3 Reasons Your Restaurant Needs a Customer Loyalty Program

February 4, 2020

By Adèle Richardson at Paystone

 

Even if you’re a really great delegator, running a successful restaurant likely keeps you fairly busy.

You might feel like your plate is too full to consider new marketing initiatives or customer retention strategies. That said, starting an automated customer loyalty program is one of the easiest ways to increase your cash flow and profitability. In fact, a 5% increase in customer loyalty can improve your business’ profitability by 75%. Not bad, right?

What is a loyalty program, anyway?

 

A customer loyalty program is a structured, long-term marketing plan designed to incentivize one-off customers to become regulars. Essentially, when you reward your highest-spending and return customers, you’re building a long-term relationship with them based on loyalty toward your brand.

Customers who sign up as members of your loyalty program receive a plastic or digital loyalty card, and when they fill out their member profile, you learn their name, contact information, and birthday. Every time they make a purchase at your business, they collect points, and you gather more information about them, such as their favourite menu items.

With this data, you can send your members more personalized communications and offers based on their spending preferences, which encourages them to visit your business more often — and spend more.

But that’s not the only way that a rewards program can grow your restaurant’s profits:

Reward programs increase word of mouth referrals and bring in new guests.

 

How many times have you tried a new restaurant based on a friend’s recommendation or steered clear of a dining spot because a family member had a bad experience there? For restaurants, online reviews and customer recommendations can make or break your business.

Happy and loyal customers are more likely to recommend your restaurant and share photos and testimonials. Plus, brand ambassadors will help to build awareness of your brand and grow your customer base.

Once you attract new guests, they’ll be more likely to return if you have a rewards program in place. Specifically, customers are 79% more likely to return and 86% more likely to remain loyal to a restaurant with a loyalty program compared to one without.

Find out how to ace your online reviews.

They generate higher ticket amounts.

 

True or false: Loyal customers tend to spend more than customers who are not enrolled in a loyalty program?

It’s true. Loyal customers spend up to 66% more than other customers, and 65% of loyalty members will add items to their order to make sure they reach the next tier of rewards. Not only does this translate to higher sales and bigger tips for your servers, but it also gives your customers the opportunity to test out new appetizers and drinks, which might become their new favourites for future visits.

In addition to giving your members points and discounts, if you choose to also offer birthday perks, you’ll be able to cash in on all those birthday dinners. A free birthday entrée or dessert won’t cost your restaurant much, but the person celebrating is likely to bring in a group of friends and family to dine with them.

They help you collect actionable customer data.

 

Finally, a loyalty program can give you valuable insight into your members’ buying habits that you can use to grow your business and your customers’ loyalty.

Depending on the type of loyalty program that you decide to implement, you’ll be able to gather all kinds of data, such as your customers’ favourite dishes, their average purchase amounts, how frequently they visit you, and more.

With this information, you can start sending your customers better promotional offers and optimize when you send them out. For example, if you know that certain customers typically dines with you every two weeks but they haven’t visited for a while, you might be able to send them a promo email to entice them to return to your business. You can also fill empty seats by sending out promotions during slow periods.

The best part is that with modern loyalty software, you can set and schedule automated promotions, and the system will handle the rest. Say goodbye to time-consuming, manual mailing lists!

 

 

While setting up and maintaining customer rewards program might sound intimidating, it can be surprisingly simple and inexpensive if you pick the right provider for your business needs.

Learn more about Paystone’s loyalty solutions or the benefits of launching a loyalty and gift card program.

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