Great food, top-notch service, and a pleasant atmosphere are some reasons diners return to your restaurant. But what about a loyalty program to help turn them into loyal fans?
As restaurant brands shift their loyalty programs from transactional to experiential outcomes, they should consider new levers. These can include exclusive access, expedited services, and personalization.
Increased Revenue
The best restaurant loyalty programs help to increase sales by incentivizing customers to dine more often. Acquiring a new customer can be 5-25 times more expensive than retaining an existing one, so businesses need to focus on customer loyalty. When you reward your guests, they feel more motivated to visit more often and spend more on each visit. It drives up the average transaction value.
The best part is that you don’t have to create a costly rewards program from scratch, as many restaurant technology providers offer a variety of loyalty solutions. Whether starting small with a simple punch card or building an extensive loyalty app, these tools will boost customer retention and revenue.
Incentives such as discounts and free food encourage customers to spend more during each visit. But it’s also important to provide unique experiences that go beyond food. Consider offering your loyal guests special culinary classes, merchandise, or events. It will create a sense of exclusivity, encouraging guests to come back for the next exciting offer and drive word-of-mouth marketing.
Loyalty apps are a great way to collect guest data and identify emerging trends in dining habits. This information can inform menu offerings, promotional campaigns, and overall business strategies. For example, if your loyal customers are gravitating toward healthier menu options, this could be a sign that it’s time to shift your menu.
A point-based restaurant loyalty program is popular among restaurateurs, as it incentivizes guests to visit more often by turning dollars into points. Depending on the structure of the rewards, you may give out one point for each dollar spent or offer tiers with more valuable benefits, such as exclusive discounts or priority reservations.
Another way to encourage repeat visits is to introduce secret menu items only available to your loyalty program members. It will create a sense of excitement and mystery, making your customers want to return frequently to discover the latest culinary delights.
Increased Retention
Loyalty programs increase customer retention by generating more repeat business. According to a study, retaining an existing customer costs significantly less, ranging from 5 to 25 times less, than acquiring a new one. Restaurants, fast food chains, cafes, and diners depend on loyal customers for survival, and loyalty programs are vital to retain them.
A loyalty program turns dollars into points, which gamifies purchases and incentivizes repeat visits. When customers feel like they are “leveling up” in your program, they are more inclined to spend a little extra to get the rewards that matter to them most. This increased spending can increase your restaurant’s average transaction value.
The more frequent and higher-spending customers your loyalty program attracts, the more revenue you can generate. A loyalty program can also encourage repeat visits by offering exclusive rewards that make your restaurant stand out among competitors.
In addition to attracting and keeping loyal customers, loyalty programs can provide valuable insights into consumer behavior. By analyzing your customers’ data, you can improve your menu offerings and services to suit their needs better. You can use your loyalty program to promote specific marketing campaigns or special offers to reach new audiences.
To ensure a successful loyalty program, you must clearly understand your restaurant’s goals and what your customers want to achieve. Then, you can implement the right features and benefits to meet those goals. For example, a loyalty program should be simple for your customers. It should have a user-friendly design, allow customers to enroll in the program through mobile wallets, and automatically track and redeem their rewards. In addition, it should be integrated with your restaurant’s digital marketing and communication channels to help you reach your target audience more effectively.
Increased Word-of-Mouth Marketing
Your loyal customers are undoubtedly your strongest brand advocates who can effectively promote your restaurant through word-of-mouth, thus helping you save considerable money on marketing expenses. A loyalty program is also a great way to reward your loyal patrons for spreading the word, making them feel even more valued, and creating an exclusive club to draw in new business.
The best way to grow your customer base and boost retention is through a rewards program that offers enticing incentives to frequent diners, like free food or drink items, birthday offers, and discounts on takeout orders. In addition, you can implement a refer-a-friend program to provide an additional incentive for existing customers to invite their friends and family to join your loyalty program.
When choosing a rewards program, select one that is simple and easy for your patrons to use, as this will increase participation rates. It’s also essential to provide an effective communication channel between you and your patrons, such as a mobile app integrated with your point-of-sale (POS) system for real-time tracking of purchases and rewards.
While some restaurants may resort to coupons and freebies, these are often viewed as low-value rewards and do not differentiate your brand. For higher-tier rewards, you can offer branded merch, special seating in your restaurant, or the opportunity to design or name new menu items.
According to a recent study, customers enrolled in a loyalty program spend up to 18% more than those not enrolled in one. That’s why loyalty programs are quickly becoming necessary for any restaurant looking to drive revenue and increase customer retention.
The quick-service industry is a fierce competitor for customers, with significant chains launching their loyalty programs to encourage diners to visit more frequently. If you want to make sure that your business stands out, it’s a good idea to collaborate with local influencers or food bloggers who have a large following. They can help you promote your rewards program and reach a wider audience, generating more interest in your new program.
Increased Referrals
Customers loyal to a restaurant spend an average of 5-20% more on each visit than non-members. This higher spending can be partially attributed to loyalty programs encouraging customers to visit more frequently. By tracking customer behavior granularly, restaurant loyalty programs allow owners to make well-informed choices regarding menu offerings, promotional activities, and overall business plans.
Loyalty programs can also help restaurants generate more referrals by rewarding existing customers for bringing in new business. For example, a refer-a-friend program can be integrated into a loyalty app and offer discounts or free items to the referring customer and their friends. It is a great way to increase brand awareness and drive organic growth.
Loyalty programs increase customer referrals and enhance retention and revenue while eliminating expensive marketing campaigns. Studies show that acquiring a new customer is six times more costly than retaining an existing one. Therefore, implementing a loyalty program that rewards repeat visits can be a substantial advantage for restaurants.
To maximize the benefits of loyalty programs, restaurant owners should consider offering various rewards unique to their brand. For example, while coupons and freebies may be an adequate reward for low-tier customers, a more premium rewards option like branded merch or helping to design or name new menu items could be much more engaging for higher tiers.
Another way to boost revenues is by upselling and cross-selling. Creating an opportunity for customers to earn additional points on a specific item or purchase can lead to more sales of drinks, appetizers, sides, or even desserts.
Restaurants should implement a reliable CRM system to offer personalized deals based on customer preferences and history. This personalization will ensure customers receive a unique experience, increasing their engagement and loyalty to the restaurant. It, in turn, will drive higher revenue and increase customer lifetime value.