There’s a lot of doom and gloom these days in business-related chatter about loyalty programs. Big picture: pundits talk about the good old days, lamenting the lack of loyalty to any brand in today’s market. It’s true, to some extent, that a larger, more competitive landscape exists in today’s economy than we’d seen in previous decades. More choices naturally offer more opportunities to move from one brand to another.
This talk cascades down into the viability of loyalty programs to fulfill their core purpose: to attract and retain customers who will spend more and drive business for years to come. If consumers are so ready to jump from one brand to another, how can any business expect to build a sustainable brand?
Well, despite the naysayers, the reality is loyalty programs in the United States continue to thrive and bring opportunity to businesses — particularly those in the restaurant and hospitality industries — to capture consumer attention and reward purchases consistently over time.
Here’s a few numbers you need to know about how loyalty programs are performing — from industry thought leader Colloquy’s 2017 Loyalty Census Report and more — and why having a great one on hand for your customers is the key to successful marketing.
3.8 Billion
loyalty program members in the United States alone in 2017, which represents a
15%
growth in number of consumers participating in loyalty programs year-over-year, but…
54%
of all memberships are inactive, primarily because
28%
abandon their loyalty program without ever having earned a single point or mile.
It’s important to choose a loyalty program platform for your restaurant that has a track record for success, offers something that customers actually want, and can provide a consistent experience for your diner, above all else. This is especially important for businesses like restaurants that have the slimmest of profit margins and rarely have a significant marketing budget to spare.
Why do loyalty program members stay or go?
53%
of current loyalty program members report that the top reason they participate is “ease of use.”
Having a solution for rewarding your customers has to be turn-key both for you and for them. That’s why loyalty programs that employ card-linked offers like Rewards Network are so successful for restaurants.
Set-up is completely easy for the business owner and requires no special training or equipment. Customers simply link their credit or debit card to their loyalty program of choice and dine. No membership cards for servers to check and nothing customers need to remember in order to receive their rewards.
57%
of those who left loyalty programs say it’s because it took too long to build up rewards, and
53%
said that the program didn’t provide the rewards they were interested in.
Employing a loyalty program that offers the choice of airline miles, hotel points, cash back, charitable contributions, savings on fuel, or other personal benefits — without you having to manage any of it as a business owner — is key to driving more interest in participating. And the more customers that participate, the more traffic you’ll see as a restaurant connected to the big brands that offer these rewards.
53%
of U.S. consumers switched brands after experiencing poor service, but
80%
of those switches could have been avoided through better resolution of the problem.
Increased competition may breed customer attrition at times, but every restaurateur knows that quality service is key to return visits — even more than the food itself. Employing a loyalty program like Rewards Network that incorporates direct engagement with your customers in the form of verified reviews can help bridge that gap when things do inevitably go astray.
The opportunity to make good, even after a customer has left your establishment, is priceless in today’s competitive environment.
Do people still trust loyalty programs?
96%
of Millennials and Centennials expressed a willingness to complete surveys related to their program membership.
51%
of loyalty members still trust their loyalty program with their personal information, despite an atmosphere of distrust in institutions.
Key to this phenomenon is the trustworthiness of the brand involved. What builds that trustworthiness? Recognition, longevity, lack of disruption caused by hackers and fraud, positive PR and public perception.
The loyalty programs Rewards Network has exclusive partnerships with are some of the biggest and best-known brands in the United States, and have been for years. From American Airlines and JetBlue to Hilton, Shell, and Caesar’s Entertainment, Rewards Network works with brands your restaurant can feel good about associating yourself with. And your customers will, too.
Want more information on how Rewards Network can launch your loyalty program and drive a consistent 4-6% of monthly revenue to your bottom line?
Read more
Loyalty program data compiled from:
Colloquy “2017 Colloquy Loyalty Census”
CrowdTwist “Generation Z Vs. Millennials: The Changing Landscape of Loyalty”
Accenture Strategy “Customer 2020: Are You Future-Ready or Reliving the Past?”