Of the industries most impacted by the pandemic, the restaurant and food sector saw a tremendous shift in consumer demand that required agility and innovative thinking to navigate. With more customers utilizing mobile ordering solutions to fulfill contactless meal transactions, whether onsite or with delivery/pick-up, large and small businesses needed to adapt and master e-commerce and loyalty offerings to keep pace with growing demand.
Points systems and tiered rewards are table stakes today but have proven incredibly effective. A recent report found the average sit-down restaurant customer and rewards program member spent $167 per month on food eaten on-site in 2020, 92 percent more than non-rewards program members at the same sites. That number is even higher with members who ordered takeaway. Those users spent $232 per month on food orders in 2020—more than twice the number of non-users.
Today, consumers are more cautious with their buying habits, opting for ways to save money and get the most out of their purchases. The rise of digital commerce and tightening purse strings have made loyalty programs even more visible and appetizing. Additionally, digital competition driven by the advent of delivery adopted by traditionally dine-in restaurants, and the resulting newly saturated market of businesses providing takeaway and delivery services, has rapidly evolved the importance of robust loyalty programs. In fact, PYMNTS data found that 39 percent of U.S. consumers cited loyalty programs as an important incentive to spend more and 44 percent of restaurant customers use these programs as they find more value in the improved overall guest experience.
As more attention is on loyalty programs, there are changes that restaurants can implement today to make their programs stand out:
Surprises—Offer “gifts” like random bonus points, free items, and other perks outside the stated benefits given for different loyalty tiers. Restaurants can provide special offerings on meaningful dates such as birthdays or national holidays. For example, grant veterans a free reward on Veterans Day or offer teachers a free choice item on National Teachers Day. Providing exclusive surprises to loyal users and acknowledging valuable community members with personalized messaging is a great way to increase loyalty and retention.
Personalized Rewards—Leverage “like” purchase behavior and histories to offer appetizers, desserts, beverages, sides, and bonus perks based on customers' preferences. Personalized offerings can relate to consumers’ ordering preferences, or lead them to engage with your brand in new ways. For example, a restaurant could offer a consumer that places orders mostly online a free entree for one on-site purchase or a discounted offer on a new product based on similar past purchases. Utilizing data and analytics, restaurants can identify preferences and priorities that help make their customers feel valued and more likely to return.
Points Fueled Journeys—Offering bonus points for reaching a certain cart size or trying a new menu item can broaden and deepen the customers' interactions with a restaurant. For instance, offer double points on specific items or days of the week to encourage customers to engage with the brand more often. The more incentives a consumer has with a restaurant, the more likely they are to reengage with the brand and promote it to peers.
Collaborative Partner Rewards—Consider the full scope of a customer’s day. Can earning points with your restaurant lead to perks at other popular merchants they like, or conversely, can rewards from other merchants lead to rewards from you? For example, could customers who purchased a one-month trial membership at a fitness studio earn a free meal at your healthy foods store? These partnerships can also create opportunities for faster point accumulation, raising engagement.
Experiences—More than ever, consumers want guaranteed hygienic experiences with the restaurants they choose to dine with, with more focus on quicker transactions and minimal contact. Businesses should prioritize driving COVID protocol-aligned, mobile-driven online ordering and the convenience associated with elevating prior transactions to make re-ordering an easy ritual. For example, the Starbucks app saves users’ favorites and past orders, providing quick accessibility to their preferred food and beverages with all their customizations simply upon opening the app. This process is not only swift and convenient but often causes users to not alter past orders, even if they may not need that slice of coffee cake or two pumps of sweetener in their coffee. This increases transaction size while making it easy to get in and out without any contact with store associates or other customers.
Over the past year, the restaurant industry has undergone a massive transformation. Consumers’ behavior around restaurant businesses/services has seen a fundamental shift that 87 percent expect will far outlive the pandemic. Today, both consumers and companies opt for innovative solutions and offerings that provide convenience and streamline processes. Restaurants and businesses that recognize this new set of rules and priorities and meet customers where they are today will find success in the new world.