How The Right Loyalty Program Can Drive Direct Restaurant Orders
In the age of online ordering, customer loyalty has never been more important to food service brands. Any restaurant can easily post a menu on Grubhub or UberEats for online delivery, but doing so comes at a steep cost, with many third-party delivery providers claiming up to 30% of the restaurant’s overall sale.
That’s why smart restaurateurs are turning to customer loyalty programs as a way to fuel direct online orders. Not only do third-party providers charge large commissions but they also muddy the waters around customer retention. Will a Postmates customer remember which restaurant they ordered from, or simply turn to the app in search of fast delivery options near their home?
In today’s competitive landscape, customer retention is the key to long term success: an extra 5% of customer retention can increase profits by 25% to 95%, and it costs five times less to keep a current customer than to land a new one.
In order to compete with third-party providers restaurant owners need to dig deep into their POS data, analyze their customers and develop incentives that will resonate.
Restaurants can, and should, use their POS system as an essential tool to create a streamlined loyalty program. POS data allows restaurant owners to better understand their customers’ habits and preferences and then use that knowledge to craft a winning loyalty program. And, when it comes to loyalty, the simpler the better. The more intuitive the program, the more likely a customer will be to use it. Nothing scares a customer away faster than a complicated program that asks too many questions, regardless of the potential discount. A successful loyalty program is simple, streamlined and straightforward, pushing customers to order directly and making it easy for customers to keep coming back time and time again while also saving them money.
To be successful, restaurant owners need to be in tune with their customer base in order to identify the types of rewards that will prove most enticing. A free product? A free upsell? A discount on a popular menu item? No one loyalty program works for all brands; therefore, owners need to analyze their customer data in order to identify an appropriate reward that will drive customer purchases. An effective loyalty program not only drives repeat business, which leads to an increase in sales, but it also allows restaurants to cut out third-party providers by incentivizing direct orders.
By encouraging a higher customer spend and allowing restaurants to avoid costly third-party fees, loyalty programs represent a no-brainer for restaurants trying to succeed in an online-heavy, post-COVID world.
Additionally, a good POS system allows brands to harness important customer data that can be used for monthly newsletters or e-blasts. Sharing new incentives or offers that can only be unlocked through direct online orders with loyal customers not only drives sales but it also keeps the brand top-of-mind for its most valuable customer base. Restaurant owners need to keep an eye on top customers and be armed with valuable rewards to bring them back if customer spending drops off. Loyalty programs offer a window into customer behavior and allow owners to build custom rewards and offerings based on the unique interests and buying habits of their customers.
Additionally, promotions should extend beyond the digital landscape. Restaurants should consider including information about loyalty and rewards programs on all food packaging that leaves the restaurant. Brands with in-house delivery capabilities can lean into branded car toppers to help spread the news around town.
When developed thoughtfully with the customer in mind, loyalty programs offer a direct path to long term success and stability in today’s increasingly digital age.
ABOUT THE AUTHOR
Since joining Givex, global cloud-based operations management solution designed to streamline business efficiencies and generate valuable and actionable customer data, Mo Chaar has helped the company expand its North American footprint. He began his tenure as a Business Development Manager before becoming Vice President of Sales for North America, and then moved to his current role of Chief Commercial Officer. His experience in gift card, loyalty and POS has played a pivotal role in the success of some of Givex’s largest partners.