Loyalty programs of some of the world’s most prestigious brands are not just systems that customers use to accumulate points. These loyalty programs also cultivate community and a sense of belonging. Upscale brands like Moet Chandon and Prada have created next-level loyalty infused with luxury and exclusivity. The brands handpick and invite specific customers to join. While restaurant chains like Chipotle and McDonald’s can’t sustain this type of micro-membership program, upon closer inspection, the differences between luxury and mass consumer loyalty programs aren’t that significant.
Now restaurants have the opportunity to examine these micro-membership programs closely and learn how they create customer loyalty. Whether they shop at Target or Prada, dine at the most exclusive restaurants in the world, customers expect brands to understand their preferences and offer rewards that cater to those inclinations.
Restaurant chains can achieve three goals by offering loyalty programs—and zero-party data can help power those initiatives.
Stronger Customer Retention
The first step to engaging guests in a loyalty program requires attracting them into the restaurant—and giving them an incentive to return frequently. Brands with well-developed loyalty strategies find ways to connect guests to their restaurants; which can take many forms.
Some restaurants use closed-loop reward management where they supply single-use, personalized offers redeemable at their restaurant. Others offer promotions via their loyalty programs—an approach that encourages guests to feel smart and savvy. This satisfaction becomes more apparent when consumers feel responsible for finding the discount within their personalized loyalty program.
In fact, 79 percent of consumers would rather brands invest in loyalty programs than social media advertising. This is because consumers often feel as if brands fail to do enough to recognize them as individuals. Restaurant chains can use this strategy to their advantage by establishing loyalty programs that retain and turn customers into long-time, loyal patrons.
A Real-Time Personalized Experience
It’s a challenge these days, to find any restaurant marketer disparaging personalization. A chain's loyalty program should capitalize on this trend. Loyalty programs are now a crucial element of the successful restaurant business model that’s delivering massive opportunities for growth and longevity in a crowded marketplace.
The ongoing COVID-19 pandemic has changed consumer expectations for brands. Consumers don’t necessarily gravitate toward loyalty programs that reward them solely based on how much they spend. Rather, these consumers seek recognition and a personalized experience that delivers relevant content and recommendations based on past purchases.
Successfully implemented loyalty programs establish an emotional connection between the restaurant’s customers and the brand. Loyalty programs can create these personalized feelings by:
- Using customer names within the user interface.
- Acknowledging a customer’s favorite customized orders.
- Offering rewards for special events like customer birthdays or anniversaries.
Engage Customers Through Zero Party Data
Zero-party-data can help restaurants better plan and craft marketing campaigns as cookies begin to disappear because the data—volunteered directly from the consumers—allows brands to more accurately personalize the marketing, services, offers and product recommendations. Brands can also explore ways in which to use technology or social media platforms for customer engagement in real-time. Restaurants might create a fun, interactive community-based experience for patrons while simultaneously asking questions or running sweepstakes to collect patron data.
For example, Chipotle recently adopted Zoom to host “Chipotle Together,” an interactive event giving thousands of consumers the opportunity to chat with celebrities. This initiative has:
- Elevated customer engagement to a more personalized level.
- Increased the quantity and quality of data Chipotle has collected.
- Expanded Chipotle’s outreach to a younger demographic.
A loyalty program’s success depends on a brand’s ability to meet its customers’ needs and expectations. In the quick service or restaurant sector, customers increasingly expect more opportunities for emotional brand connections. That expectation creates a challenge for restaurants since historical behavior doesn’t always correlate to current guest insights. Restaurants that gather and analyze large volumes of guest data-position themselves to better develop and build stronger loyalty programs that connect emotionally with guests and deliver better results now and in the future.
Kevin Sanders is the Industry Solutions Director for Cheetah Digital focused on leading Cheetah’s growth in the restaurant industry. He previously led marketing and digital technology for a fast-casual chain and served as CMO for two restaurant digital ordering brands.