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By Katherine Pendrill
All restaurants have had to tighten their budgets during COVID-19, and one effective way to save money while actually making money is to start a restaurant reward program.
Loyal guests are important for two reasons: lower cost of acquisition and higher total guest spend. Did you know attracting new customers is 16 times more expensive than retaining current ones? Plus, if you can get your guests to sign up for a reward program, these program members spend up to 18% more than other customers.
In other words, add a restaurant reward program into the mix, and your customer relationships can become even stronger and more profitable.
To help you create a successful reward program of your very own, this guide will cover:
A reward program is a system that helps you build restaurant customer loyalty by incentivizing your guests to dine with you repeatedly. Typically this is achieved by offering your loyalty program members exclusive behavior-based rewards like check or item discounts, and freebies for a particular number of visits to your restaurant, or a certain amount of money spent per meal.
To better understand how these reward programs can be structured, let’s run through a few notable restaurants with rewards programs. Keep in mind that while these are reward programs run by major restaurant chains, independent restaurants can easily emulate these ideas with the help of technology like TouchBistro Loyalty and TouchBistro Marketing.
The only thing better than a discount is free food, and TGI Fridays offers just that with its rewards program. After signing up, guests get a free appetizer with the purchase of a meal, and free chips and salsa every time they dine at the restaurant. Yes, please!
TGI Fridays’ reward program entices customers to visit repeatedly by using a point system where guests earn one point for every dollar spent, which they can then use to redeem free food. Program members can also earn points when they get a friend to join the program.
TGI Fridays’ mobile app has been particularly integral to the success of its loyalty program with 36% of sales made through the loyalty program and 30% of all transactions made by app users.
Panera’s MyPanera rewards program is one of the most successful restaurant loyalty programs out there. Customers can use their phone number or the Panera mobile app to track their orders and score personalized rewards. In this program, customers earn rewards based on the number of visits (or orders), not the total value of those purchases.
Though its loyalty program is similar to that of other restaurants, Panera has had major success with unique offerings like its unlimited coffee subscription. According to Panera’s chief brand and concept officer Eduardo Luz, these kinds of rewards are a huge hit among loyalty members, who use the brand six to 10 times more than non-members, ultimately helping the brand generate significant recurring revenue.
Chick-fil-A’s point-based rewards program has three membership tiers that are designed to keep guests coming back so that they move up the ranks, earning more points for every dollar whenever they reach a new tier. Points can be redeemed once a member has a certain amount, or saved for later. And, Chick-fil-A even offers surprise rewards on occasion.
While this point-based reward system may sound simple, the tier-based reward structure is a major hit among customers. In fact, a 2020 Brand Keys loyalty survey found that consumers rated Chick-fil-A as the top fast food brand in terms of creating emotional engagement and loyalty perks.
Based on the examples above, it’s clear that you have the freedom to get as creative as you want with restaurant rewards program ideas and set your program up however your heart desires.
However, it’s important to consider how you’ll actually implement your program, and what will appeal most to your guests – a card-based or digital rewards program. Let’s dive into each of these formats to help you decide.
Many restaurants with rewards programs started out with the trusty wallet card. You know the kind – once you get a certain number of stamps or punches on your card, you get a deal or a freebie. This method is easy to get off the ground (you’re mostly just looking at marketing and printing costs), and it worked well enough back in the day.
However, as time passed, customers who belonged to rewards programs began to complain that they had too many cards to keep track of, and their wallets couldn’t contain any more. Enter the evolution of the loyalty card – the digital rewards program.
As card-based programs have fallen out of favor, mobile marketing for restaurants has become increasingly prevalent. Luckily, you don’t need to be tech-savvy or have a large budget to implement a digital rewards program or app at your restaurant. You can simply purchase an affordable, pre-built solution, and customize it with your own branding and specific rewards.
Restaurant loyalty programs that operate digitally or via mobile app are a great option nowadays because your guests expect to be able to connect with you on the Internet – especially on their smartphones. In fact, more than 75% of diners say it’s important to be able to redeem rewards online. And, in the midst of the COVID-19 pandemic, having a digital program offers your customers the convenience and safety of a touch-free rewards experience.
So, what kind of restaurant rewards software should you look for?
One option is TouchBistro Loyalty, which is integrated directly with the TouchBistro POS and doubles as a restaurant CRM. TouchBistro Loyalty makes digital loyalty programs easy with a custom branded Customer Web App where your guests can create an account, and collect and claim rewards easily, all from their phones.
Download our illustrated guide to setting up and customizing your TouchBistro Customer Web App.
We’ve now explored what a restaurant reward program is, and we’ve walked through a few different examples and types of dining programs. But, before you go making any grand plans, take some time to learn how to create a successful program with these 11 tips.
If you don’t yet have a restaurant POS system, make purchasing one the first item on your to-do list. Since most reward program software integrates directly with your POS, this will help you streamline your operations and track loyalty dollars. It can also help you systematize your entire workflow, including sales made through your reward program, so that your restaurant can continue to grow.
