Restaurant Loyalty Program Ideas: How to Start

Restaurant Loyalty Program Ideas: How to Start
Raul Galera

By Raul Galera

Table of Contents

    Restaurants have been pressured to make the move online to stay afloat amid the global pandemic and city-wide lockdowns. Leveraging F&B technologies solutions can entice online customers and attract traffic to your website and social media pages.

    If you aim to increase customer retention, one of the most important investments is loyalty programs. According to Shoes for Crews Europe, 57% of adult consumers are more likely to visit restaurants with a loyalty program. Another study found that 66% of consumers modify their purchase amount to maximize points.

    Now, thanks to technological advancements restaurants can easily launch their own digital loyalty program. Why get a loyalty program? Here’s what you need to know:

    What is a restaurant loyalty program?

    A restaurant loyalty program rewards customers for their loyalty through discounts, exclusive products, and promos. As a child, you’ve probably seen old school punch chard-style loyalty programs. Here, the card is stamped or punched each time a customer makes a qualifying purchase.

    Restaurant loyalty programs kind of work the same way but it’s all digital. There’s no need to punch a physical card or process the receipt. Instead, customers can get information about promos, discounts and even make a purchase through the loyalty program app or website. The software processes and tracks customer orders then distribute the rewards when a qualifying purchase is made.

    How to leverage restaurant loyalty programs? Here are some ways you can introduce loyalty programs to your restaurant.

    1. Identify your goals

    The first step is to identify what you want to achieve from launching a loyalty program.

    List down the objectives you want to reach per quarter or per year. A common goal would be to boost the frequency of visits or increase average customer spend using a punch card style loyalty program.

    In the past, Red Robin’s former loyalty program offered customers a $20 reward for making 5 visits in 5 weeks. In addition, they also offer the 10th item for free. Meaning if you bought 3 entrees and 4 burgers, you’ll get 7 credits towards the “10th item free” reward. Free items can range from sandwiches, burgers, entrees, and salads.

    A good tip is to design a rewards system based on the results you want to get. You can gamify the process and encourage customers to bring their friends or spend more to attain rewards.

    2. Keep it simple

    Make sure your loyalty program is simple and easy-to-understand. Minimize the number of steps required to sign-up and attain rewards, otherwise, customers will give up midway.

    According to Forbes, 75% of consumers are interested to engage with loyalty programs accessible through their smartphone. In addition, 79% of Americans say they are more likely to join a rewards program that doesn’t require physical cards.

    A modern-day digital loyalty program must be accessible and easy-to-use. Consider developing a mobile app that customers can access to view loyalty program promotions and their purchase history. Keep user experience in mind and ensure it has an easy-to-use and intuitive interface.

    3. Train your employees

    Training your staff to use your loyalty program should be your first priority. Let them know the available tiers, the latest promotions, the process of earning points, and payment methods. Ideally, they should be able to teach customers how to use the app and understand how the process works.

    A good tip is to condense this information in an employee handbook. Staff can refer to this resource to learn the ropes or find responses to customer inquiries.  Even if you’re hiring college students who are technologically savvy, it still makes sense to make this part of the onboarding process.  

    Once they’ve grasped the technical side, train staff to encourage customers to join and sign-up.

    For instance, cashiers can encourage customers to join the loyalty program to get discounts on their future purchases. As staff makes an active effort to sell the app and answer inquiries, they could uncover unique selling points and potential ideas for future loyalty promos.

    4. Promote your loyalty program

    No one will sign-up for your loyalty program if they don’t know it even exists. To get as many sign-ups as possible, actively promote your loyalty program.

    Let’s take a look at the following marketing tactics that you can use:

    Social media

    Social media is undoubtedly a popular platform for promoting your loyalty program. In fact, 22% of millennials believe offers and promotions on social media encourage them to visit a website. After receiving a reward, over 15% of customers will share their experience on social media. Hence, don’t forget to share your loyalty program updates and promotions in your accounts.  

    Consider some organic or sponsored social media posts. For example, this Instagram post of Good Vibes by Fitness First highlights the benefits within the app such as the discounts available from their wide array of dining partners.

