In the past, a wallet full of coffee shop punch cards was as close as most people got to restaurant loyalty programs. But times have changed, and younger generations have different expectations than their predecessors.
While points-based systems were once enough to capture customer attention, that’s no longer the case. Both Millennials (those born between 1981 and 1996) and Gen Z (1997 to 2012) value more innovative reward options. It’s up to bars and restaurants to embrace modern loyalty strategies in order to attract and retain these customers.
Today, we’re discussing some of the revolutionary ways to increase engagement with Millennials and Gen Z and highlighting a few brands that take their restaurant loyalty program to the next level.
We’ll cover:
What Millennials and Gen Z value in a loyalty program
Millennial and Gen Z patrons expect more from loyalty programs than earlier generations. Here are a few aspects to prioritize in order to attract–and hold–their attention.
Experiences over discounts
Gen Z (and Millennials, to a lesser extent) tend to prioritize unique experiences over basic price discounts. If your restaurant loyalty program starts and ends with a tiered point system, you won’t have the same appeal to younger generations.
The fear of missing out, also known as FOMO, is a great motivator. But in a study released by Credit Karma, dining out was the activity the most respondents were willing to give up in order to indulge in other entertainment. Millennials and Gen Z were the most willing at 33% and 35%, respectively.
So, what if you could capitalize on that FOMO and keep folks eating at your establishment at the same time?
As it turns out, the possibilities are endless.
Consider offering your loyalty members early access to new menu items or inviting them to exclusive events, like drink tastings, that are only available to top-tier customers.
As your regulars rack up points, they can work their way up the ranks to a coveted VIP status. Depending on your business’s set-up, they might be able to skip the line for a table or have access to priority parking or the best seats in the house.
Personalization matters
Most Gen Zers and many Millennials grew up with technology in their back pocket. It’s no secret that between mobile apps, social media, and credit card purchases, our data is constantly being collected and analyzed to help businesses improve their bottom lines. Data collection is simply part of life in the 21st century, so you may as well put it to use.
Microtargeting and personalization play a significant role in digital marketing. When your POS system is fully integrated with your restaurant loyalty program, you can use your customer data to provide hyper-personalized rewards that will make your guests feel seen and heard.
Take incentives beyond basic demographics by offering rewards targeted to, say, adventurous eaters, gluten-free guests, or vegan visitors. Do you have customers who always show up after their Wednesday shift? Send an invitation for Wine-Down Wednesdays and watch your customer engagement soar!
Social and cause-driven
Deloitte’s 2022 Gen Z and Millennial Survey found that both age brackets put a heavy emphasis on societal and environmental issues. Many prioritize working for companies that give back and spending their money at businesses they know have the same values.
Additional studies show that Millennials are the most eco-conscious group and are more likely to reserve purchases for sustainably produced goods. On the other hand, Gen Z trends show more interest in organic foods, plant-based proteins, and clean-label products.
When these generations see businesses acting with intention and making socially and environmentally sound decisions, they’re more likely to buy.
Innovative loyalty program ideas
Looking for ideas to capture customer attention with your restaurant loyalty program? Here are a few ideas to consider.
Gamified rewards
Restaurants should appeal to the playful side of Millennials and Gen Z to increase engagement with these generations, and there are plenty of ways to gamify your restaurant loyalty program.
A points-based system is a step in the right direction, but if you can find more ways to make it fun, you and your customers will reap the rewards.
One option is to introduce challenges, competitions, or quizzes that encourage engagement. Rewards for these activities can be additional points and experiences or progress bars and honorific badges. As they rise in the ranks, they’ll be motivated to gain access to the next award.
Community building
It’s possible to turn your restaurant loyalty program into a virtual clubhouse where faithful fans can stay up to date on exclusive perks and events. It can be the place to get insider access that isn’t available to the general public. After all, everyone wants to feel like a VIP member, and this is a great way to appeal to that status-seeking side of your customers.
Your app might include secret menus, information on elite events, or passwords for private tastings and other restricted activities.
Partnered experiences
Take your loyalty program beyond the meal by partnering with local businesses to offer exciting experiential rewards. You’ll need a good idea of your customer base to provide collaborations they’ll want to participate in, but once you know what excites them, you can cater to the masses.
For example, you might join forces with a local music venue to offer your top-tier members exclusive access to certain shows. Alternatively, you can team up with other nearby establishments to host a bar crawl for your frequent customers.
Again, there are many marketing possibilities. It’s all about knowing what your customers want.
Charity integration
You already know that Millennials and Gen Z appreciate businesses with strong principles, and you can use your restaurant loyalty program to show you care.
You might give customers the opportunity to donate points to worthwhile causes. For each point they donate, your establishment will give to a charitable group. You can even let your guests choose from a list of organizations that align with your business’s core values. Or, you might allow customers to share rewards points with friends and family.
Another way to integrate your ethos into your loyalty program is by offering reward points for things like bringing in reusable containers for a recycling program.
Technology to enhance loyalty engagement
Utilizing technology is a no-brainer when it comes to increasing engagement with Millennials and Gen Z. After all, tech is ingrained in nearly every aspect of daily life for these generations, and if you aren’t making the most of it, you can expect to fall behind.
