Building and maintaining customer loyalty is a critical goal for every business in the restaurant industry, whether you own a small cafe or an enterprise chain. The retention of customers is essential for improving your restaurant’s financial success.
So, the question arises: how can you effectively secure customer loyalty while also boosting revenue? The solution is restaurant loyalty programs. The 2023 Loyalty Report from Paytronix revealed that quick and full-service active loyalty members boasted 5%+ increases in check size as compared to non-loyalty members.
Restaurant loyalty programs are crucial because they cultivate loyalty, increase revenue, and give valuable insights into your customer preferences. This information gives restaurant owners the upper hand, allowing them to tailor their offerings and strategies toward their guests and plan for long-term success.
In this blog post, we’ll explain what restaurant loyalty programs are and how they work. We’ll also share some creative ideas for promoting these programs and give tips on designing a successful strategy.
What is a restaurant loyalty program?
A restaurant loyalty program is a business marketing strategy implemented by restaurants to encourage repeat visits from their customers. These programs typically involve offering rewards and incentives to customers who frequently dine at the restaurant. Restaurant loyalty programs often require customers to sign up and participate, enabling the restaurant to collect valuable insight into customer preferences, dining habits, and contact information.
Restaurant loyalty programs benefit both customers and businesses in various ways.
For customers, they provide tangible rewards, such as discounts, free items, or exclusive promotions, which can significantly enhance the dining experience and save money. Customers who frequently visit the restaurant can accrue loyalty points or rewards that make them feel appreciated and valued, encouraging them to return.
On the business side, loyalty programs are an effective tool to increase revenue and customer retention. They help restaurants collect data from the point of sale (POS) and insights on customer behavior, enabling them to tailor marketing efforts, personalize offerings, and engage with customers more effectively. By encouraging repeat visits and building a loyal customer base, restaurants can achieve long-term sustainability and profitability in a highly competitive industry.
How do restaurant loyalty programs work?
Restaurant loyalty programs are designed to incentivize customers to return to a particular dining establishment by offering a variety of rewards and benefits. The sign-up process is typically straightforward and can be done in person or via your mobile device.
Below are the seven steps your customers will go through when they opt-in to join your restaurant’s loyalty program and handle their account:
- Opt in and provide contact info
This typically includes personal details like name, email address, and phone number.
- Receive loyalty card/digital account
Participants will receive a physical loyalty card or gain access to a digital one via a mobile app or website.
- Accrue points
Participants accumulate points based on spending. These points contribute to the loyalty rewards.
- Check-in or scan
Some programs require customers to check in or scan their loyalty cards during each transaction. Integrated loyalty programs with your POS allow guests to check in through email, phone number, or easily via credit card swipe.
- Redeem rewards
Participants can redeem their accumulated points for rewards like discounts, free meals, exclusive offers, and more.
- Receive notifications
Diners can opt into receiving notifications through email, mobile app, or other channels to stay informed about special promotions, events, and updates.
- Track points and rewards
Whether it’s a physical card or online, customers can track their earned points and rewards through their loyalty account.
5 easy restaurant loyalty program promotional ideas
Promoting restaurant loyalty programs with creative and effective strategies can help you attract and retain customers. Here are five innovative ways to promote your loyalty program:
With these restaurant loyalty program ideas, your restaurant is sure to gain traction and build that customer base. Industry leaders like Panera and Chipotle provide excellent examples of effective loyalty programs.
In 2022, Panera unveiled its Unlimited Sip Club, the first-ever unlimited beverage subscription for all self-serve drinks. For $11.99 a month, consumers can have unlimited access to coffee, tea, fountain drinks, and more. Recently, they’ve offered a 6-month digital subscription to The Washington Post and two months of free drinks when you sign up.
Chipotle is another leader in loyalty programs. For Halloween, they have a “Boorito” special promotion for reward members. The Boorito promo allows members to receive one entrée for $6 when using a promo code at digital check-out or on the mobile app. The promotion is valid from October 31st, beginning at 3:00 p.m. local time, through restaurant closing.
How to design an effective restaurant loyalty program
Incorporating best practices into your restaurant loyalty program is crucial for attracting new customers and retaining existing ones. We’ve outlined some of these top practices and tips to boost sign-ups and enhance engagement.
- Clearly define the benefits -> Make sure your loyalty program offers clear and tangible rewards. Clarity is key to attracting and retaining participants.
- Invest in a customer-facing display-> Utilize digital displays connected to your POS that can prompt customers to sign up when completing a transaction.
- Make programs accessible -> Allow customers access online, on mobile, and in-person at the register or table. Some programs use physical cards, but the program should be able to award point seven if the customer forgets it, whether it’s through phone or email.
- Personalize the experience -> Tailor rewards to individual customer preferences, for example, birthdays. This creates a more engaging and customer-centric loyalty program.
- Promote your program with email marketing -> Use email marketing to regularly update members about special offers, new rewards, and exclusive events.
- Make it easy to join -> Streamline the sign-up process, whether that’s through a mobile app, QR code, or a simple form. A hassle-free enrollment process encourages participation.
Serve up a restaurant loyalty program with CAKE
With solutions like CAKE Loyalty, restaurants can easily increase repeat visits and build long-term relationships for your business, all in one place. CAKE Loyalty seamlessly integrates with its product suite, enabling members to utilize their accrued points for both online and in-person orders.
CAKE’s solution also provides restaurants with valuable insights into guest behavior through the admin reporting module, allowing for data-driven decision-making. Another big advantage is that customers can effortlessly earn and redeem loyalty points with a simple credit card swipe, eliminating the need for manual data entry or the use of phsyical loyalty cards or member ID scans via mobile app.
In summary, restaurant loyalty programs play a pivotal role in securing customer loyalty and boosting revenue streams for businesses. Get ahead of the competition and serve your customers with a restaurant loyalty program with CAKE. Get yours today!