According to Hospitality Technology’s 2019 Restaurant Technology Study, 38% of restaurant executives say that improving digital customer engagement and loyalty is firmly entrenched as their top tech objective for 2019.
And for good reason.
According to HT’s Customer Engagement Technology Study, 45% of diners will select a restaurant if they belong to its loyalty program.
Engaged loyalty program members contribute a significant percentage of sales to the bottom line. Starbucks Coffee Co. reported that its loyalty program, Starbucks Rewards, accounted for 40% of tender in U.S. company-operated stores in 2018.
While loyalty programs have become table stakes, the question becomes: How do you create an engaging, future-proof loyalty program?
Here are four steps needed to have an effective loyalty program.
Step 2: Offer Frictionless Ease-of-Use
Keith Cox, President, CEO and Co-Founder of Pacific Catch, says the full-service restaurant chain based in Corte Madera, Calif., has used a variety of loyalty programs over the years.
“Being in Silicon Valley, we see a lot of restaurant tech,” said Cox.
Step Three: Give the Gift of Mobile
Famous Dave’s is just one of many restaurants that are beginning to integrate their loyalty program, mobile ordering, and mobile payment into a mobile app.
Leverage Free WiFi
Anthony’s Coal Fired Pizza was looking for ways to maintain a high level of guest engagement. To do this, Anthony’s leveraged Zenreach for its WiFi marketing platform to collect guest information during the WiFi login process and leveraged Paytronix’s Rewards Platform to understand customer preferences and drive loyalty.
Anthony’s wanted to integrate the two technologies to streamline data flows and remove manual processes for greater efficiencies. Customer contact information and visit behavior collected through Zenreach flows automatically to Paytronix where it is used to reward customers.
The results have been impressive: Anthony’s has collected 150,000 new customer emails and has brought back 1,800 lapsed customers.
“Our Club Rewards program is growing much faster now and the number of customers invited to join has more than doubled,” said Skip Kimpel, VP Information Technology, Anthony’s Coal Fired Pizza, in a statement. “By combining timely and relevant communication with a rewards program, we’re getting better performance and value from our customer communications.” Kimpel shared the brand’s success story at MURTEC 2019 during the session, "Stop Leaving Guest Data on the Table!"
Step Four: Keep ’Em Engaged
Once you have members enrolled in your loyalty program, you need to keep them engaged and interested through on-going marketing. One way to do this is with personalized offers.
Pacific Catch uses segmented marketing based on purchase data and customer insights —“who’s coming in frequently, who are the big spenders so we can reward them and segment them in different ways,” he says. “Then we can follow up with them in any number of ways.”
Restaurants including Pacific Catch are using this data to personalize offers and experiences based on eating habits.
“For us it is all about how do we keep engaging with people,” says Cox.
Boston-based B.Good recently developed a new loyalty program and mobile app in house, switching from a vendor-supplied surprise-and-delight model to a custom one that’s based on personal choice.
“From the back-end, we now have the ability to glean more behavioral insights and put those insights into action. For instance, we’re able to see the time of day that customers are coming in (lunch vs. dinner), the menu items they’re purchasing (burgers vs. bowls) and locations that they’re visiting. While we had access to some of this data before, it was certainly more limited,” explains Brent Feldman, Chief Marketing Officer. “From the consumer perspective, we can now deliver offers and information that’s most relevant to them, so if their behavior indicates they’re a vegetarian, they’re not receiving news of our seasonal Maple Bacon Burger … From the brand perspective, this level of personalization will ultimately help foster long-term relationships with our customers.”
A second way to keep customers engaged with your loyalty program is by offering them ways to earn bonus points or even ways to play games with your company, says Cheetah Digital, a cross-channel marketing solutions provider. This will nurture customer relationships while keeping the interest level high. Cheetah Digital points to Chipotle as one of the restaurants that has oversimplified its loyalty program. (Chipotle Rewards members earn 10 points for every $1 spent, 1,250 points resulting in a free entrée. Extra point days help members earn points more quickly – and drive traffic to the store.)