Last month, some friends and I went to brunch at a favorite local spot. The decision to eat at this restaurant was easy – I gave them my e-mail address to participate in their loyalty program during a previous visit. Later, I received an e-mail for $20 off of my bill during my birthday month, which is a significant discount. Why wouldn’t I want to take advantage?
In today’s economic landscape, it is critical for restaurant operators to drive repeat business and to focus on bringing customers into their restaurant and away from the competition. My friends and I had many different restaurants to choose from, but we chose the one where we saw more value attached to our visit. This specific restaurant obviously understands that building customer loyalty is necessary for them to remain in business, and they have built a simple and effective program. Below are some tips on why you should implement a loyalty program as well as characteristics of successful programs.
Why do you need a loyalty program?
• Loyalty programs are necessary to compete. From an operator’s perspective, there is an endless supply of competition, and more than likely, they have loyalty programs. Your business will lose out in retaining diners if you are not able to compete in the loyalty aspect.
• Loyalty programs help drive restaurant traffic. When value is attached to the dining experience, you are more likely to increase the number of diners who choose your restaurant. By adding a distinction to the regular event of purchasing a meal, you can attract more customers and stimulate repeat business, which can also increase your revenues.
• Loyalty is a great way to launch new menu items. Advertising new menu items through a loyalty program gives operators an opportunity to look at what guests are purchasing and to suggest an alternative. You can better promote new items by giving customers an incentive to try them.
• Loyalty programs help you understand who your customers are. When customers volunteer information to participate in a loyalty program, operators have more information to analyze and develop effective marketing plans to better reach their core customers.
• Loyalty gains insight into the purchasing patterns of guests. With a loyalty program integrated into your point of sale, you are able to track and store information about what menu items your guests prefer or purchase most often. This helps you to create effective targeted marketing campaigns for your most loyal and regular customers.
What makes a loyalty program successful?
• Loyalty programs cannot affect speed of service. You can have the best plan for a customer loyalty program in the world, but if it slows down your service, then it will be unsuccessful. Make sure your program has no effect on the speed with which your business normally operates.
• It should be simple for staff and guests. Your loyalty program needs to be easy to use for both your guests and your employees. If your plan is too difficult and keeps guests from making a clear decision, they will abandon it.
• Make sure your loyalty plan is well publicized. Having a loyalty program in place, but not promoting it will not do your business any good.
• Guests need to see that there is value in their participation. It is critical that your guests see that there is value for them in your loyalty program. By effectively promoting your program, you can make your guests feel like they belong in your restaurant more than in that of your competitor, helping stimulate repeat business.
Mary Catherine Brutz, Marketing Communications Analyst