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    Where Do Loyalty Programs Stand Today?

  • To stay relevant, restaurants need to provide an experience that goes beyond the traditional.

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    This desire for immediacy is pretty straight forward—customers want a service that makes their entire experience smoother and easier

    If you ask a restaurateur how customers engage with and view their loyalty program, chances are they will say that their customers “love it!” In many instances, however, the customer’s perception of the loyalty program differs greatly from the restaurateur’s.

    According to an Oracle study ”The Loyalty Divide,” looking at the gap between operator and consumer perspectives on loyalty, customers are far less engaged in a loyalty program than restaurateurs believe they are. In fact, 23 percent of customers reported that they rarely join loyalty programs, while restaurateurs believed this number to be only two percent. Additionally, restaurateurs believed that their reward offers are relevant to over 90 percent of their customers, while only 27 percent of customers would actually agree.

    Sounds like there’s a lack of communication somewhere.

    In order to understand why there is such a disparity between what restaurateurs believe and what their customers actually do, it’s important to understand the current state of loyalty programs.

    Loyalty Programs are Falling Short

    While there are exceptions, by and large loyalty offers are only conditionally relevant for the customers they are targeting. For instance, if the promotion is only available for certain products or at certain times, it is less likely to gain traction—a vegan is not going to be interested in a flash sale on filet mignon!

    For loyalty programs to stay relevant, restaurants need to provide an experience that feels personalized and goes beyond the traditional brand experience.

    How To Improve

    It should come as no surprise, then, that many customers would like a restaurant to offer them something that is tailored to their specific preferences. No, a birthday card once a year does not count.

    For customers, personalization is all about recognizing them as an individual, with offers and services that are tailored to their specific preferences. One way to ensure that this is happening is through the use of customer data. As it turns out, customers are generally open to the use of new technologies, such as mobile, so long as it’s not considered invasive. These additional touchpoints allow restaurateurs to collect invaluable customer data that they can then use to create personalized experiences.

    The Be All End All

    The most important thing to keep in mind is that if a customer decides to make the jump and participate in a restaurant loyalty program, they expect immediate and personalized benefits. For instance, the idea of collecting points over a long period of time is too big of a commitment, in most cases.

    This desire for immediacy is pretty straight forward—customers want a service that makes their entire experience smoother and easier. Whether this is the ability to use a mobile app to receive and view relevant offers, ordering and paying for food and drink orders or simply perusing the menu and associated nutritional facts in an interactive app, customers want an intuitive and seamless experience.

    Loyalty programs are still a vital part of a restaurant’s business and there is huge opportunity for growth. However, in order for it to remain that way, restaurateurs need to adapt in order to provide the personalized experiences customers expect. By providing individualized offers that are timely, customers will have incentive to continue engaging with the restaurateur and keep coming back for more. 

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

    Note: This is the first of a two-part series on loyalty programs. The second piece runs November 8.