Earning rewards and perks should be fun, not a puzzle your guests have to work to figure out. Keep your reward program simple by focusing on a few key pillars. For example, choose a format your guests are familiar with. Over 70% of customers say a point system is “very important” or “extremely important” to a restaurant rewards program, so you could start with that.
Today’s world is digital-first. Customers want a seamless, personalized user experience, which is exactly what you can achieve with a rewards program app. Nearly 80% of Americans say they’d be more likely to participate in a rewards program that doesn’t involve lugging a physical card around in their wallet. So, what are you waiting for?
Creating a web or mobile app – or using a solution like TouchBistro Loyalty to set up your very own Customer Web App – allows customers to check into their loyalty accounts so their transaction data flows directly into the CRM platform. You can then use a POS-integrated marketing platform like TouchBistro Marketing to further segment your diner data – like orders placed, average spend, last visit, and birthday – and create automated in-app campaigns that keep diners continuously engaged.
The way of the future lies in customer-centric marketing with various reward offerings, and an app with mobile payment options.
One smart way to get your guests more engaged with your loyalty program is through gamification techniques. For example, you can create a tiered point system so your customers feel a sense of achievement every time they “level up.” Considering that 37% of customers would even pay to reach a higher level of a reward program, the tiered approach is a no-brainer to entice your guests.
Gift cards also make another irresistible reward option. Over half of respondents to a survey by Software Advice say gift certificates are a “very important” and “extremely important” incentive driving them to obtain a certain level of points.
Your restaurant reward program won’t do your bottom line any good if you keep it a secret. Make sure your staff understand how the rewards program operates, and can communicate its benefits to your guests – like birthday perks or digital coupons – in a clear and convincing way.
You can even gamify this process by offering employee incentives for getting the most reward program sign-ups within a month. A little friendly competition can go a long way in driving sales.
Once you’ve been running your rewards program for a few months, you can start making improvements to the system. Ask your members what they like most about your program, and if there’s anything they’d like to see changed.
Leverage technology to help you gather this information. For example, if you have reward program software that allows you to gather customer feedback, use that platform to get the down-low from your guests.
For instance, TouchBistro Loyalty integrates with TouchBistro Marketing, a marketing platform that connects restaurants with their guests and drives repeat visits. Diners can leave 1 to 5 star ratings and comments on their experience. Diners can also rate each menu item on their order based on a thumbs up or down, as well as provide other comments. As a restaurateur, you’ll be able to view all this feedback in a user-friendly dashboard, where information can be analyzed and filtered over time, and then used to improve your reward program and offerings.
When a customer joins your restaurant reward program, it’s a good indication that they have an affinity for your brand. Now, your job is to make them feel special and build an even stronger relationship. And with a digital reward program, you can use data to do just that.
Most loyalty software will enable you to segment your guests using behavioral data, such as the days of the week they typically visit your restaurant and how much they usually spend. Your next step is to use a marketing platform, like TouchBistro Marketing to create personalized offers to make those guests feel valued, and encourage them to come into your restaurant to spend more. For example, you could create a campaign targeting your reward program members who purchased high-ticket entrees within the last week, and send them a deal for 15% off their next visit.
With a digital reward program, you can see how long it’s been since a guest has visited your restaurant. You don’t want to end up out of sight and out of mind, so consider using a marketing platform, like TouchBistro Marketing, to send your lapsed members an email with an urgent, one-time offer or digital coupon that they can redeem if they visit your restaurant within the next week. Then, once they arrive, be sure to wow them so they see what they’ve been missing!
With so much buzz around email and social media marketing, you may be surprised to learn that live chat is now the top method of online contact, preferred by 46% of customers over email (29%) and social media (16%).
With the right loyalty and marketing solutions, you can chat directly with your customers without ever leaving the platform, enabling you to share news about menu additions and promos directly with your most engaged guests. For instance, with TouchBistro Marketing, restaurants can send messages directly to diners in their Customer Web App announcing new menu items, special promotional campaigns, or even just general news and updates.
Let’s face it – many potential customers would rather hear about your restaurant from satisfied guests than from you. In fact, user-generated content receives 28% more engagement on social media than business posts.
Urging your reward program members to post on social media about their experiences is a great way to generate hype about the program and get the word out to a wider audience.
We’ve talked a lot about digital marketing (because it works), but don’t forget to cross-promote your rewards program in-house. For example, add a blurb about your program to your printed menus in addition to your digital ones, and put up signage that promotes the sweet member perks.
Now, with these 11 expert tips for creating a restaurant reward program freshly under your belt, you’re ready to wow your guests with a program that keeps them coming back.
Katherine is the Content Marketing Manager at TouchBistro, where she writes about trending topics in food and restaurants. The opposite of a picky eater, she’ll try (almost) anything at least once. Whether it’s chowing down on camel burgers in Morocco or snacking on octopus dumplings in Japan, she’s always up for new food experiences.
By Andrea Victory
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