What Is Customer Loyalty?
As customers, we love to share our positive or negative experiences about a product or service with friends and family. Not only that, we are more inclined to trust brands recommended or referred by our friends. For any brand, word-of-mouth is more effective at driving new customers than any other form of advertising. Building a loyal customer base is all you need to generate word of mouth advertising. Further, consider the cost of retaining an existing customer, which is much lower than acquiring a new one, which makes a loyal customer a valuable brand asset. Restaurant loyalty programs can help you to turn your existing customer base into loyal customers and brand advocates.
On average, customers spend more often on brands they like. In the U.S., 40% of online shopping revenue comes from repeat customers. When a customer has a positive experience or derives value from your products or services, he is likely to return to your business. That is where restaurant loyalty programs can help you.
Restaurant loyalty programs offer special privileges by the way of discounts to customers who make frequent purchases. The main objective of this program is to build and nurture a loyal customer base. Rewards form an important part of any loyalty program, here’s a quick take on the best performing loyalty reward systems.
Types of Restaurant Loyalty Programs
These programs have evolved over the years from a simple card-based system to completely digital programs. Here we weigh up the benefits of each of these programs.
1. Card Based Systems
Conventionally, restaurants have offered reward program through card-based systems. Over time, several types of cards have been employed for this purpose. We have discussed three main types of cards here:
In this very basic form of a loyalty program, the customers are provided with an offer on the receipts. They can redeem offers if they brought the receipt back on a subsequent visit or by entering the number provided on the receipt on the website.
b. Punch cards
In this system, each time a customer purchased an item above a certain minimum value, a hole is punched on the card. Once a customer accumulates a stipulated number of punches, they can receive a reward. Punch cards made it easier to offer rewards in-line with the customer’s However, the system is more suitable for stores whose average transaction value is low.
c. Loyalty Card or Membership Card
The restaurant loyalty cards are a quick and easy option that has almost completely replaced punch cards. The loyalty card based programs can even be integrated with the restaurant’s point of sale (POS) systems to automatically track customers’ reward status. Card-based systems are easy to implement and comparatively cheaper. However, the downside with all card-based systems is that the customers usually lose the card or fail to carry it on their subsequent visits. The other pertinent issue with such a system is that they usually lack the support to record and maintain customer data.
2. Digital programs:
The latest trend in loyalty programs is completely digitized systems that are usually offered through a third party website or app. Once you integrate your Loyalty program with your Restaurant’s POS system, you will automatically be able to keep track of customers’ purchases, offer rewards, gifts and update points or redemptions.
A web/app based loyalty program enables you to build a rich customer database, which can be used to offer a personalized consumer experience or send specials via SMS or email. A completely digital program means customers do not need to carry or swipe any cards. They can sign up using their mobile no.s or email ids. Subscribed members can easily access their account status or redeem offers by logging onto the website or the app. The Digital Loyalty programs are fairly new and customers may take some time to get used to it.
Types of Reward Systems
There are several types of reward systems that are being successfully used by businesses. You should spend some time learning about these systems before selecting one that meets your specific business requirements.
This conventional form of a customer loyalty program is still popular among many restaurant owners. Customers earn points for every purchase or visit. These points translate into different kinds of reward such as discounts, coupons, freebies or other special offers. Customers can check in with a card or mobile app at your restaurant to earn points.
Restaurant owners can choose the nature of rewards, which they offer through this program. The system provides you with access to customer contact information, purchase history, and other relevant data. A third-party loyalty company usually manages these programs, which may or may not be integrated with your POS system.
In this system, customers must achieve a milestone or attain a level to proceed to the next level. They receive rewards commensurate with their level. You would need to think of innovative ideas to attract and encourage customers to move up the rewards ladder.
The latest trend in loyalty programs is to offer customers rewards in exchange for promoting your brand on social media channels. This could include liking/following your restaurant on social media channels, writing reviews, posting photos, or referring friends. This is a good way to build a loyal customer base while spreading the word about your restaurants.
Another concept that is gaining popularity, among restaurant owners and customers, is the process of including games in loyalty programs. Many restaurants are successfully building a game around their theme to engage and to motivate their customers. The customer is rewarded for points or levels attained in the game.
Rewards to Attract Your Customers
- Offer customized rewards based on customer preferences. After all, there is no point in offering a free chicken entrée to a vegan customer.
- You could create rewards that promote your business interest. For instance, offering additional points o purchases made during slow hours.
- Combine several kinds of rewards, such as points for each of the purchases or special offers and discounts, to see what works best for your particular business needs.
- You may consider aligning your brand with the causes that your customers support to encourage them to join your loyalty program. This can be anything from serving locally sourced ingredients to taking a stand on a social issue.
- You can think of themed rewards such as t-shirts or bags to advertise your brand.
- You could offer exclusive perks in place of monetary rewards to encourage loyalty. These can include guaranteed reservations for exclusive events or special dinners.
Once you are have decided which kind of restaurant loyalty program you want to adopt, it is much easier to think of the kinds of rewards you can offer and further streamline the system from there.