Restaurant loyalty programs provide businesses with a way to offer discounts and deals based on customer behavior. By collecting data, restaurants can better understand customer preferences and cultivate loyalty by offering rewards. Typically, rewards will include a free item, a discounted meal, or access to special events like a wine and dinner pairing. While customer loyalty programs and rewards come in all shapes and sizes, these programs all have one thing in common: they provide an effective way to drive business.
Essentially, the main goal of any loyalty program is to encourage customers to return again and again. In the past, repeat customers were given a coupon or punch card to keep track of, but with today’s technology restaurants can implement entire phone apps to track rewards. It is up to the restaurant to use this marketing strategy to create something that works for them and address the wants and needs of their customer base.
Are Restaurant Loyalty Programs Effective?
Absolutely. In fact, loyal customers are likely to spend more compared to a non-repeat customer during the course of a visit. According to one study, 80% of future revenue will be generated by just 20% of the customers you already have. The great food and service will help get them in the door and the restaurant loyalty program will give them an extra incentive to keep coming back and earning points or discounts.
If you have yet to implement a restaurant loyalty program, there is a good chance that your competition is already using one. A survey by Software Advice Business model found that restaurant loyalty programs became even more important during COVID-19. In response to the pandemic, 6% of respondents launched a loyalty program for the first time, 23% expanded their program, and an additional 23% kept their existing program in place.
How to Set Up a Restaurant Loyalty Program
No two loyalty programs will look the same, but there are definitely some dos and don’ts that will help you launch a successful program. Here are some tips and guidelines to follow:
Make It Easy
Make your restaurant loyalty program easy to use for both customers and employees. It is important to eliminate any barriers that would prevent customers from participating. That is why digital rewards programs are becoming more popular. While customers don’t have to hang on to a physical punch card anymore, restaurant owners can now use software-based loyalty programs to gain better data about their guests. You can then use this data to offer your customers customized rewards that they are more likely to redeem.
Make It Exciting
Make it exciting to earn rewards. Restaurant software that is designed for loyalty programs provides you with all sorts of options when it comes to creating and designing your loyalty program. Think about which options would get your customers excited and feel free to try our different combinations. Just remember to keep track of how different rewards options perform so that you can make informed decisions.
Make It Marketable
Do some promoting. A little marketing can go a long way to getting people excited about your program. Use social media and other traditional marketing avenues, including your restaurant’s website, to spread the word. Also, train employees to encourage customers to sign up. If you want to make a serious push, consider advertising at local events and cross promoting with other businesses.
Restaurant Loyalty Program Ideas
Print Punch Cards
If you are looking for a simple way to get started, paper loyalty cards may be the answer. Customers can receive a card when they visit the store and have it punched or stamped each time they visit and spend a predetermined amount of money. After completing 5-10 purchases, they can get the next item free, or a certain dollar amount discount.
The two main disadvantages of this approach is that cards are easily lost and it can be difficult to keep track of the program’s performance and effectiveness. If possible, try to collect customers’ email addresses so that you can do some additional marketing and have some information if you choose to update the system down the road.
Loyalty programs can be used to encourage and reward referrals. For example, customers can be given a referral code that they can share with friends and family. As their code is used, they can earn points towards a discount or perhaps entries in a giveaway. To really make this approach successful, offer both participating parties some sort of reward.
Rewards for Social Sharing
With this strategy, you can use your customers to build your online presence. Customers can be rewarded for sharing, following or liking posts. Another popular approach is asking people to tag one friend in exchange for entry in a contest or drawing. You can improve engagement while your customers are spreading awareness about your restaurant.
Local Friends Programs
This is a good way to get nearby people and businesses in the door. For example, you can offer a discount to other hospitality staff in your city. The key is to build in a system that encourages people to come back more than once.
Restaurant Loyalty Program Software
If you want to go the digital route and use some of the latest software to manage your loyalty program, here are some solid options to explore.
With this program, restaurants have plenty of options when it comes to customizing their rewards program. There are various guest tracking options for collecting data, which can then be used to provide targeted marketing to customers. The software also provides valuable insights into the ROI of marketing campaigns and diners are rewarded with various discounts. Pricing starts at $99 per month.
This software is geared towards chain restaurants with a focus on automation and communication with customers. Loyalty3 works with restaurants to design a custom loyalty program that is then integrated into the POS system without compromising speed or reliability. This allows employees to view information about customer preferences, available rewards, and guest information right at the POS. Restaurants also have the option of implementing personalized rewards to help bring in customers who may not have visited recently.
Fishbowl provides marketing and analytics tools that have been specially designed for the restaurant industry. Their loyalty program includes a list of real-time features for easy program management. Restaurants can create customized programs while also gathering information on customers’ habits. This information can then be used to create personalized offers that will help restaurants drive growth.
Major restaurant chains like El Pollo Loco and DQ have long been using Punchh to acquire new customers and create personalized marketing experiences. Restaurant patrons enjoy a flexible loyalty program that allows them to earn points no matter what ordering channel they use. Restaurants also have the option of adding custom features like surveys, games, and beacons for a truly customized loyalty program.
Restaurant Loyalty Program Examples
At TGI Fridays, customers get an instant coupon for a free appetizer or dessert just for signing up for their Fridays Rewards™ program. From there, customers earn one point for every dollar they spend. These points can be redeemed for any item on the menu. Here is how their point structure works:
- 50 points – Free dessert
- 80 points – Free sandwich or burger
- 90 points – Free select burger
- 100 points – Free chicken salad, select entree or $8 off food purchase
- 150 points – Free ribs or steak entree
Customers can also receive complimentary treats, the chance to preview new menu items, and a free dessert on their birthday. Families with impatient kids can also take advantage of the Jump the Line pass, which is earned after every third visit, and skip to the head of the line.
At Chili’s you can get free chips and salsa or a non-alcoholic drink just for visiting every 60 days and spending a minimum of $5 at each visit. Chili’s rewards points can be redeemed for appetizers, kids meals, and desserts. The restaurant even offers a custom app and tableside kiosk where customers can view their rewards account.
The Bottom Line
Restaurant loyalty programs are a proven way to improve engagement and earn repeat customers. Fortunately, today’s technology has made it easy to implement, customize, and manage these programs. In addition, you can collect customer data and track program performance so that you don’t end up investing too much time and effort without seeing the returns. If you have been putting off starting your restaurant loyalty program, now is the time to take the leap.
What is a restaurant loyalty program?
A restaurant loyalty program tracks customer behavior and spending habits so that they can earn points that can be redeemed for rewards.
Do restaurant loyalty programs work?
Yes, 80% of your future revenue will be produced by 20% of your current customers. Repeat business is essential to a successful restaurant and a loyalty program is an effective way to incentivize people to visit.
How do I set up a restaurant loyalty program?
Make sure that it is easy for customers to sign up, make it exciting to earn rewards, and put some effort into promoting the program.
What is the best restaurant loyalty program?
Loyalty programs come in all shapes and sizes and are created with the customer in mind. TGI Friday’s and Chili’s both have successful programs.
What are some good restaurant loyalty program ideas?
You can use traditional punch cards, provide a reward for customer referrals, allow customers to earn cash towards their next meal, offer rewards for social media shares, and create a program aimed at local workers and residents.
What is a good restaurant loyalty program software?
POSIQ, Punchh, Loyalty3, and Fishbowl all offer user-friendly restaurant loyalty program software that is packed with features.