Designing & Implementing a Loyalty Program for Your Restaurant
Want to build your repeat business? One of the best ways to keep customers coming back is by implementing a loyalty program.
The idea behind loyalty programs is simple: customers get incentives and/or freebies for repeat visits. The strategy is effective — as many as 80% of Americans are part of at least one loyalty program.
Any restaurant can offer a loyalty program, from fine dining restaurants or to fast-casual establishments. In this post, you’ll learn all about loyalty programs — including how to implement one that works for your restaurant.
Put simply, a restaurant loyalty program is a program that rewards customers for patronizing your establishment. A loyalty program tracks customer spending and/or visits that are logged digitally or with loyalty cards or punch cards. In return, customers get free or discounted food or drinks, or access to special events and/or offers.
Why Implement a Loyalty Program?
Here are just a few reasons why you should consider implementing a loyalty program:
- People love free stuff (even if it’s technically not free). The promise of a reward in the future can encourage repeat visits, which means more repeat visits and potentially more sales for your restaurant.
- A loyalty program can also help transform a first-time customer into a regular. Regular customers are a huge part of your restaurant’s income. Regular customers also help create a positive sense of community for your restaurant.
- Loyalty programs can provide your restaurant with a powerful marketing opportunity. Be sure to advertise your loyalty program on signage or with a QR code to attract attention, and be sure to mention it in any advertisements or marketing materials.
Ready to launch a loyalty program? Here are some tips to help ensure a successful launch:
Choose the Right Loyalty Program for Your Restaurant
Loyalty programs come in all shapes and sizes, but they mainly boil down to two key approaches: amount-based and visit-based. Here’s a breakdown of each:
Amount-based: An amount-based loyalty program works by giving customers points based on purchases. In a very simple format, customers might get one point per dollar spent. As points accumulate, customers can either apply them for a discount on visits, or continue saving them for later.
Visit-based: A visit-based loyalty program works by rewarding customers for repeat purchases. For example, you might track sandwich purchases with a punch card, and customers get a free sandwich every tenth (or number of your choosing) visit.
Either of these options can work for any type of restaurant, but take the time to consider what might suit you best.
For instance, if you run a high-end restaurant where people might only visit a few times per year on special occasions, an amount-based program might be more effective than a visit-based program. If you run a popular lunch spot, a visit-based loyalty program might be the best solution for you.
Keep it Simple
Regardless of what type of loyalty program you choose to implement, keep it simple. Don’t make it too complicated, and don’t involve too many steps. It will only confuse customers, and they could lose interest in your program.
For a good example of a simple loyalty program, take a look at Starbucks’ popular program, Starbucks Rewards. Once a customer enrolls, the program is simple: for every $1 spent, they get one or two rewards points (called stars). As the points accumulate, they can be applied to purchases or saved for later.
Not ready to make the leap to an app-based loyalty program? No worries. Simple punch cards or loyalty cards will do the trick — they’re easy to understand, with no learning curve required for your customers.
Educate Your Employees
According to the 2020 Bond Loyalty Report, loyalty programs can be up to 47% more successful with the right representation.
Simply put, that means that you and your staff need to “sell” the loyalty program to really make it work.
Take the time to train your staff about how your loyalty program works, and encourage them to suggest it to your customers. Some restaurants even offer bonuses or incentives to employees who have a high amount of loyalty program sign-ups.
What do employees need to know to effectively sell your loyalty program? Here’s a quick reference:
- What the program is (visit-based or amount-based)
- How the program works
- How rewards are delivered
- The direct benefits to customers
- Answers to frequently asked questions
- Any other selling points or benefits included (invites to special events, etc)
Go Beyond Rewards
Want to take your loyalty program further? Offer value that goes beyond just rewards.
For instance, you could send a newsletter to loyalty program members. In that newsletter, you have the opportunity to connect on a deeper level while simultaneously promoting your products and any specials.
For example, the multi-city restaurant Momofuku’s “Peachy Keen” newsletter offers recipes and food commentary from the chain’s famous foodie owner, David Chang. This type of connection can help increase brand awareness in ways that could further your loyalty program’s success.
Another idea? Extend invites to loyalty program members-only events. Not only can offers like this make people feel special, but they can increase their interest and loyalty to your restaurant!
Keep Them Coming Back…
Restaurant loyalty programs are a win-win proposition for restaurants and customers alike. From a restaurant standpoint, they offer a community-minded way to build your business. From a customer standpoint, there’s the promise of free stuff as a reward for repeat visits. When you consider the added benefits of increased brand awareness, customer connections, and a potential sales boost, it’s well worth taking the time to consider a loyalty program for your restaurant.
Have you ever offered a loyalty program? Share your experience!
About the Author:
Mark Plumlee is a copywriter who has helped restaurants and small businesses grow and define their brands.