The QSR Operators’ Guide to Successful Restaurant Loyalty Programs
Restaurant Loyalty Program Apps: Punch Cards for the Digital Wallet
“Would you like a reward to go with your meal?” A side of special offers, discounts and members-only benefits pair nicely with just about any cuisine. Needless to say, restaurant loyalty programs offer guests undeniable value. The return for operators can be equally rewarding.
According to company filings, Starbucks holds over $2 billion in customer funds across loyalty cards, with loyalty program transactions accounting for 36% of all US sales in Q2 of 2017.
The “gamification” component of loyalty programs encourages additional spending from guests as they may feel they are receiving more value from their experience. Recognizing and rewarding guests for repeat visits, loyalty programs inherently increase average ticket size and order frequency. The correlation is simple—repeat guests spend more than first-time customers. And when those customers belong and participate in a loyalty program, their spending trends even higher.
A LevelUp study revealed customers close to earning their next reward spend 39% more on average. And when those customers redeem their reward, they spend 19% more. And larger tickets aren’t the only benefit to restaurant operators. On average, number of orders increases by 75% between a customer’s first and tenth rewards.
Three Elements of Successful Restaurant Loyalty Programs
There is more than what meets the eye when it comes to successful restaurant loyalty programs. From structure and functionality to value and potential for growth, implementing a rewards system to inspire repeat orders and brand loyalty requires both strategy and creative flair. Here’s a breakdown of the three elements we’ve found to be key in business-boosting restaurant loyalty programs.
Choose the Right Platform for Your Program – Mobile Wins
The first step in launching and managing a loyalty program for your restaurant’s customers is determining where your program will live, how guests will access it and how it will function. While many operators still use punch cards to track purchases and rewards, today’s restaurant goers and fast-food eaters are ready and looking for app-based programs they won’t lose in their wallets.
Here’s something else to consider—your customers are always on the move. When hunger strikes, your restaurant needs to be wherever those customers are. Because of this, creating an app, or leveraging a third-party software, that allows customers to earn and redeem rewards right on their phones is crucial to the success of your platform.
But the most effective loyalty programs go one step further.
“Whether it’s their first or hundredth order, guests do not want the rewards-earning process to interfere with getting their hands on a meal. Customers expect a seamless user experience, from orders and payments, to earning and redeeming rewards,” shares Carly Laskey, QSR category captain at evok advertising. “To engage hyper-connected consumers, successful loyalty programs integrate with point of sales software to keep every customer interaction within a single application.”
Have a Clear Program and Rewards Structure
For customers to participate in your restaurant’s rewards program, they must first understand it. How do they earn rewards? When can those rewards be redeemed? These details must be clear and easy to access to promote continued participation from your customer base.
A few key measures to consider, and which may impact whether or not your guests start or continue using your program, include:
- How rewards are earned — Most restaurant reward programs operate on a point system. A certain number of points earns users a specified reward. However, restaurants may offer opportunities to earn extra points or rewards by completing challenges or purchasing promoted menu items.
- How rewards can be redeemed — Can reward points be redeemed across different tiers? The Zoës Kitchen ZK rewards program allows users to redeem as little as 30 “stripes” for their choice of soup or save up for a hummus starter (75 stripes), salad (150 stripes), or $25 gift card (750 stripes).
- Variety of available rewards — Do your customers have a chance to earn more than menu items? From branded merchandise to experiences, some restaurants are expanding their rewards offerings beyond discounts. TGIFriday’s loyalty program offers “jump the line passes,” which allow members to skip to the front of the crowd on busy nights.
Developing your program’s structure doesn’t have to be all cut and dry. App-based loyalty programs offer a chance to have a bit of fun with the “gamification” of earning rewards. Keep users engaged and excited with unique offers, challenges, events or personalized experiences. A prime example, Starbucks drives repeat purchases by promoting happy hour offers through its loyalty app, as well as challenges that allow users to earn extra points towards rewards with the purchase of specific items.
Offer Customers Value Beyond Discounts
As we mentioned, loyalty rewards don’t have to be exclusive to dollars and discounts. Customers seek value from their experiences with brands, and that value can take on many shapes, including members-only benefits, philanthropic efforts, events or experiences. Most importantly, customers want to feel that value applied to them and their needs—they want to know brands are thinking about them, what they really want and how to make their experiences the best they can be.
Restaurant loyalty apps are an open line of communication to your most valued customers.
App-based loyalty programs are an incredibly useful way to gather customer feedback. We’ve talked about the power of online reviews before, and your app may be the perfect place to encourage users to write a Yelp or Google review after completing a transaction. Sharing their experience on social media could even earn them a special reward while broadcasting your restaurant’s offerings to a whole new audience—a true win-win.
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