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    Loyalty 2.0 Has Arrived for Restaurants

  • The battle for customer data and frequency is heating up.

    Pixabay
    By combining technology, convenience, and service, restaurant owners will have the necessary tools to attract new customers and encourage repeat dining, ultimately boosting their bottom line.

    Remember those days when the app store seemed revolutionary? Feels like 40 years ago, but it was really just a recent revelation for marketers and retail brands nationwide. Consumer behavior has shifted dramatically since. Perhaps because the ocean of options became more crowded and convoluted than a Google search ever was. Yet despite the rise—Statista says there were more than 2 million apps on the Apple App store last year alone—consumers remain fiercely loyal to the platforms they do frequent. App Annie data showed 60 percent growth in the number of apps downloaded globally last year. Also, the amount of time users spent inside of apps lifted 30 percent. Meanwhile, Quettra noted that within 90 days of download, the average app loses 95 percent of its active user base.

    A clear picture emerges. The No. 1 challenge, as always: Get users to download. See Burger King as a case study for this, proof there is no incentive too crazy to pick up users. But the golden result remains becoming a continous part of a guest's digital journey. This is one of the arenas where the quick-service battle for market share will be won in the coming months. If we're not there already, a loyalty and rewards battle is heating up across all levels of the industry. Those chains that can inspire diners with timely, effective, and personalized deals, and keep them coming back, will find a path through the declining traffic that is the current restaurant reality. And from mobile ordering to delivery, the one-to-one marketing tools and data at stake are where the real success stories will be written.

    Steve Fusco, president at Rewards Network, chatted with QSR about the state of the loyalty industry and how it can make all the difference for restaurants.

    What challenges are restaurants struggling with right now, and what can they do to tackle this?

    Creating and implementing an effective marketing strategy is a major challenge for restaurant owners. They may lack the time and resources to test a variety of approaches and would prefer a turnkey solution that they can easily implement. To attract diners, many restaurant owners are embracing tech-driven loyalty programs, which encourage customers to dine out more frequently by offering the opportunity to earn rewards.

    Unlike an old-fashioned loyalty punch card, the new breed of restaurant loyalty programs provides customers with the ability to earn simply by paying for their meal with a registered credit or debit card. The customer registers the card upon enrolling in a program, chooses the type of rewards they want to earn, and then pays with the linked card each time they eat out at participating restaurants.

    This new breed of loyalty rewards programs also opens new channels of communication between guests and restaurants, including email marketing and the ability to engage customers by responding to verified online reviews. Restaurant owners can also analyze the rich data they collect to make smart business decisions. They might, for example, gain insight into how to market to consumers whose profiles resemble their most loyal customers, thus attracting new regulars.

    How can restaurants stand out to make their loyalty programs valuable?

    Restaurants can differentiate themselves from competitors by providing customers with flexibility and choice in the types of rewards that can be earned. The earliest restaurant loyalty programs typically provided frequent guests with the opportunity to receive a free item or a discount after a certain number of visits or dollars spent. Today, customers are more likely to want a say in the type of rewards they earn, and they may want a reward they can redeem elsewhere. For example, one customer might be motivated by the opportunity to accumulate airline miles, while another may prefer to rack up discounted fuel rewards. Providing customers with a choice in the type of rewards they earn can help a restaurant owner earn that customer’s loyalty.

    How have loyalty programs evolved? What is Loyalty 2.0?

    While the first generation of loyalty programs was simple, today's rewards landscape has become increasingly complex. Consumers are bombarded with rewards options from every business they transact with. Savvier than ever before, today’s restaurant guests know that the punch card is about increased frequency and more sales for the restaurant, not about their needs.

    Loyalty 2.0 is about creating emotional loyalty and affinity to a company. Yes, today’s consumer wants to be rewarded faster and more conveniently. They want to know immediately that they’ve earned their rewards. But Loyalty 2.0 goes beyond replacing the coupon with an app or providing gratification with the swipe of a card. It extends beyond four walls to online and neighborhood experiences. Restaurateurs can use loyalty data insights to put the customer back in customer loyalty—offer personalized guest experiences, respond to reviews, engage on social media, and know their guests better than the competition does.

    What are some ways restaurants can interact with customers online and in-stores through loyalty programs?

    Exceptional service is still the core of any loyalty program and it’s more important than ever to provide this service through personalized customer experiences. These interactions can be as simple as greeting regulars by name, or sending an email to thank them for their continued business. Ultimately, making an effort to connect is what will build a stronger customer relationship and earn long-term loyalty from diners.

    Restaurants can also interact with customers through personalized marketing efforts, such as geo-targeted emails sent to customers who live within a certain radius.  Owners can further deepen customer ties by noting significant dates in their customers’ lives, such as anniversaries or birthdays, and surprising guests visiting that day with a special dessert — on the house.

    Asking customers for feedback is another way restaurant owners can demonstrate that they care about offering the best possible experience. This can be accomplished by attaching a comment card to the check, or emailing diners and asking them to write a verified online review about their dining experience.

    How can loyalty programs impact results and cut through the noise by delivering a seamless, tech-driven loyalty experience for customers?

    By tapping into real-time, relevant customer data, restaurants can continuously improve their business operations to provide more personalized experiences. Demographic data showing that loyal guests only come in during lunch could inspire restaurants to create promotions designed to bring them in for breakfast or dinner. Understanding the demographic characteristics of regulars allows the restaurant to market to “look-alikes,” i.e., prospective diners who are likely to enjoy the experience as much as loyal customers do.  Other data might even inform fine-tuning features of the restaurant, from the menu to the music to the décor, creating an experience that causes guests to come more often (and spend more).

    By combining technology, convenience, and service, restaurant owners will have the necessary tools to attract new customers and encourage repeat dining, ultimately boosting their bottom line.

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