Did you know that 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, how are you building customer loyalty to increase customer retention?
Restaurant Customer loyalty programs are a quick win for restaurant owners who integrate into a larger customer retention strategy.
The average American household is a member of 18 loyalty programs – with the restaurant industry claiming 9.7 million of those members.
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.
58% of loyalty program members prefer to dine at restaurants with a rewards program; however, the one argument is that the offerings are sometimes lackluster.
Could that be why data shows that over 50% of rewards cards go unused?
What Do My Customers Want?
Think of your customers as if they are playing a game – your loyalty program is their challenge, and rewards are the prize they are seeking. The biggest reason for restaurant customer loyalty program churn (quitting the game): customers become unengaged – they don’t want to play the game anymore.
You have to make them want to play the game.
Customers want to take advantage of the rewards a customer loyalty program has to offer, but they don’t want to jump through fiery hoops to do so.
Getting Your Customers To Play The Loyalty Program Game
So how can you get your customers to play the loyalty game – and ensure that your best players get the rewards and don’t ditch the game like a Monopoly game gone too long?
Let’s borrow from everyone’s favorite game of Monopoly as we go through 3 quick tips to keep customers playing (and winning).
1-Limit Barriers to Entry
According to Thanx, a customer loyalty program data mine, Customers who come in with loyalty rewards to spend will typically spend 10-15% more on that transaction than their average ticket. Are you putting a limit on when customer loyalty rewards are redeemable or can be earned?
- Pro Tip: “We only play Monopoly on Mondays.” You can’t imagine such a strange restriction on game play, so why put it on earning and redeeming loyalty rewards.
2-Tear Down Hurdles Along The Way
“Go directly to jail, do not pass go and do not collect $200.” That’s exactly what it feels like to a customer when they get to your restaurant with the intent of being a repeat guest and things like not having their card or coupon on their person means they’ve now hit a hurdle.
- Pro Tip: When you collect customer information at sign up using your restaurant POS, consider adding their phone number into the game, so you can look them up with that information if they forget their card.
3-Incentivize With Bonus Points
How awesome is it when you’re playing Monopoly and you land on Community Chest and win the beauty pageant for $50? Your loyalty program members love bonus incentives just as much.
- Pro Tip: Worried about loss of revenue from discounts and “freebies”? Try these ideas instead: Come in this week and you’ll get 50 extra rewards points, or buy dessert tonight and you get 50% off an appetizer during your next visit. All of these incentives encourage a repeat visit.
The best part about a game of Monopoly? It can go on FOREVER! Just like your customer loyalty program if you focus on building customer loyalty first and the nuts and bolts second.