Where we dine and how often have changed. The prohibitive cost of food and other financial constraints on consumers means that people are eating out less, once a week on average, vs. twice a week in 2019. With less expendable cash, more consumers are preparing more meals at home or opting for fast food instead of going to a full-service restaurant.
In response, restaurant owners have had to reevaluate their marketing plans and find new ways to bring guests back to their establishment, such as incentive programs. Today, over 57% of restaurants offer a loyalty program or incentives in some form or another. One of the many reasons for the popularity is flexibility. Loyalty programs can be customized to meet the specific requirements of your business. Another reason is the 55% of customers who frequent restaurants at least twice a month because they can earn rewards there.
Loyalty programs are designed to motivate repeat business, build relationships with customers, and drive revenue. They work most effectively when the loyalty software is directly integrated into your POS, which facilitates real-time data collection. This will help you navigate the information quickly and allow you to communicate with customers and ensure a seamless guest experience.
The Value of Loyalty
- 47% of diners participate in at least one loyalty program.
- Loyalty members visit restaurants 20% more frequently and spend 20% more than non-members.
- 65% of a company's revenue comes from the repeat business of existing customers.
- A 5% increase in customer retention correlates with a 25% increase in profit.
Here are a few options to consider when implementing a loyalty program:
Frequency Programs:
With this program, the guests are anonymous, and the company does not collect customer data. Its goal is to encourage repeat business by offering customers rewards based on the frequency of their purchases and interactions with a business. It is an effective solution for smaller companies or independent coffee shops that want a simple strategy but do not have capacity to manage a more extensive program.
Points Based Loyalty:
Here, members earn points for every dollar spent at the restaurant. At specific points thresholds, the points are redeemed for a tangible item such as a free side dish or a monetary value deducted from their bill. Customers are encouraged to enroll in the program, and their membership is identified by a unique number that tracks their point accumulation. The information collected is used for various marketing campaigns and correspondence with the members.
Tiered Loyalty Programs:
To further incentivize members, restaurants can implement a tiered loyalty program. Instead of one reward threshold, the members are encouraged to increase spending and unlock multiple levels to receive a greater reward each time. To keep members interested in the program, the restaurant can notify them of upcoming promotions and unique offers.
Customized (Premium) Loyalty:
Here, the data collected is more in-depth and highly customized to each member's experience and preferences. Rewards are issued for birthdays, anniversaries, and special occasions that occur in the member's life. Incentives can also include privileges such as valet parking, priority seating, and invitations to special events.
Members who choose to participate and are willing to provide personal information are more likely to be your best brand advocates. They have a certain level of trust for the brand and be invested in the program for the long term.
There is little doubt that restaurant loyalty programs increase customer retention and encourage diners to return more frequently. When you provide guests with an environment where they feel recognized and appreciated, they are more likely to choose your restaurant over others.
To learn more about Givex Loyalty Programs, visit: www.givex.com or Speak to a representative: https://web.givex.com/contact-us-sales-form/
Sources:
9+ Restaurant Loyalty Program Statistics: A Must-Know in 2024: Business Dasher
107 staggering statistics that show the power of loyalty programs in 2024: queue-it.com
