With 30% of restaurants offering some type of restaurant customer loyalty program, and 57% of adult consumers saying they are more likely to dine in a place that offers one, you are definitely missing out if your restaurant does not have a program in place.
Yes, there are already tons and tons of things to think about when you’re opening and running a restaurant—everything from properly training your staff to adjusting your menu to seasonal trends—but there are serious business benefits to implementing a loyalty program that outweigh the startup costs. When done well, a customer loyalty program can boost your business and offer you personal contact with your guests. It can help you turn satisfied guests into loyal guests, and as any restaurateur knows, regular guests are the best (and most lucrative) guests. If a shiny new loyalty program snags you even just one or two regulars, it will have practically paid for itself already (and a loyalty program will do much, much more than just that for you).
Benefits of restaurant customer loyalty programs- by the numbers
Here’s how your bottom line can benefit when you take the time to create (or revamp) your restaurant loyalty program:
Increased profits: Bain & Company found that a five-percent increase in customer retention can increase profitability by 75 percent.
- More new guests: 82% of loyalty program members referred at least one person, according to this study. That means if you have 100 loyalty customers, 82 more guests walk in the door.
- Higher ticket averages: Loyalty members spend an average of $2.14 more than other guests. Even if it costs a little bit of time and money to set up that loyalty program, you’re going to reap the benefits.
- In-depth customer data: The ultimate goal of a loyalty program is to learn more about your guests. When a guest enrolls, you are able to capture information about them that you might otherwise not have. Imagine what you could do if you knew the email addresses of all of your guests?
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Still not convinced? Here are the best tips and benefits from that restaurant loyalty programs have to offer.
Build a database of customers.
The more information you have about your customers, the more successfully you can build restaurant marketing strategies that market directly to them. What’s going to inspire people to walk through your doors? Certainly not offers that don’t appeal to them. But, if you happen to find out that tons and tons of your guests are dog owners and decide to do a dog-friendly night on your patio, pushing that out through your marketing efforts is almost sure to draw a massive crowd. The best loyalty programs for restaurants give you the ability to build a database of your customers that include email addresses and preferences. Once you have this valuable information, you can tailor not only your broader offers to what’s important to the majority of your customers, but you can start sending out specialized offers to your customers based on their individual preferences. Just think about how much traffic that approach will bring in—all thanks to your loyalty program!
Improve your relationship with your guests.
Successful restaurant loyalty programs allow you to improve one-on-one relationships with your guests. Sending a coupon for a birthday or a reminder about the celebrations going on for your bar’s two year anniversary can be easy to automate and makes a lasting positive impression on your guests. It makes them feel like insiders and will make you automatically stand out above any other restaurant that isn’t as savvy as you and isn’t sending out marketing materials to its guests like you are. Think about it like this: If you’re wondering where to go out to eat tonight, are you more likely to think of that one random place you went to a month ago and really liked but forgot its name or the restaurant that’s top of mind thanks to a nice little postcard you got in the mail last week?
Loyalty programs offer more than just discounts and rewards.
Think beyond rewards. Offer VIP experiences.
Loyalty programs have moved beyond the idea of a punch card getting a free sandwich or coffee. NNow, reward programs offer more than just discounts and rewards and focus on giving your loyal customers the best experience. Think about offering opportunities to make reservations for events before the general public, or an invitation to tour the wine cellar for a guest you know to be a wine enthusiast. Again, this is one way to make your guests feel special. As anyone who has been in the business for a while knows, people want to spend time in the places they love and will choose to spend their money in establishments that treat them well. This is one easy way to do that.
Loyal regulars spend 67% more at restaurants than new guests do. With effective guest communication, you can make every guest a loyal regular.
Add in a referral program.
Your most loyal customers can also be your best advocates. By including a type of referral incentive into your program, your customers will go out of their way to introduce more people to your restaurant. Your loyal customers have likely been doing this all along, and now you have a way to thank them as they take some of the marketing burden off your shoulders. Word of mouth referrals are the hardest to get, but the highest quality. If you’ve got the ability, consider giving out a free drink or some extra loyalty points to a guest who brings in a new patron for the first time or who brings someone in who also signs up for your loyalty program. If you’ve got two friends signed up, chances are better that they’re going to come back next time they’re looking to dine together so they can both collect their points.
Loyal regulars spend 67% more at restaurants than new guests do. With effective guest communication, you can make every guest a loyal regular.Download the Guide
Offer your customers convenience.
Think about ways in which you can reward your customers simply by helping make life easier for them. Can you offer ways for loyal customers to make a reservation more quickly or easily communicate directly with you? If your restaurant offers pick up or delivery, make it easier for customers to place an order online and pick up seamlessly. Because loyalty programs store guests’ information, when they call back to place a to-go order, you can look them up by something as simple as their phone number, last name, or loyalty program number and have all the information you need. They can skip having to read out their address and risk typos that result in late deliveries every time and you can deliver faster, more personalized service that’s sure to keep them coming back again and again—a win-win.
Measure the Success of your Restaurant Loyalty Program
Measuring the impact of your loyalty program is an important way to understand your Return on Investment, or if you need to make tweaks to increase loyalty. Here are the helpful analytics you should be looking at:
1. Customer Retention Rate
As your loyalty program picks up members, those members should be returning, essentially, fulfilling the “loyalty” part of the program. Compare numbers like the sales over time of non-members and members and rate of return for each group to watch for a developing trend in the right direction.
2. Negative Churn
Churn is the rate at which guests leave your restaurant, so to create negative churn, set up markers to measure when guests become more invested in your restaurant. Tracking when loyalty members are returning more often, spending more in a single visit, participating in more events or higher-priced services and products are all ways to assess whether the program is working.
3. Net Promoter Score
This score is calculated by subtracting the percentage of guests that would not recommend your restaurant from the percentage of those who would. Using surveys is a clear cut way to do the math here, but there are other less formal ways you can use the same principle to get helpful data. You could look at the percentage of positive vs. negative social media comments, for example. Even Yelp reviews could be a way to assess a “score.”
4. Customer Effort Score
This is how much effort a guest has to spend to have a positive experience or resolve a negative one, and this just might impact loyalty more than the “delight effect.” An efficient loyalty program that doesn’t rely on coupons or additional cards is a great way to streamline the effort your customers will have put forth to have a positive, rewarding experience.
With help from your “negative churn” and “retention” data, you will want to consider guest’ activities within comparable periods of time. For example, if you are looking at total visits to your restaurant for a year-long period, comparing “months 1 through 6” to “months 7 through 12” should display an increase in loyalty program members in the latter months. It’s helpful to take note of trends and adjust your marketing if you don’t see positive results!
While watching all of this develop before your eyes sounds great, measuring correlations between your new loyalty program, your marketing efforts and the results is crucial to making that happen. Setting benchmarks and actionable goals and following through with them is the best way to keep those guests coming back.
This takes time and energy that you don’t have. Let Upserve help run your loyalty program. Talk with us today.
Remember that the experience a guest has is often more memorable than an amount of a discount. A loyal customer stays a customer when you’re easy and pleasant to dine with. Using a restaurant customer loyalty program can be a useful tool in helping to get to know your guests better and deliver the best possible service to them.
Check out Upserve’s guide to stellar guest communication!