Much before the migration to mobile platforms, Restaurants had been successfully using punch cards to build a regular customer base. With the advent of convenient mobile platforms, the entire landscape of loyalty programs is witnessing a revolution of sorts. Roughly 30% of all restaurants are offering a customer loyalty program, and with 69% of consumers claiming their choice of restaurant may be influenced by where they can earn rewards, it is evident that loyalty programs are here to stay.
In fact, there are a number of ways in which a loyalty program can help restaurants in expanding and retaining their customer base. We will walk you through them one by one.
1. Targeting the Right Customer
One of the most pertinent problems faced by marketing campaigns is of delivering personalized and relevant messages to the consumers. This is where loyalty programs can step-in; with a focus on specific geographic locations and on people who have already shown interest in the product, loyalty programs can help businesses deliver customized messages to the customer. Personalized and relevant messages are more likely to be transformed into action, and this also helps in turning one-time customers into repeat customers.
2. Building a Rich Customer database
A loyalty program gives you the ability to build a database of your customers, which includes email addresses and preferences. With this information, restaurants can build personalized marketing strategies. For instance, if you know a particular customer’s preference for nutty Hawaiian salad from his order history, you can use this information to offer a coupon for the same as a weekly reward.
With the rich customer data at its disposal, Restaurants can even customize offers to lure dormant customers.
3. Improving Customer Relationship
With the database created through the loyalty program, restaurant owners can create a happy dining experience for their customers. This could include tweaking orders as per customer preferences or for offering exclusive offers on birthdays, anniversaries or other special occasions. Such gestures are very relevant in the restaurant business and go a long way in building a strong relationship with your guests. A happy customer is more likely to bring in new friends to his or her favorite eating-place.
4. Generating Word of Mouth
Loyalty programs can be used to create exclusive offers for your valued customers. Jonah Berger, in Contagious, stresses that exclusive offers bolster sales by creating a feeling of belonging in the customers. By their very nature, exclusive offers create a social currency, which customers are inclined to share, generating word of mouth for your business in the process. Restaurants can experiment to create a wide range of exclusive offers, which could include offering opportunities to make reservations for events before the public, or an invitation to try out a new entrée dish before it is introduced on the menu.
5. Loyalty Programs for Brand Advocacy
Referral incentives linked to loyalty programs are a great way to motivate your loyal customers to advocate your brand. Several restaurants are already leveraging this technique by offering rewards to customers who advocate their brand on social media by posting videos or reviews.
6. Loyalty Programs can help in Increasing Sales
Loyalty programs connected to a mobile platform can send regular reminders about menu options and specials. They can also be used to send coupons and promotional information around meal times or on special occasions to take advantage of the top-of-the-mind marketing strategy. Loyal customers not only buy more frequently, they also spend more on an average. In fact, several customers have admitted that they are usually inclined to spend more than they intend, just to reach the next tier in the reward system.
7. Loyalty Programs Bring A Better Return on Investment
Compared to other marketing strategies, loyalty program brings a better return on investment as customers are more likely to respond to messages that they have agreed to receive, and that are customized according to their individual preferences.