5 reasons your restaurant loyalty program stinks
While most people in the restaurant industry understand that loyalty programs can increase overall revenue by 5-to-10 percent and that 68 percent of millennials aren't loyal to a brand without a solid loyalty program, it's a whole different ballgame when it comes to implementing a successful program.
In fact, the most recent statistics show that 64 percent of brands saw an increase in loyalty program membership over the last year, but some are still struggling to make their programs work.
Below are five mistakes they could be making. Are you making them, too?
Giving boring rewards
If you want your loyalty program to succeed, you need to be willing to give an exciting reward. About 71 percent of consumers decide to join a loyalty program based on discounts of every purchase and 63 percent will join for free products.These are the top two most attractive rewards. Don’t just pick a reward at random calculate exactly how much you can afford to give away based on your customer’s lifetime value. Find the balance between exciting and profitable.
Benedetto’s Ristorante Italiano, for example, created a highly successful loyalty scheme. This local upscale Italian restaurant is a little pricier than usual, causing a customer to think twice about dining there even if it is their favorite place. Benedetto’s, however, created a loyalty program that overcame this initial barrier by providing customers with an enticing and generous reward. It set up a mobile punch card that, when completed, could be redeemed for a $50 dollar gift card to the restaurant. At one punch a meal, it’s easy for customers to rack up points. It’s generous and, therefore, very effective in increasing repeat business. Benedetto’s now has over 1,000 loyal customers actively using the loyalty program on a regular basis.
Setting it and forgetting it
You’ve done your research, looked at all the options and launched the best loyalty program for your restaurant. Job well done, right? No. It’s not enough to just launch a loyalty program, you need to constantly promote it to your customers. Hang up posters, share it on social media and talk about it at your establishment. It’s also important to train your staff on advertising the loyalty program to each and every customer. The goal is to convert every customer into a loyal one, which can only happen if the loyalty program is front and center. If your rewards systems is exciting, you won’t have a problem convincing your customers to join.
Thinking old school is cool
Still using paper punch cards? It’s time to get digital. The most convenient way to do so is through mobile loyalty. A mobile app is becoming a necessity for restaurants rather than a luxury. In fact, 56 percent of millennials wants to use apps as the preferred medium for restaurant loyalty programs, and 50 percent of Gen Xers agreed. The main advantage of a mobile system is that customers, as well as employees, do not need to keep track of physical punch cards. They get lost, damaged and are easily tampered with. Consequently, 70 percent of consumers would have a more positive opinion of a brand that allowed them to “save” a loyalty card in their smartphone. Make it as easy as possible for your customers to keep track and redeem their rewards.
Treating loyalty as a one-way street
Loyalty is not a one-way relationship from our customer to you. It needs to be a two-way street, where you respond to your customer’s loyalty by tailoring your program to them. How? 61 percent of consumers said they want loyalty points and rewards in return for personal data. So use this opportunity to collect valuable data. Post-launch, you need to look at this data and seek feedback: Is this loyalty setup working for customers? Are they engaging with the company because of it? Are they experiencing any inconveniences? Adapt your loyalty program accordingly, making sure it aligns with your target audience’s wants and needs. You can even take it a step further by personalizing the loyalty program to different customer segments. Maybe you offer tiered loyalty so your most loyal customers get the best rewards.
Keeping redemptions quiet
At this point, you have gotten your customers to sign up for your rewards program (great job!) and they are accumulating points with every visit. It might seem counterintuitive, but you need to encourage customers to redeem these rewards. Most customers won’t remember to cash in their points and could use a gentle reminder.
Qikserve, for example, says "You can also set an expiration date for points and rewards to create a sense of urgency for inactive members to return."
This encouragement will lead to a positive line of communication between you and your customers. Engagement is crucial for a successful loyalty program that increases repeat business.
Andrew Gazdecki / Andrew Gazdecki is the CEO of Bizness Apps — creating powerful mobile solutions suited for local businesses with over 500,000 customers worldwide. He has been featured in The New York Times, Wall Street Journal, Inc.com, Entrepreneur Magazine, TechCrunch, Mashable, VentureBeat, and more.