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Loyal customers are the backbone of your business. Not only do they provide a regular stream of revenue and generally out-spend newer customers, they also return more often, and serve as word-of-mouth marketers helping to build your restaurant’s reputation among your community.

And consider this: Data suggests that a 5 percent increase in your restaurant customer loyalty can produce as much as a 100 percent increase in annual profit. As a restaurateur, are you building customer loyalty and increasing customer retention?

Whether it’s a formal loyalty program or just cultivating ongoing customer relationships, there are some tried and true strategies to keep your coming back time and time again. Even better, your satisfied loyals will bring their families and friends, and tell their social networks all about the great experiences they have with you.

Here are tips on how to increase customer loyalty in restaurants that you can start using today to ensure a restaurant full of regulars.

1. Know Your Customers

To encourage customers to join your loyalty program, you have to have a sense of what will resonate with them. For instance, will your diners appreciate a free drink, appetizer, or dessert, or 10 percent off their next check? Or, if you have a sandwich or ice cream shop, you might offer the tenth sandwich or cone free.  A restaurant with a $20 average ticket might offer a reward once the customer has spent $100 (approximately five visits). The reward is typically 10 to 15 percent of total spend and can be used toward the next visit.

In this case, the program would be: “Spend $100 and receive a $10 credit towards your next visit.” The reward in this example is both meaningful ($10 credit) as well as reasonably achievable (five visits) and therefore drives repeat business.

The whole point is to keep your customers engaged and “playing” your loyalty game so they can earn rewards. If your current loyalty program has a high level of unredeemed rewards, that probably means the program needs a few tweaks. And by that, we mean you have to:

  • Limit barriers to entry. Don’t make the rules too complicated, or you’ll just end up disappointing customers who think they can redeem a reward, but didn’t realize they could only do so on weeknights, for example.
  • Make it simple. Punchcards and other paper promotions are old school, and customers often become frustrated when they lose rewards. Having an automated customer system that tracks their spend and allows for easy account lookup will make the process seamless.
  • Provide extra incentives on occasion. Perhaps during your slowest day of the week, you could offer double rewards points.

ideal customer funnel

2. Keep Your Loyalty Program Top-of-Mind

Your loyalty program is only effective if your customers know it exists. Your wait staff should be well versed in encouraging people to sign up and participate at the time of sale. By emphasizing that sign up is simple and outlining the benefits of being a regular patron, most people will be happy to join.

Loyal regulars spend 67% more at restaurants than new guests do. With effective guest communication, you can make every guest a loyal regular.

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And, once a customer has joined your loyalty program, it’s important that you keep in touch with them. Regular communication ensures that your customers keep their point balance, and your brand, front-of-mind. Make your loyalty program members feel as though they are part of an exclusive club by customizing each message with specific information like their name or date of last visit.  

Some ideas for regular communication include a combination of:

  • Texting:  Discounts, coupon codes, events and sale notifications are all good text marketing material. Get more customers to text with you by offering day-one incentives through effective in-store signage that makes it easy to sign up right away on the spot. Bring customers back by sending promotions that reflect their recent purchases or unique interests.
  • Social media: Stay connected and plug your loyalty program on platforms like Instagram, Twitter and Facebook.
  • Email newsletters: Send out “members only” versions of your email newsletter that includes what’s happening behind the scenes at your restaurant, provides news and updates, offers tips and tricks, and of course, exclusive coupons and discounts.

3. Keep Them Loyal

Some unhappy customers save their dissatisfaction for the Internet. When someone goes public about their bad experience, you have little recourse for erasing public thoughts. You do however have the capability to reach out to unhappy customers and make things right. Kill them with kindness: Thank them for taking the time to send feedback, own the mistake, explain that it is not the norm, and offer them a small gesture to show that their loyalty is important to you.

Whether a bad review results from bad service or just someone’s bad day, your ability to make everyone happy will never be 100 percent. However, by building a culture that’s dedicated to customer satisfaction and loyalty, you’ll achieve great success.

chocolate cake for dessert


Bonus Tip: Measure Success

Restaurant customer loyalty programs allow you to collect customer data and target effective restaurant marketing strategies to improve customer retention. But when it comes to calling a program a “success” or “failure,” it’s about more than collecting the customer information—it’s about getting them to come to your restaurant and actually use that program.

To get a true assessment, try comparing loyalty spend to non-loyalty spend, and delving into how a customer’s spending habits change when they transition from non-member to member.

The decision to launch a loyalty program or restaurant rewards program is hard. Figuring out the right loyalty offering and measuring its ROI is even harder. Insights platforms like Upserve make measuring changes in customer behavior simple, and the process of making the right tweaks faster.  The result is a restaurant customer loyalty program that is optimized for the long run.

Check out Upserve’s customer service guide!

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In a perfect world, Theresa would spend her days reading good books and writing all the time... and she'd own all the shoes her heart desired. When she's not on the hunt for shoes, you can find this Rhode Island transplant on the hunt for food that comes close to "Long Island". Her favorite? Caffe Dolce Vita in Providence's historic Federal Hill.
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