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    Loyalty Programs that Actually Work

  • When it comes down to it, loyalty programs are only successful if they provide benefits that customers actually want.

    Unsplash/Clay Banks
    If the first step is knowing who your customer is, the second step is understanding what they want out of a restaurant and its loyalty program.

    From punch cards to point systems, there are a slew of loyalty program ideas and platforms to choose from. As we saw in part one of this series, the state of loyalty programs has shifted as customers demand hyper-personalized offers that are timely and specific. Unfortunately, many of these programs do not quite hit the mark when it comes to creating personalized and memorable experiences that keep customers coming back again and again.

    When it comes to designing a loyalty program that actually works, it’s important to know who the customer is, understand what they want and deliver based on this information. According to our study ”The Loyalty Divide,” only 49 percent of customers will sign up for a loyalty program, and only if it’s relevant to them. With advancements in technology and the ability to personalize offers grows, there is increased room for restaurateurs to improve and hone their loyalty programs. 

    Know Who Your Customer Is

    Perfecting a loyalty program begins with knowing who your customers are—the patrons of a restaurant will be the ones participating in and, hopefully, enjoying the benefits of a loyalty program. However, if the program is not designed with them in mind, chances are they will find it irrelevant and not worth their time.

    For instance, if the promotion targets the wrong demographic or isn’t offering relevant or timely incentives, it’s not going to be effective or useful. To provide appropriate offers, restaurateurs need to know who their customers are – their age, price point and other general demographic identifiers.

    Understand your customer

    If the first step is knowing who your customer is, the second step is understanding what they want out of a restaurant and its loyalty program. To have a clear picture of what customers are looking for, restaurateurs must have actionable and current data on their customers’ preferences and the ability to shift tactics alongside a customer’s changing preferences.

    It’s no surprise that technology plays a huge role in driving connection and convenience for customers. Technology can, for instance, improve connection by allowing customers to accept or reject offers (88 percent of customers find this appealing, according to the loyalty study), providing the restaurateur with invaluable information on each customer’s preferences so that they can offer relevant promotions. In terms of convenience, technology creates seamless and enjoyable experiences by making it possible for customers to order or pay for food and drinks through a mobile app or to receive notifications via a mobile app or text message (82 percent find these options appealing).

    As customers use the technology, the restaurateur gathers data on them through the choices they make, allowing the restaurateur to use this data in future interactions.

    Implementing personalized offers

    Now that you know who your customers are and what they’re looking for, offering promotions and benefits that are relevant and adaptable to meet their current demands is imperative.

    According to our loyalty study, the more personalized the loyalty program is, the more engaged the customer is going to be. For instance, more than 80 percent of customers are willing and eager to share information, whether through surveys or by accepting or rejecting offers, in exchange for a more personalized experience. This is where the idea of adaptive loyalty programs comes in. Whether via social, email or mobile apps, adaptive programs allow restaurants to create offers that can change and shift to meet customers where they are, literally and figuratively, at any given moment.

    When it comes down to it, loyalty programs are only successful if they provide benefits that customers actually want. By understanding not only who their customers are but what they want, restaurants can continue to provide personalized offers, to the delight of their customers.

    Chris Adams is the Vice President of Food & Beverage Strategy at Oracle.

    Note: This is the second of a two-part series on loyalty programs. The first piece can be found here.