There is no doubt that customer retention is not just important but a necessity to sustain your restaurant business. According to a study, retaining customers can actually increase your profits by 25% or even more. Ofcourse, it makes sense to put in more efforts to nurture existing customers. Not to forget loyalty programs are one of the best ways to make your customers come back to your restaurant.
However, there have been cases where the loyalty program failed miserably. To ensure that your loyalty program is loved by your customers, check out the do’s and don’ts of creating and executing a loyalty program for your restaurant:
Identify The Right Program
Firstly, you need to understand that loyalty program means that you will be giving freebies that means cash burn. Before you roll out your loyalty program, understand your business’s financial profile and then decide the basics of your loyalty program. For example, decide that offering discounts on the customer’s visit would be more beneficial or whether you can offer discounts based on spends.
Make The Best Use of Data
What differentiates a good loyalty program with the best one is the effective use of customer data. After you are done creating the program model, understand your customer. For example, if you are creating a loyalty program based on spends, you need to check the average bill of your customers. Accordingly, decide the limit of the spends on which you will give discounts or cashback or any other freebies. You can also create multiple loyalty programs for your customers. For this, we would suggest you to go for a loyalty program platform that lets you create and manage multiple programs easily.
Keep It Easy
Nobody likes a complicated loyalty program. While strategizing for the loyalty program, ensure that it is not only easy to join but your customer is able to understand it easily. A complicated loyalty program can do worse than good for your brand. One such example was of Starbucks. In 2016, they made a small change in their super successful loyalty program, where the shopper had to spend more to get rewarded. In their older program, the customer had to spend approx $48 to get a free coffee but after the change, the customer had to spend $63.50 to receive the same reward. Due to this, their buzz score dipped by 50% within 8 days. (Source)
Inform Your Staff
Even the most appealing and cost-effective loyalty program might not work if not well executed. Before you roll out your loyalty program, inform your staff about the same. Ask questions and answer them immediately. Don’t forget to ask your customers about your loyalty program through the feedback form to understand its impact instantly.
Communicate. Communicate. Communicate.
There are high chances that your customer might be enrolled in other restaurant’s loyalty program along with yours. To ensure that they don’t forget your restaurant, send them reminder messages about the loyalty program. Try to create an urgency to attract more customers. However, don’t bombard them with the same otherwise they will lose interest.
Don’t Make It Boring
Try to introduce new and different benefits that attract your customers at a reasonable cost. What we would suggest is to start small if you are trying something new. This way, you can understand its result as well as its impact on your business while not taking bigger risks. Don’t forget to analyze data that supports your business.
The tried and tested a way to drive customer engagement is by gaining your customer’s loyalty. With this, you can seize opportunities to build a long lasting relationship with your customer, build your brand and drive market growth.