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Why Your Loyalty Program is Not Creating Loyal Customers?

As consumers, haven’t we all gone crazy over black Friday sales and discount coupons on our favorite brands? That’s exactly what your customers are seeking when they visit your restaurant for their favorite food! Hit their right spot, and they become loyal to your brand forever. And choosing the right loyalty program is your way to go!

In 2016, the restaurant market was worth more than 3.09 lakh crores, and the food-service industry is expected to grow to a whopping 5 lakh crores in 2021, at a Compound Annual Growth Rate (CAGR) of 10%.

In a booming market, losing customers is a cold pie nobody wants to eat. Given that, retaining customers can  actually boost profits by 25%, which makes it doubly crucial to retain existing customers. This is where the loyalty programs sweep in.

Steps to create an engaging loyalty program:

Loyalty programs have proved to be a good way to make customers visit your restaurant over and over again. They have to appeal to the customers on a personal level.
The tech-savvy generation might not be quite thrilled with the coupon loyalty programs as much. So how does one build an upgraded loyalty program that appeals to the customers and drives sales?
As per the statistics of Aron Allen and Associates, coffee giant Starbuck’s ‘My Starbucks Rewards Loyalty Program’ was launched in 2010. It later added a digital component and went on to garner $1.2 billion in customer funds as of the first quarter of 2016. In 2017 the second quarter rewards accounted for 36 % of US Starbucks sales.

Identify the Right Program

Loyalty programs impact profits and need to be structured in a way that suits your business model. Be it visit based, spend based, or a combination of the two.

The QSR Magazine reports say that Panera introduced a tech-driven ‘integrated guest experience’ at an outlay of $42 million in 2012. The tech boosted sales, reduced the food receiving time to less than five 5 minutes from 6-9 minutes, and saved 1 – 4 minutes per order.

Make the Best Use of Data

There is nothing like the effective use of customer data to make a good loyalty program work great for your business.
Guest and Reserve apps, available in the market, enable you to deep-dive into the customers’ past visits and orders, their preferences in terms of dish preparation, seating arrangements, and so on.
You can also tag your customers in your system so that the arrival of a priority customer does not catch you on the wrong foot. Customers who visit your restaurant also receive promotional offers and feedback communications.
These apps have the analytics feature to generate insights on average waiting time, optimal table layouts, and more to help your brand get a competitive edge.

As per the statistics provided by the National Restaurant Association, tech is the rage for millennials with 32% factoring it in their choice of QSRs and 28% factoring in for their choice of full-service restaurants.

Keep It Easy with Feedback Apps

Feedback Apps cut out paper hassles and let you focus on the feedback that is valuable for your business. With these apps, you can get better insights on customer preferences. A bad experience can easily be neutralized on the spot with a great feedback app.
A contemporary, seamless feedback app integrated with your loyalty program will be simple, highly customizable, and give you insights on customer behavior for smarter marketing. Further, it will enable you to enhance the customer experience in different ways to win positive online and social media reviews.

36% of diners factor in information from review sites like Trip Advisor and Yelp, while 34% use social media information in their decisions.

Keep Your Staff in the loop

Well executed loyalty programs have one thing in common – a well-informed staff. Even if your loyalty program uses all the bells and whistles that go with the app, you just cannot afford to miss out on the human element.

So, before you roll out your loyalty program, take your staff into confidence, and seek their inputs. Your staff may be able to give you amazing insights into various aspects of customer behavior, preferences, etc., and their suggestions might prove to be extremely valuable for the success of your loyalty program.

Reward Programs are profitable for every business

Reward programs offered by restaurants drive traffic, track customer spending habits, help delight existing customers, and convert them to long-term customers. Be it a massive multi-outlet business or a small stand-alone one, every restaurant should offer a loyalty program to accelerate their business through repeat customers.

A well-planned loyalty program will let your customers relax, knowing that they’ll always earn more rewards – without taking a hit to their wallet. And for you, you can rest assured that your existing customers will be your everlasting ones.

 

Customer Loyalty

Through Thick And Thin: How to Nurture Customer Loyalty That Lasts

Loyal Diner: ‘Hey, do you want to go have waffles? I have a coupon with 50% off desserts’.