Mobile-first is a must
Mobile access isn’t just a trend for Millennials and Gen Z. It’s a necessity. While the younger generation are digital natives, Millennials spend more time on their phones than any other age bracket. When you consider that restaurant and third-party delivery apps account for about 7% of daily use, it’s worth investing in a quality mobile app for your restaurant loyalty program.
Most consumers are enrolling in multiple programs, with Gen Z and Millennials spearheading the trend, averaging 4.4 and 3.6 programs.
A seamless restaurant loyalty app experience will allow your customers to browse your menu, place orders, and pay, as well as track rewards points and communicate with your business. It should also keep them updated on events, new menu items, and any other exciting news about your establishment.
Push notifications done right
A collaborative study by PYMNTS and Amazon Web Services found that, overall, customers want to receive communications through an average of 1.7 channels. These can be via email, snail mail, texts, website popups, ads on social media, and push notifications from mobile apps. However, you’ll only see diminishing returns once you hit two or more platforms, so it’s essential to plan strategically and avoid going too hard with notifications.
That said, push notifications are a great way to prompt loyalty members to visit your site. Consider sending personalized messages to guests who haven’t visited in a while with a discount for their next order, notifying them about limited-time offers, or reminding them about exclusive perks during their birthday month.
Remember, it’s easy to overdo it on notifications, but if you limit communications and use them sparingly, the results can exceed your expectations.
Leveraging social media
Social media presents an excellent opportunity for unconventional advertising. You can turn your most loyal customers into micro-influencers who are excited to share their experiences with your brand with everyone they know.
One option is to offer exclusive experiences like food and beverage tastings to your top-tier members in exchange for high-quality social media content. This might include videos of the experience and their reviews of the food or other curated content. They can tag your restaurant and give outsiders a glimpse of the good life as a rewards member.
This strategy taps into the FOMO we’re all trying to satisfy. It also helps people recognize your establishment as an active member of the community. When friends and family see what they’re missing out on, they might be more inclined to sign up.
Loyalty program inspiration: Restaurants winning with Millennials & Gen Z
If you want to learn how to maximize your restaurant loyalty program, check out a few establishments that have paved the way with innovative ideas.
The hipster hangout
Velvet Taco is a popular Tex-Mex chain that prioritizes fresh, high-quality ingredients and innovative culinary creations. According to their website, this taco shop is where “anything goes meets the art of the possible.”
And you can say the same for their customer loyalty program.
This restaurant’s mobile app, the Velvet Room, is a one-stop shop for their tasty treats, swag, and much more. When you sign up and link a credit card, you automatically receive free chips and queso with your next order and a complimentary slice of red velvet cake on your birthday.
The first level is the Bad Ass tier. Once you spend $200, you’ll gain access to their secret Backdoor Menu. After spending $400, you’ll become a Hard Ass member and receive four mystery gifts throughout the year.
But the real difference comes to the top five members throughout the country. Each year, Velvet Taco offers the chance for these big spenders to fly to Dallas with one friend and attend an exclusive Weekly Taco Flavor (WTF) tasting.
The cause-focused cafe
B.GOOD is a farm-to-table chain featuring bowls, burgers, smoothies, and other wholesome fare in the Boston area. In 2019, they launched their signature restaurant loyalty program, B.GOOD Rewards.
It includes a standard points system in which 50 points get you a free side, 75 points earn a complimentary smoothie, and 100 points equal a free entree. Additionally, they offer Double-Point Days, a free meal on your birthday, and other expected perks.
However, there’s a twist.
Customers can donate their points to 25 community partners instead of swapping them for free food. Brent Feldman, B.GOOD’s Chief Marketing Officer, said, “…Connecting communities and inspiring good is also a key part of what we do… It was a no-brainer to give our customers the opportunity to help drive positive social and environmental impact through a donation feature.”
The unexpected big brand
Back in the ‘90s, Pizza Hut was the place to be on a Friday night–at least for families with young children–but as competitors like Domino’s increased in popularity, the Hut’s fandom began to wane. By 2016, the chain was struggling, but things started turning around the following year when they released their mobile app.
Hut Rewards allows customers to earn unlimited points. You can even score a free pizza with a single order. The interface is simple, intuitive, and user-friendly. You earn two points for every dollar spent, and those points quickly add up for free pizza. Additionally, you get access to birthday specials and exclusive offers through the loyalty program.
The mobile app changed the game for Pizza Hut, and today, about 80% of their total orders are placed online or on the app.
Conclusion
Understanding the needs and desires of Millenial and Gen Z customers is key to creating a restaurant loyalty program they’ll want to join. These programs are about more than digital rewards. They help build community among your clientele, show that your business is willing to pay it forward, and, of course, offer great deals that will keep your Millennial and Gen Z customers coming back for more.
However, it’s essential to separate yourself from the crowd. Innovation and out-of-the-box thinking will help you stand out among the masses.
CAKE’s POS-integrated loyalty system can help you hit the mark with the younger generations and earn their repeat business. Contact us today for a free demo!
