Between high labor, real estate, and supply costs, margins in the foodservice industry are incredibly thin. It comes as no surprise that most restaurants have adopted loyalty programs to increase customer retention. Though restaurants have seen loyalty help drive sales and traffic by offering returning customers incentives to visit more frequently or add items onto their usual orders, loyalty programs aren’t without their challenges.
For starters, LedgerPay, Quisitive’s Global Payment Solutions company, reports that while nearly 60 percent of all restaurants offer loyalty programs, only 41.6 percent of all quick-service customers actually belong to one, and they are often a restaurant’s best and highest-frequency customers. That means that quick-service brands have been unable to track the behaviors and purchasing preferences of nearly 60 percent of their customer base, and restaurants are leaving the vast majority of consumer data—and the valuable insights they provide on how to engage them more effectively—on the table.
“Quick-service restaurants provide their customers with good service and great food,” says Jana Schmidt, president of LedgerPay. “But without access to consumer data, these brands are hamstrung and are unable to elevate that good experience into a great one.”
Compare the traditional restaurant experience with what most customers have become used to when shopping online. When a customer uses a retailer’s website, that company knows exactly which items are in that person’s digital basket whether they buy the item or not through a combination of digital tracking tools that seamlessly build online profiles. Additionally, the e-tailer can use previous purchase history to determine what a customer might be interested in buying in the future. This allows them to tailor recommendations and offers to keep the customer engaged, drive sales, and to ensure a personalized shopping experience that’s more satisfying and more profitable.
While restaurants have been able to do the same with their loyalty members, they have missed out on the valuable trove of first-party data from patrons who do not use these programs, as well as consumers who simply fail to log in.
“Loyalty programs certainly have a place and are an important part of the restaurant ecosystem,” Schmidt says. “But they present hurdles for customers, who have to download the app, create a profile, attach a credit card, and then remember to log in and scan the app every time they visit a restaurant. Sometimes they forget, but if they are buying a low-ticket item like a soft drink, they may not bother.”
Eliminating the Blind Spot
This is a critical blind spot for quick-service restaurants because consumers overwhelmingly want their experiences to be personalized. LedgerPay data reports 80 percent of customers are more likely to buy from a company that provides a personalized experience, while 72 percent of consumers claim they respond to marketing messages exclusively crafted to their choices.
This is where LedgerPay’s Payments Intelligence® solution comes in. Rather than requiring customers to create their own profiles and remember to use the app, LedgerPay allows restaurants to collect 100 percent of a patron’s first-party data about preferences and purchasing behaviors all while requiring zero additional work from restaurant staff or the customer.
“With LedgerPay, we’re able to capture true first-party data—not data that’s been purchased or modeled—directly from customers simply by securely and anonymously tracking their credit or debit purchases and creating individual profiles without any extra effort from the customer.” Schmidt says. “Then, that data can be segmented by the restaurant so personalized offers can be pushed to the customer at the POS in real-time.”
For example, she says, if a customer previously visited and bought a kid’s meal, LedgerPay would recognize that patron’s credit card information and enable the operator to generate a prompt at the POS—whether it appears on the kiosk, the receipt, the terminal, or on the register so the cashier can read it—for a treat that would appeal to a child.
“Without knowing these transaction details, brick-and-mortar businesses such as restaurants, can’t provide the same elevated experience an online retailer can,” Schmidt adds. “These offers aren’t just about getting someone to add another item onto their purchase; they are also about getting that person to come back a second, third, or tenth time through personalized offers that resonate with a customer’s unique preferences rather than just a generic, one-size-fits-all free cookie. Best of all, chains have access to the same data across all locations, meaning patrons get the same personalized experience whether they visit a store in Atlanta, Georgia, or Denver, Colorado.”
Consumer preferences are determined solely by their buying habits within that specific restaurant brand, and each profile evolves over time, becoming richer and more detailed with every order that patron places. LedgerPay also provides conversion and tracking analytics so restaurants can see how those offers perform in real time.
Schmidt notes that LedgerPay can work in conjunction with existing loyalty programs, which can enrich a customer’s profile by fusing individual purchase patterns with their prior history. When combined with details such as a patron’s email address or phone number, chains can bring an entirely new level of targeting and effectiveness to their marketing offers. Even if a customer fails to opt in during a visit, Payments Intelligence still captures and adds that purchase in that patron’s profile based solely on matching payment card information.
“We’re also able to work with any loyalty system, payment processor, or marketing platform,” Schmidt says. “This means restaurants can increase the value of any software or hardware they’ve already installed.”
Another benefit, Schmidt says, is LedgerPay’s ability to relieve the burden on employees when restaurants are facing labor shortages and high turnover. With LedgerPay, crew members no longer have to think of the right add-on for an order, convince consumers to download and register for apps, or remind consumers to log into those apps, which can slow down lines when the restaurant is busy.
“We’re really about removing friction from the process for customers and employees,” Schmidt says. “LedgerPay opens access to a vast trove of valuable first-party data to quick-service restaurants by transforming everyday transactions into actionable first-party data without requiring customers or employees to do anything so restaurants can focus on what they do best: Providing service and food, while creating a better guest experience.”
To learn how LedgerPay can help your restaurant capture 100 percent of its first-party data, visit ledgerpay.com.
By Peggy Carouthers