 

Prospective Diner: ‘That’s a pretty generous discount. You must be a regular visitor at their restaurant’

 

Now that’s a delightful conversation clearly highlighting the benefits of customer loyalty programs.

With competition brewing on all sides, it is important to engage your customers by giving them a positive restaurant experience while offering them perks that show you care about them. After all, you are 50% more likely to sell to a repeat customer than a new one. In a study done in the US by the National Restaurant Association, 57% of adult consumers are more likely to visit restaurants that offer loyalty programs. We feel that metric is probably quite close to the Indian scenario. Doesn’t it make sense to emphasise nurturing our relationship with our existing customers over acquiring new ones?

 

There is always a potential pool of customers, but how would you target the ones that would remain loyal to you?

 

Identify and engage

 

 

According to statistics, chances of a customer being loyal to your restaurant increases by 80% if they return for a third visit. With consumer sentiment shifting constantly, it becomes all the more necessary to make sure their experience is authentic and personalised which will, in turn, increase your chances of gaining loyal customers.

 

A simple text message has proven to be useful in driving customer traffic to restaurants. An SMS doesn’t just limit itself to fancy discount coupons, but is an effective medium in forming a communication between your diners and your restaurants. Customers are over four times more likely to open an SMS than an email, making it the top choice for customer service.

Plus, research shows that 91% of people keep their mobiles closeby throughout the day, and most of them read their text messages.

 

The success of your restaurant, thus, lies in identification, engagement and customer retention. A more personalised experience, based on understanding of the basic customer needs and imbibing your restaurant with attributes for customer satisfaction will convert your satisfied customers into devoted ones.

 

Incentives and reward programs

Did you know loyal customers are worth up to 10 times as much as their first purchase?

If you truly want to build a loyal customer base, offering perks and incentives to your diners is one way of keeping them happy.

 

One good example of this practice is the airline and hotel industry, who reward points to their frequent customers which later translates into some kind of discount, gift card and other special treatments.That’s why passengers prefer flying a particular airline or staying at a hotel offering them the maximum points.The much popular coffee chain, Starbucks, in addition to their reward program, engages the customers to use their app to place order, pay and even access streamed music. With earning stars being a part of the Starbucks loyalty reward program, customers can later redeem these stars as rewards like free coffee.

 

Gain loyal customers with a problem-solving approach

Who isn’t looking for a loyal customer? With technology, you can reach out to them in ways that weren’t possible before. A usual discount offer has no charm anymore and customers expect a specifically crafted and personalized plan. Personal gestures in the form of birthday and anniversary cards and wishes, or personalised gift cards on special occasions, can delight them and improve the probability that they will come back. Restaurants everywhere need to engage in this practice as 80% of your future revenue will come from 20% of your existing customers.

 

Divide and delight

Smart and targeted communication is another key approach that helps in creating opportunities and experiences for the customers.

 

Segregate your customer base depending upon their needs and use. There are always a bunch of spenders, looking for quality service, then there are the loyalists, who’d love you for your brand value and would stay loyal, no matter what. The ones who do not like burning a hole in their pocket and are big on savings would hunt you for your amazing deals. Strategize to make sure you have something to offer to each category.  

 

inResto Loyalty

This service that caters to all of these segments of your customers and gives you the option to appreciate each of them based on their preferences and behaviour. The loyalty program has three avenues:

  1. Visit based: Offers that include a free starter or a beer after 3 regular visit to the restaurant.
  2. Expenditure based: Earn 1 point for every Rs.100 spent and redeem all collected points at a later stage as discounts, gift cards or coupons.
  3. Punch Card Based: A coffee on the house after you have bought 4 of them.

 

Conclusion

Dining, over the years, has turned into a personalized experience, thus making customers an integral and crucial part of the restaurant business. It can cost 5x more to acquire new customers than to keep current ones, so retargeting campaigns and loyalty programs are essential in a robust, cost-effective growth plan. This makes inResto Loyalty an essential tool that can help you nurture stronger relationships with your customers, thereby helping you build consistency and confidence, delighting them at every turn. Plus, the controls are in your hands. You take the calls. Want to find out more about the product? Click here.