More than ever, restaurants need to think outside the box when it comes to earning and keeping loyal customers. As marketing tools like apps and loyalty programs become table stakes, brands need other competitive advantages to earn effective engagement that drives revenue. Loyalty programs are nothing new, but according to a KPMG report, 61 percent of consumers globally agree that loyalty programs are too difficult to join—or that earning rewards is too difficult. It is clear that ease of use is where brands can differentiate to help grow customer lifetime value.
What are we asking of customers when we ask them to enroll in loyalty programs? We are, in essence, asking them to go out of their way to do something or to take an extra step. And the harder that thing is to do, the more you have to give away to incentivize a customer to follow through.
So, what’s the key to success with loyalty programs? Make it as simple as possible to join and even easier to stay engaged. As a result, your brand can ease dependencies on expensive discounts often required to get customers to take those burdensome extra steps, adding up to significant bottom line savings.
Make it easy to order direct and be a loyal customer
Both online ordering experiences and loyalty programs must be convenient for customers. In the plight against third party, making sure your customers order directly is key to retaining customers, the data that helps power more personalized marketing, and commission dollars. Third-party delivery channels invest huge amounts of time, money, and resources to make their interfaces easy to use so customers will order through them without a second thought. Brands must strive to make their own ordering experience effortless through partnerships with online ordering providers and CRM-integrated experiences.
The more difficult your app or online ordering experience, the more you’ll have to give away or discount to drive enrollment and first-party ordering. This can be very expensive for restaurants, and unnecessary for customers who were planning to make a purchase anyway.
Instead, if your loyalty program is effortless to enroll in or better yet, as simple as placing that first purchase online, and a breeze to use, there’s less need for an incentive. Customers will be more likely to return to purchase directly, either through an app or web ordering, when they know they will earn progress toward perks and the ordering and process will be simple.
Greg Creed, former CEO of Yum! Brands and board member at Thanx, coined the term “easy beats better” in his recently published book RED Marketing: Relevance, Ease and Distinctiveness. Ease of use and convenience will always win over many of the shiny objects often prioritized by brands which is why even the most sophisticated and bespoke apps still need to be easy for consumers to use.
So, how can restaurants make their loyalty program even easier? Here are some improvements to focus on for an improved user experience.
- Use a passwordless login. One of the biggest headaches of a digital ordering experience is having to type in a password, or forgetting your password altogether.
- Provide an easy sign-in link. Modern user experiences skip passwords altogether using more secure methods of authentication like two-factor authentication.
- Offer one-click re-ordering. Many customers like to order the same things over and over. Make it easy for them to re-order with just one click or tap, and save their past orders.
- Avoid administrative hurdles up front. Your customers are hungry. Put your menu front and center and only after they have completed their basket ask for information like name and location.
- Ample modifiers. Personalization shouldn’t be limited to your marketing approach. Customers need to be able to personalize and customize their orders based on preferences, dietary restrictions, etc. Make it easy for guests to add modifiers to their order otherwise they may go to third party channels who already do.
- Suggest one-tap add-ons. Create opportunities for incremental revenue, such as “add avocado for $1” with one click or tap, or “add on a dessert or milkshake” within the ordering window.
Don’t depend on an app
All that said, you shouldn’t put all your eggs in the app basket. Delivering ease of use to customers also means making it easy for them to engage on their preferred channels. Loyalty in particular should not depend on an app to enroll or engage on every purchase. With a reliance on only app engagement, loyalty penetration will almost always reach an asymptote. When you remove the dependency on apps, that's how you can start seeing loyalty capture rates of 60 percent+.
Asking your customer to add yet another app to their smartphone is a big ask, especially for new or first-time customers who have not yet built a strong enough connection to the brand to warrant an app download. In fact, it is those customers who are most important to move into your marketing funnel, so you can capture their data through loyalty and guide them to subsequent purchases.
Personalization is key
Take convenience one step further by making your experience not just easy but easy for the specific individual.The same KPMG report shows that 60 percent of consumers say they are loyal because they feel a personal connection to a company. When you use the data to make messaging and offers more aligned with the customer’s habits and needs, then you’re giving them a deeper and more meaningful experience.
Easy to use digital experiences help create a flywheel. The easier it is for customers to order directly and engage in loyalty, the more data you can collect. And with more data, brands can more effectively personalize marketing to drive repeat purchases. An easy to engage, effortless loyalty program makes all the difference when it comes to driving more profitable behaviors from your customers. By eliminating friction from traditionally burdensome asks, brands can rely less and less on expensive discounts and see better ROI from marketing efforts.