Industry News | August 11, 2010

NRA: 90 Percent of Operators Say Loyalty Programs Help

Customer loyalty is a key driver of restaurant business, and new National Restaurant Association research finds that more than three-quarters of restaurant operator survey participants say guest loyalty programs helped grow business during the economic downturn. In addition, 90 percent say loyalty programs give them a competitive edge, and the vast majority is planning to invest more in their programs because of their proven ability to drive business growth.

In the first in-depth loyalty study of its members, the National Restaurant Association partnered with Loyalty 360 – The Loyalty Marketer’s Association and rDialogue to investigate the level of penetration of loyalty programs in the restaurant industry; identify the types of loyalty practices being utilized; collect the metrics being used to measure performance; and determine the level of dedicated resources supporting strategy, implementation, and management of the programs.

”Repeat customers are a very important demographic for restaurant operators to grow their business, and loyalty programs can provide strong incentive to increase visits from those individuals,” says Hudson Riehle, senior vice president of the Research & Knowledge Group with the National Restaurant Association. “This new research clearly shows the value of operating guest loyalty programs, and offers great insight into loyalty strategies.”

The study revealed that 77 percent of respondents said loyalty programs helped drive business during the economic downturn; nine out of 10 respondents said loyalty programs give them a competitive advantage; of those that operate a guest loyalty program, 84 percent plan to maintain or increase their program investment in 2010; more than four in 10 respondents (41 percent) operate a loyalty program, and nearly half (47 percent) are planning to launch one; and about three-quarters of respondents (74 percent) use social media to support their loyalty program. Facebook was the most common social networking site used (65 percent), followed by Twitter (40 percent), and blogs (17 percent).

“These findings clearly show that dining loyalty programs continue to grow because they work to accomplish strategic business objectives,” says Mark Johnson, CEO of Loyalty 360, a loyalty marketing think tank and clearing house of information. “We know that restaurants want the insights from these loyalty programs to provide or create sustainable behavioral change. And with the economy continuing to put pressure on marketing budgets, we also know that this study gives industries across the board deeper insights as how best to drive the proven bottom line impact of loyalty programs.”

“Respondents overwhelmingly said their programs gave them a competitive advantage,” says Phil Rubin, CEO and president of rDialogue, a customer loyalty and relationship marketing firm that executed the survey. “As brands are seeking effective ways to distinguish themselves from the competition, the results and best-practices highlighted in this study have significant impact for businesses industry-wide.”

The online survey was conducted in 2010 among National Restaurant Association members, with 1,300 submitting responses. The results of the study, as well as an exploration of best-practices for building engagement and loyalty programs, will be the focus of an upcoming webinar titled “Get an Inside Look at Loyalty-marketing Programs.” The members-only webinar will take place on August 17 at 2 p.m. ET.

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