Dining loyalty programs are an important factor in a restaurant’s success. Data clearly shows the benefit to retaining and engaging with loyal customers: It costs seven times more to acquire a new customer than to retain a current one. In addition, engaged loyalty program members will spend five times more than non-engaged customers and will visit ten more times per year (Rewards Network data, 2012).
Not all dining loyalty programs are created equally, and these results are not necessarily typical for just any type of dining rewards program. When choosing between dining loyalty programs, ask yourself these five important questions:
1. How complicated is it for my customers? Customers belong to an average of 21.9 loyalty programs, but are only active in 9.5, according to a 2013 Colloquy report. The easier you can make it on your customers, and the less you ask of them for their participation, the more likely your dining loyalty program will make the cut. The more cards they have to carry and manage, the less likely they will use them.
2. How complicated is it for my staff? Your staff should be fully aware of any coupons, cards or offers your customers present to them. The more complicated the loyalty program is for your customers, the more training you will have to provide to your staff. Keep it clean and simple for engagement on both sides.
3. How will I know if it’s working? Counting how many free entrees you gave away will tell you a lot of things, but it probably won’t tell you how well your loyalty program is working. A successful dining loyalty program will offer rewards of choice that incentivize not only more visits but also more spend in order to earn, and should provide in depth data to support trends, frequency, spend and customer feedback, as well as competitive benchmarks.
4. What can I learn from my customers? Customer feedback is an essential component to customer loyalty. They will tell you why they love your restaurant or why they won’t come back. Give them a safe and anonymous way to tell you these things and be open to what you will hear. It’s a great vehicle to understand trends, train (or re-train) staff and improve upon operations.
5. Can I communicate with my customers? The opportunity to respond to feedback could be the difference between a customer who never returns or one with whom you forge a loyal relationship. Responding to negative feedback gives you the opportunity to directly and personally address an issue and offer a way to make up for it, potentially winning back an otherwise unhappy customer. Also, responding to positive feedback shows a personal interest in customer experiences and helps to create dialog and engagement on an individual level.