    Email and SMS

    Send emails or SMS to customers to upsell your loyalty program rewards, promos, or new products. According to TextMagic, 81% of consumers search for restaurants on their mobile devices. Mailchimp’s email benchmarks believe the open rate for emails in the restaurant sector is a bit higher at 21.17%, with a click-through rate of 1.25%.

    Sending a promotional message about your loyalty program every now and then will remind customers to spend their points or drop by your business. But don’t overdo it. Otherwise, brand advocates may unsubscribe because your messages are too spammy.

    For example, Starbucks' rewards email lets customers know that they can earn three times more stars by purchasing on a specific date. This marketing strategy is one way you can increase foot traffic to your store.

    Non-customers might find your loyalty program interesting as well. To tap into this opportunity, you can use email to promote your loyalty program as well. Check out Hunter’s directory of cold email templates to learn how to reach out to people right.

    Create a page dedicated to your loyalty program

    Loyalty program promotions such as social media posts, emails, and even efforts from your staff highlight the existence of your loyalty program. However, highly-interested customers want access to in-depth information. As a result, create a dedicated page explaining your rewards system and current incentives. You can also place a FAQs section to help first-time users navigate the platform and understand how to maximize points. Don’t forget to include a powerful call to action at the end, encouraging visitors to join your loyalty program.

    Fashion retailer Simons has a FAQs page featuring their perks, alongside pictures of their merchandise to entice purchases.

    At the bottom, they have a list of common inquiries that visitors can click to learn more in-depth information.

    Promote in your physical outlets

    Businesses with in-store outlets can create posters and banners to promote their loyalty program. Place these marketing materials at the front of your shop or near the cashier to spread awareness among passersby in your community.

    At the early stages of your loyalty program, get staff to distribute flyers along your storefront to boost initial sign-ups.  

    Starbucks Michigan used an attention-grabbing chalkboard art to boost sign-ups. Beside it, customers will find a shelf filled with brochures containing the benefits and sign-up process.

    5. Segment customers and use data to deliver rewards

    Digital loyalty programs are a rich resource for data on the purchasing behavior of customers.

    Some digital loyalty programs have the ability to segment customers. They can also manage and distribute loyalty program rewards, as well as monitor the results and performance of each promo.

    With this valuable information, you can categorize customers and send personalized messages to regulars and those who are slipping away. You might also be able to categorize customers based on their spending habits and promote low-value rewards (i.e. a discount) to customers who are more likely to prefer them and promote high-value rewards (i.e exclusive products) to those who prefer to save their points.

    By using research-backed information, you can send more relevant messages via email or SMS. At the same time, you can simultaneously boost your results and prevent some customers from abandoning your loyalty program.

    5. Collect customer feedback

    Members of your loyalty program are often repeat customers or brand advocates. This makes them the best sources of constructive feedback for your business. What is more, people are 97% more likely to be loyal to your company if you implement their feedback. This means collecting customer feedback helps you understand your customers better and increase brand loyalty at the same time

    With a digital loyalty program, you can distribute surveys to measure customer satisfaction within the platform.  A good tip is to offer points or rewards to boost the response rate.

    Here are some questions you can consider:

    • On a scale of 1 to 10 (10 being the most likely and 1 being not at all likely), rate how you feel about recommending our restaurant to a friend or colleague?
    • On a scale of 1 to 10, how would you rate our menu design?
    • What are the menu items that you would recommend to your friends? Select all options that apply.
    • How often do you visit our restaurant?
    • On a scale of 1 to 10, how would you rate our customer service?
    • What menu items or services would you appreciate from our restaurant specifically?

    Answers to these questions provide quality insights which you can use to modify your loyalty program and marketing strategy. Some suggestions may also be useful for revamping your menu and scaling your restaurant.

    Closing Thoughts: Surprising Ways that Loyalty Programs Can Improve Your Restaurant

    The rise of eCommerce and digital technologies mean that restaurants must also leverage technology to succeed in 2021. While you may have survived with a punch card style loyalty program, you won’t be able to maximize results without a digital loyalty program. If you want to boost customer retention and loyalty, you have to leverage innovative tools to engage with your consumers. Here’s to hoping you’ll be able to boost membership and successfully launch a loyalty program based on the tips from this article.

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    Raul Galera
    Raul Galera

    Raul Galera is the Partner Manager at ReferralCandy and CandyBar, two tools helping small and medium businesses run customer referral and loyalty programs.