There’s a reason why restaurants go to great lengths to cater to their regulars: they’re the backbone of the business. Sure, it’s important to attract new customers, but it’s even more important to keep those customers coming back.
As a restaurant owner, it’s your goal to convert as many first-time guests to loyal regulars as possible. Great food and service is a good start. But loyalty programs can give that extra incentive for customers to come back through your doors.
What is a loyalty program? How do these programs work, and what are their benefits?
Types of Loyalty Programs
While there are many different types of rewards programs, some are better suited for restaurants than others.
Point Programs
Many restaurants use point-based loyalty programs. The concept is simple: guests earn points with each purchase or dollar spent. Once they receive a certain number of points, they can receive a discount, free item or other valuable reward.
Typically, guests only need to provide a few bits of information to join the program, such as:
- Name
- Phone number
Many point-of-sale systems, like the one offered by Square, will allow you to sign up for this type of loyalty program. In this case, customers will receive points automatically when paying with their credit card or giving their email address at the checkout.
The key important thing with this type of program is to make sure that the rewards are worthwhile. Customers should be looking forward to spending more at your establishment just to get their next reward.
Birthday and Holiday Rewards
Another option is to have guests enter their email address and birthdate. This will allow you to send them a gift on their birthday, such as a free dessert, appetizer or even a meal. You can also send holiday-themed specials through personalized emails.
Customers love these types of reward programs because it doesn’t require any work on their part. At the same time, you’re also able to keep track of how often they visit your restaurant and reward them for their loyalty.
Punch Cards
Punch cards are one of the most popular types of customer reward programs, and for good reason: they offer valuable rewards and easy to implement. Each time a customer makes a purchase, they receive a “punch” in their card. After they reach a certain number of “punches,” they receive a reward – usually a free item.
You can offer punch cards for certain types of food purchases, or they can be used for every purchase the customer makes.
Customers love punch card programs because they don’t have to give any of their personal information to participate. It’s also one of the easiest programs for restaurants to implement because it’s inexpensive. You don’t need advanced POS systems or software programs. The only things you need are stack of cards and a hole puncher.
Apps
Some restaurants have app-based loyalty programs. These are especially popular with chain restaurants because they allow customers to enjoy rewards no matter where they are in the world. Guests simply sign into their free app account and “check in” when making a purchase from the restaurant.
One major benefit to an app is that it eliminates the need for guests to carry around cards or remember their rewards numbers. They'll also appeal to diners who frequently engage with their smartphones.
An app-based loyalty program is more expensive to implement. You’ll need to create a customized app for this purpose, which may be out of your budget range.
Tiered Programs
A tiered loyalty program is another option for restaurants. These types of programs reward initial loyalty and also encourage more purchases.
As the title suggests, these programs have different levels, or tiers, of loyalty. Customers will receive points each time they make a purchase. The more points they accumulate, the higher their loyalty level will rise. The higher the loyalty level, the greater the rewards.
You can easily implement a tiered system into a regular point-based loyalty program.
The Benefits of Loyalty Programs
Loyalty programs offer a wealth of benefits to restaurants. When implemented properly, the right type of loyalty program can provide the following advantages:
Boosts Sales
Ultimately, rewards programs are a form of marketing, and the goal of any marketing endeavor is to increase sales. That's exactly what a loyalty program can do for your restaurant if done properly.
Enticing rewards encourage customers to come back to your establishment. If there is an option of choosing between your restaurant and a competitor, they may ultimately choose yours if it means that they’ll receive some type of reward or rack up more points on their account.
Transforms Guests to Regulars
They’re called loyalty programs for a reason: they encourage customers to be loyal and return to your establishment. In addition to your delicious food, your loyalty program gives customers a reason to return to your business.
Repeat customers are the lifeblood of your business. Loyalty programs keep regulars coming back for more, which will keep your doors open.
For restaurants, loyalty programs are most effective when it’s easy for diners to participate and receive their rewards. Mobile coupons and punch cards require virtually no effort to use on the diner’s part, which makes your restaurant more appealing.
Improves Customer Happiness
When customers receive rewards through your loyalty program, they believe that they’re getting something valuable in return for their business – and they are.
Think about it: members of your loyalty program receive special rewards, promotions and free items that others don’t get to receive. This leads to happier diners who feel more valued and appreciated for their business.
Of course, your restaurant is ultimately the main benefactor, but customers also feel like they’re being rewarded simply for frequenting a restaurant they already enjoy. Also, everyone likes to feel like they’re a part of an exclusive club.
Tips for a Successful Restaurant Loyalty Program
Many restaurant owners make the mistake of assuming that they can just launch a rewards program and reap the rewards without putting in much effort. But not all rewards programs are successful right off the bat. Sometimes, success comes with trial and error.
Here are four tips successful loyalty programs follow:
1. Keep it as Simple as Possible
We said it before and we’ll say it again: keep your program as simple as possible. It’s a tip that’s worth repeating because it’s so important. Customers want to receive high-value rewards with as little effort as possible.
Consider using an app or online system that allows guests to enter their names and start receiving their rewards once they’ve signed up.
2. Stay on Brand
Choose a rewards program that aligns with your branding. Make sure that your rewards are also aligned with your brand. Customer-specific rewards are the most appealing and they make the customer feel special.
3. Offer Valuable and Attainable Rewards
Every type of loyalty program offers a reward or incentive of some kind. Make sure those rewards and incentives are valuable enough to entice customers to keep making purchases.
These rewards should also be realistically attainable. You don’t want to make it too easy for customers to earn rewards, but you also don’t want it to be an impossible feat to obtain your incentives.
4. Listen to Customer Feedback
Customer feedback is important when launching a loyalty program. Offer short surveys online, through emails or your POS system asking customers what they like and don’t like about your rewards program. Take this feedback into consideration when making changes and improvements to your program.
Loyalty programs are beneficial for most restaurants. With the right type of program and rewards, you can transform guests into regulars.