up and running. It’ll require initial research into the type of loyalty program that’ll work best for your venue. This may include speaking to customers themselves and getting a feel for what they would appreciate most. Then you’ll likely have to research any software you’d need to use to make your loyalty program happen.
But once you figure out how to set it all up, it will become a self-sustaining program — like many effective organic marketing efforts — and is no longer an effort. Soon, you’ll barely have to lift a finger to generate those sales.
It’s a powerful marketing initiative
If you haven’t considered a loyalty program as part of your marketing efforts, now is the time. Loyalty programs can be one of the most powerful marketing tools as it is the start of your customers becoming brand advocates. Chances are if you have a great loyalty program, people are talking about it.
Perhaps your café offers every 10th breakfast free or every 5th coffee free. If people are impressed by your loyalty program, they’ll tell their friends about it and generating word-of-mouth marketing that you may not even have anticipated.
People trust those they know - in fact, 92% of people trust word-of-mouth recommendations from friends and family more than any other form of marketing, showing just how powerful a loyalty program can be.
You can do it all digitally
Nowadays everything can be done online, and this includes your restaurant loyalty program. Instead of printing coffee cards, flyers or vouchers to hand out to customers this can be done online, making the process simple and seamless for both you and your customers.
You’ll learn more about your customers
Another positive of setting up a restaurant loyalty program is the data. With Boomerang Loyalty you’ll gain valuable insights into your customers. We’re talking anything from the number of visits to how they were referred.
Learning more about your customers, who they are, and what they like can then help with other marketing efforts such as building customer personas, email marketing and social media advertising.
Venues that have nailed their loyalty programs
Now you know the benefits of creating a loyalty program for your establishment, here’s some inspiration to get you going. Different initiatives work for different venues, so it’s important to try a few out and see what resonates best with your customers.
Here are some of our favourite restaurant loyalty programs.
Starbucks Rewards basically works like a credit card. The more you spend, the more rewards, or stars, you accumulate. You then use those rewards at the store. Different amounts of rewards can earn you different things. For example 25 stars is an espresso shot and 200 stars is a sandwich. You also get a free drink every nine stars.
Who wouldn’t be a Dunkin' Donuts regular if you could earn five points for every $1 spent? DD Perks incentivises customers to become DD regulars and simplifies the process with their own rewards app. Every 200 points equals a free drink - and that doesn’t include the sporadic bonus offers they’re so famous for. Plus, to make it even easier, the app lets you order on the go.
The TGI Fridays Rewards program gives customers what they’re after as soon as they start using it, which is really an incentive in itself. Once you sign up to their points rewards program, you receive a free dessert or starter dish and then the rewards really begin.
Stay loyal and you’ll get a free dessert with 50 points, a free sandwich with 80 points, a free burger with 90 points, free ribs with 150 points and more! And onyour birthday they offer a free dessert. Not bad!
If you’re a pizza fanatic, chances are you are part of the Domino’s Rewards program and if you aren't, you should be. Once you sign up, you get 10 points for every online order you make (that is more than $20). After six online orders, you get a free pizza.
Once you sign up to McDonald’s Rewards Program via the app you collect points with every dollar you spend, but it doesn’t stop there. They drop daily surprises to keep customers engaged, excited and coming back for more.
So whether you’re looking at bettering your restaurant loyalty program or are wanting to create one from scratch,you can be sure that there’s nothing more effective than keeping your customers engaged and frequently returning for more.
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