5 Tips For An Effective Restaurant Loyalty Program

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As a restaurant or cafe owner, it may often feel like your goal is to attract new customers. However, what many fail to realise is that customer retention should also be a large priority. 

Importance Of Customer Loyalty Programs

According to a survey by Invesp, customer acquisition is five times more costly than customer retention. Not to mention, the likelihood of selling to an existing customer is 60% to 70% – compared to the success rate of selling to a new prospect, which is only 5% to 20%.

This makes it even more crucial to capture customers and stimulate repeat business through customer loyalty programs. Typically, this would entail guests signing up in-person at your restaurant or online, either through your website or app.

As such, we’ve unveiled our tips and tricks to build your own restaurant loyalty program:

1. Offer Money-Saving Incentives

As research from PDI shows, the main reason 50% of consumers join a loyalty program is to earn rewards on their purchases. For 85% of consumers, deals or discounts are significant influences in their dine-in choices.

At their core, loyalty programs operate off positive reinforcement – whereby customers earn points each time they visit or purchase from your restaurant. Thus, customers are encouraged to continue these behaviours in order to earn eventual rewards such as discounted meals, free menu items and even access to secret menus.

By giving your customers an offer they can’t refuse, they’ll keep coming back for more. So make sure those rewards are worth it!

2. Provide Personalised Experiences

Apart from financial incentives, customers tend to resonate with brands that send them personalised offers and experiences.

Celebrating milestones like birthdays or the anniversary of your sign-up date is a common loyalty program scheme, but one that is never overlooked. By doing just that, you’re showing customers that you care and appreciate their support.

However, instead of using generic mass-marketing messaging, you should greet each customer using their first name in every message or email sent out.

As your customer program app continues to record purchase behaviours and customer preferences, you can use this insightful data to put forward individual recommendations and offers on menu items. This will increase your chances of a customer returning to your restaurant, where they know they are valued.

3. Tailor To Different Demographics 

As a restaurant, you’ll be serving people from all kinds of backgrounds – with some being more technologically literate or traditional than others.

A research report from Oracle Hospitality notes how 62% of consumers prefer plastic swipe cards as their restaurant loyalty program medium – while 56% of millennials chose apps as their preferred medium.

The good news is that you can cater to both ends of the spectrum. While you can direct most of your customers to your digital loyalty program app, you can also provide punch cards and swipe cards to the more traditional folks. This will ensure all your bases are covered and that everyone’s kept happy!

4. Reward Customer Referrals

More data from Oracle Hospitality shows that 52% of consumers will recommend to others the restaurants they are most loyal to. 

Word-of-mouth is one of the most powerful methods to attract new business – and if you can have loyal customers advocating your brand, you’re killing two birds with one stone.

That’s why we suggest implementing referral reward for existing members who refer a new person to your loyalty program. As mentioned, their reward could simply be a free menu item or discount the next time they dine in.

5. Train Your Front-Of-House Staff

As they say, a chain is only as strong as its weakest link.

With your staff being an extension of your restaurant’s brand, customer service is everything. Aside from providing excellent service, your front-of-house staff should be trained to pitch your loyalty program to your guests.

In fact, the 2020 Bond Loyalty Report reveals that loyalty programs with helpful program representatives experience 47% higher customer engagement.

The most ideal time to approach a customer on the topic is at the payment counter. If the customer at hand is already a member of your loyalty program, your staff should quickly reaffirm its benefits to encourage more use.

However, if they are not yet a member, your staff should be able to deliver a confident and concise spiel touching on:

  • The benefits of your loyalty program
  • How the loyalty program is structured
  • How to use the required rewards platform or app
  • How customers will be informed of promotions and offers  
  • Frequently asked questions about the program

Plus, if there’s an irresistible incentive for customers to sign up on the spot – for example, 15% off the final bill after signing up – don’t forget to communicate this as well.

In most cases, you’ll be met with a resounding ‘yes’!