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By Katherine Pendrill
Did you know that implementing a restaurant loyalty program is one of the best ways to incentivize repeat business?
In an industry that’s so closely tied to fluctuations in the economy and consumer behavior, restaurants depend on customer loyalty for survival. It’s regulars – not one-off guests – that are the lifeblood of your business.
If you’re looking for inspiration for how to structure your customer loyalty program, you’ve come to the right place. We’re sharing:
Having a restaurant rewards program benefits your business in two major ways: it incentivizes repeat business and increases your average order value.
A restaurant loyalty program plays a major role in customer retention. When you gamify purchases – either by converting dollars into points and letting customers earn rewards after racking up a certain number of points or purchasing items at your restaurant – you’re incentivizing them to keep coming back. They’ll start to see their purchases not as spending money, but rather as leveling up in a game – making it easier for them to part with their dollars.
Fortunately, focusing on retaining customers pays off – in a big way. According to Harvard Business Review, it costs five to 25 times as much to acquire a new customer as it does to drive repeat business. Because your customers are already familiar with and like your restaurant, it’s not an uphill battle to get them to come back.
The same Harvard Business Review study found that increasing customer loyalty by just 5% can increase revenue by between 25 and 95%.
How? Customer loyalty programs can boost revenue by helping you upsell and cross-sell. For example, if you offer bonus points to customers who order a combo instead of a la carte dishes, you’ll make more sales on drinks and sides. Or, customers may just purchase more than they had originally planned in order to rack up more points.
When your loyalty program integrates with your online ordering solution, like TouchBistro Loyalty and TouchBistro Online Ordering do, you can reward customers – and therefore boost average order value and customer loyalty – whether they dine in or order out.
Now that you understand what customer loyalty can mean for your restaurant, we’re sharing our top loyalty program ideas for inspiration, including:
With a points-based loyalty program, customers earn a certain number of points for each dollar they spend, or for simply visiting the restaurant. Many restaurants with this type of program award one point for every dollar spent.
Customers can then redeem their points for food or merch at point values you set, or for credit to use at your restaurant. For example, at 100 points, you might let a customer cash out for a $10 credit, or swap their points for a free side dish.
Jacksonville, Florida-based Epik Burger has a popular loyalty program that gives customers points for checking in to the restaurant. After earning 75 points, customers can redeem a free fountain drink, and, after 100 points, a free milkshake. Two-hundred points can be swapped for a burger, while 300 points earn customers a t-shirt. Customers can check their point balance and rewards option anytime through the restaurant’s app.
Keep your points-based rewards program fairly simple and straightforward. If customers know exactly what to expect – for instance, that they’ll get a free item after every $25 spent – they’ll be more willing to participate.
Just make sure that the redemption threshold and value of the reward don’t cut into your profits.
If you’re familiar with an old school punch card system, you probably already understand how items-based rewards work. This model rewards customers for purchasing an item a certain number of times by giving them the next one on the house. For example, buy nine cups of coffee, get the 10th free.
Another spin on the item-based reward program is to implement a points-based system for point accrual, and then offer a specific item as the reward in place of credit. For example, you could give customers a free doughnut after every 50 points earned.
Epik Burger’s loyalty program also has an item-based rewards component, known as the “International Burger Connoisseur Club.” After eating every burger on the restaurant’s menu, customers go on a slideshow in the restaurant, receive a t-shirt, and get a $25 gift card.
If you only reward one type of purchase, you could be alienating loyal customers who purchase everything but that item. And if the reward is a particular item – which not everybody is guaranteed to like – you could similarly be limiting who participates in the rewards program.
Consider making the requirements for point collection broad. For example, if you run a cafe, consider awarding points for any drink over $5, rather than only for a coffee purchase. And, make your rewards more general. Instead of just offering coffee as a prize, offer a beverage of a specific size or value.
With a subscription-based rewards program, subscribers receive rewards for reaching certain membership milestones. For example, you might offer a meal kit subscription plan for a set price and rewards customers after they’ve been a member for a specific period of time. This type of rewards program was particularly popular during COVID-19 lockdown restrictions, when many restaurants launched subscription-based services to boost sales.
Au Bon Pain’s now defunct Endless Coffee Mug club gave members unlimited coffee refills for an annual subscription fee of $199, which is equivalent to 54 cents per day. Besides the savings, subscribers were also rewarded with an exclusive, members-only reusable mug.
Competitor Panera is trying something similar with its MyPanera+ Coffee club, which gives subscribers unlimited coffee and hot tea (with some limitations) for $8.99 per month. To join the club, customers first need to join the MyPanera loyalty program.
This customer loyalty program incentivizes members to remain subscribers in order to obtain fun prizes. Consider making these rewards exclusive to the loyalty program, so that customers can feel pride in having earned them – and can’t cheat by purchasing them somewhere else.
Also, think beyond merchandise for subscription-based rewards. Reward loyal members with exclusive experiences, like a tour of your brewery, or a private cooking class (virtual or in-person) with your chef. VIP experiences like these will be hard to pass up.
In this type of restaurant loyalty program, members receive rewards with expiration dates that encourage them to dine with, or order from, you in a specific window of time. Such rewards don’t have to be tied to specific spending behavior. Instead, they can be given as surprise promotions to, for instance, incentivize customers to dine with you for their birthday or boost business during slow periods.
The sky’s the limit with this type of reward. Combine creativity with strategy to target loyal customers and fill tables or generate orders when business might otherwise be slow. You could give:
Dunkin’, for example, gives DD Perks members limited-time offers to incentivize customers to try new items or increase sales during off-peak times. At the time of writing, Dunkin’ was offering loyalty program members discounted $2 and $3 espresso drinks between 2 and 6 p.m., and two-for-$2, $3, and $4 breakfast wrap combo deals.
If you advertise that you offer a birthday coupon, or something similar, audit your loyalty program member list every once in a while to make sure customers aren’t taking advantage of the system by signing up for the program with different contact information. Remember, your loyalty program should bring in more than it costs.
While many restaurant loyalty programs only reward customers when they dine in, it’s important to reward those who order online, too. TouchBistro makes this easy thanks to the integration between TouchBistro Online Ordering and Loyalty. With this integration, customers can earn points and rewards for both online orders and in-venue meals, giving them more reasons to keep coming back.
There are many coffee shops in Austin, but Bandit Coffee differentiates itself by being a mobile-order based cafe. Customers can place orders online, and get rewarded for them, by using Bandit’s app. After placing five orders through the app, customers receive their sixth order for free. App users also receive access to exclusive rewards and promotions.
Apply a points- or items-based scheme to your online ordering rewards. Make it match your in-venue rewards program for a seamless customer experience.
You could even use your loyalty program to incentivize online orders. Give loyalty program members a coupon code for their first online order, or make some rewards only redeemable online.
It costs far less, and takes much less effort, to market to customers who already know and love your restaurant than to attract new customers. Implementing a loyalty program at your restaurant is one of the easiest and most effective ways to make the most of your existing clientele. A rewards program can help you incentivize repeat business and increase your average order size. Pick a rewards structure that works for your business and customers, find the right customer loyalty software to facilitate your program, then sit back and reap (your own) rewards.
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.
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