Loyalty Programs Win Win for Customers and Restaurants
The economic slowdown has changed consumer spending. In July 2012 the Commerce Department reported that consumers saved more money than they spent in the last month. As consumers continue to continue to cut back, dining out is among the casualties. Both fine dining and casual sit-down restaurant chains have been hit hard. In fact, some of the biggest, best-known brands in fast food continue to struggle. In QSR Magazine’s Top 50 report 19 of the 50 largest restaurant chains shrunk last year.
These recession-hit restaurants are crafting new ways to hang on to their best customers by following the model set by the travel industry of offering experiential benefits in their loyalty programs. According to the 2012 Restaurant Industry Forecast, approximately 30 percent of restaurant operators are offering loyalty or frequent-diner programs to their customers in order to increase patronage and loyalty. According to the report. among restaurants who provide loyalty programs, 56 percent in family dining, 45 percent in casual dining, 69 percent in fine dining, 67 percent in quick-service and 52 percent in fast casual, said their respective offerings are more popular now than they were two years ago. The research also found that 57 percent of all adults said they’d be more likely to patronize restaurants offering customer-loyalty and reward programs.
Impact of Restaurant Rewards Programs on Business
Contrary to what some may have you believe, loyalty programs are not points or rewards or plastic cards or discounts. These are just means to an end. A well designed and executed loyalty program can help restaurants:
- Move beyond transactions by enabling you to monitor, reinforce and reward desired behaviors.
- Understand customer preferences and spending habits.
- Zero in on what really matters to the customer and create campaigns and promotions that resonate with each customer.
- Increase revenue by building customer relationships through targeted, valuable and relevant promotions that provide specific product lifts and sales during slow periods.
- Create a point of differentiation between you and your competitors
- Increase visits per customer, spend per visit, number of purchases, and brand advocacy.
Recipe for Successful Restaurant Rewards Programs
Listed below we have outlined the 1o critical success factors for successful restaurant loyalty programs:
- Restaurant rewards clubs are not silver bullets. They do not stand alone. They need to be part of your integrated marketing strategy.
- Create a shared vision across the organization on why the loyalty program is important.
- Set realistic goals and objectives.
- Ask customers what perks or benefits really matter to them.
- Don’t just collect data. Use your customer data to create actionable insight you can use to engage, keep and grow profitable customer relationships.
- Make loyalty program benefits and incentives attainable and realistic.
- Don’t copy your competitors with a “me too” program. Create a distinctive customer experience.
- Empower all departments to leverage customer insight to better meet the customer’s needs.
- Create and execute an ongoing customer communications plan that is relevant and consistent.
- Measure success at the campaign, customer and program level.
Who’s Who’s List of Successful Restaurant Loyalty Programs
My Outback Rewards members earn points towards rewards, experiences and great offers from Outback. Every time customers dine at Outback Steakhouse, they receive a 14 digit code on the bottom of their receipt that they can go online and enter to earn points. The points customers earn can be redeemed for Outback offers and member only experiences.
MyPanera offers loyalty program members exclusive invitations, experiential opportunities like baking with Panera bakers, preview tastings of new menu items, as well as recipes, cooking tips and surprises such as a free bakery-cafe menu item. The program becomes increasingly personalized as a member frequents Panera and spends more time in the program.
Qdoba Rewards is a program designed to show appreciation to loyal guests. Guests pick up a restaurant rewards card at any Qdoba location, register it online and start earning points by using their card with their next purchase. Guests receive a free entree each time their account reaches 1000 points. Guests also get a special birthday gift and exclusive member-only offers.
The Palm Club members receive Club Points every time they visit The Palm that can be redeemed for special rewards ranging from a complimentary dessert to a weekend getaway for two. Customers pay a one-time fee of $25 for their membership and receive a $25 gift card towards their next Palm meal or happy hour bar visit. Members also receive the newsletter, Just Rewards, an insider’s guide to The Palm featuring the latest news plus members only offers and events.
TGI Friday’s Give Me More Stripes guest recognition program rewards members with exclusive perks and offers, access to special events and the chance to earn rewards. Every time a guest eats at at participating location, they earn Stripes that can be redeemed for a choice of reward certificates based on the amount of points earned.
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Filed under: Loyalty Marketing