With the food and dining industry constantly changing, restaurants are often looking for innovative methods to boost customer retention and increase revenue. One way to do this is to develop a well-designed loyalty program and reward scheme. By luring guests with exclusive benefits, gaining actionable data, and actively improving the overall food experience, such incentives keep long-term customers coming back for more.
Let’s examine the necessary measures for launching a successful restaurant loyalty program. We’ll also check out how to design effective rewards, use technology to achieve results, and analyse the key indicators of a successful loyalty program.
What is a Restaurant Loyalty Program & Reward System?
A restaurant loyalty program is a targeted initiative aimed at developing a customer’s loyalty and interest. In other words, it rewards customers for their loyalty. The prime example is Nando’s, where you can get a free whole chicken once you’ve visited the restaurant around 12 times.
This system includes a loyalty program where repeat customers can earn points (or, in Nando's case, chillis) from each visit and later redeem them for rewards. Various types of memberships can also be offered under the loyalty program. These memberships allow loyal restaurant patrons to enjoy exclusive benefits and limited-time discounts that aren't available to regular clients.
Fundamentally, the ultimate goal of the loyalty program is the ability to create an emotional connection between the restaurant and the customer. This bond makes the customer feel loved and boosts the frequency of return visits, but also contributes to positive advertising by word of mouth and helps the restaurant establish brand loyalty and recognition.
Through these loyalty program offered, restaurants can collect detailed information about customer preferences, eating habits, and behaviour to strengthen their analytical indicator database. This allows you to use hard data to improve the menu and services for other customers.
Types of Restaurant Loyalty Programs
Restaurants use different types of reward schemes to maintain their customers’ ties and keep them coming back for more. These programs motivate regular diners in different ways, so let’s have a look at some of the most popular programs.
Tiered Membership Programs
Tiered loyalty programs are designed with various levels of benefits that depend on a customer’s loyalty. For example, as the participants accumulate points and/or visits, they go up through tiers, with each level offering more rewards and exclusive offers on menu items. This is great for increasing revenue as people often spend more so they can climb the ranks.
Points-Based Programs
This framework presumes clients get some points with each purchase. These bonus points can later be redeemed for rewards, including discounts, free meals, or niche-related specialities. Accumulating more points depends on how much the customer spends, which eventually results in better rewards. This results in more repeat visits by customers and builds a sense of community with your visitors.
Perks-Based Programs
Perk-based rewards facilitate extra services for a specific customer, such as arranging a preferred seat or getting an invitation to a personally tailored special event. These programs focus on providing highly personalised rewards beyond the traditional reward system. This makes the customer feel special and helps build brand loyalty between a select few.
Partnership Programs
Several restaurants enter a partnership to open a shared loyalty program with other establishments. It allows customers to earn points or rewards not only by visiting the restaurant itself but also by purchasing goods or services from partner companies. This is great for chain restaurants or independent restaurants with multiple locations. This one is great for fostering a community around a specific area.
Gamification
A gamified loyalty program implies a game and a competitive element. Loyalty program members earn points for meeting challenges, entering contests, or simply interacting with the restaurant on social media. By gamifying things, your brand spreads like wildfire via word of mouth, often the strongest form of marketing there is.
Subscription Programs
Some companies provide loyalty programs based on subscriptions, also known as loyalty card programs for restaurants. As the name suggests, customers can pay a monthly or annual subscription fee to receive premium benefits. For instance, free delivery services, gift cards, special discounts, or members-only events could fall under this category. Uber Eats has the loyalty program Uber One which gives you free delivery whenever you purchase food from the platform.
By taking advantage of these different types of loyalty programs, restaurants can appeal to a wide range of customer preferences and create compelling, repeatable experiences depending on their target audience.
Implement a Loyalty Program in Your Restaurant
Implementing a successful restaurant loyalty reward program requires you to weight up a few different options. Let’s go through the steps you should take when setting up your loyalty scheme.
Define Your Goals & Objectives
Determine what you want to achieve before deciding on a loyalty program structure. Do you want the system to increase customer retention or derive repeat business? Or do you want to upsell or encourage visits from new customers?
Know Your Clientele
Take a few minutes to understand your core customer demographic. For example, do they seek the lowest prices, or are they willing to pay for convenience and great service? Are they young or old?
Decide On Rewards
Decide whether it is tiered or points-based. Are you considering offering a portion of purchase discounts, free products, event access, or customised specials?
Incorporate Technology
Make sure to get technology involved in your loyalty program to help things along. Adopt an EPOS system that can see the customers’ purchases and their earned points. An Online Ordering System linked to your loyalty program can also be used to give customers rewards on every order placed; dine-in or online. This also helps automate the process.
Menu Management System Integration
Integrate your loyalty program with your Menu Management System. This enables you to give rewards on various dishes, promote new cuisines, create special offers and offer personalised rewards.
Market Your Program
You should develop a marketing campaign and use various marketing channels to introduce your loyalty program. Moreover, you should push your customers to join the program with posts in social media, direct email, signs in the store, mobile app notifications, and a link on the store’s website.
Ensure a Seamless Process
Make it easy for your customers to redeem their rewards. Ensure your staff members are well-trained to guide the customers through the redemption process, be it through the POS system, for online orders, or to redeem physical punch card coupons.
Collect & Analyse Data
Don’t forget to analyse the data you collect from the loyalty rewards program for restaurants regularly. The insights you get should enable you to tweak your offering, promote it to specific customer clusters, and improve the general customer experience.
With these steps and tools, such as POS, online ordering systems, and menu management systems, you can build a successful customer loyalty program for restaurants that genuinely rewards your customers but also develops much-needed loyalty for your business’ growth.
Key Indicators of a Successful Loyalty Program
The best loyalty program for restaurants goes beyond offering customers a reward. It is about building long-term relationships with customers and boosting business growth. The following indicators help evaluate how successful a restaurant customer loyalty program is in achieving these objectives.
- High customer engagement indicates that customers are active program participants who activate, earn, and redeem their rewards. The latter can be achieved by implementing the program across multiple channel operations, such as attendance, online ordering, and social media channels.
- Repeat business means a successful program promotes existing customer return by creating loyalty and an emotional bond with the brand. Consequently, the longer the customers remain, the more revenue the restaurant accumulates.
- Increased spending per visit is another indicator that a client is ready to contribute more money to earn more rewarding points. As a result, revenue grows due to upselling, trying new product categories and items, and driving menu mix upsells.
- Word-of-mouth signifies that satisfied customers are willing to share their positive experiences and recommendations with their friends in different ways, including through social media and online reviews.
Do Loyalty Programs Work?
Reward systems and customer loyalty programs for restaurants are undeniably one of the most effective methods of driving a restaurant’s growth. The programs are well-researched and studied and successfully increase customer retention and revenue generation. According to one study, companies with strong loyalty programs grow revenue 2.5 times faster than the competition.
The underlying factor that ensures this success is a connection with customers on an emotional level. When people feel appreciated and valuable by receiving customised rewards, they are likely to keep choosing your restaurant.
For almost 20 years, 3S POS has offered one of the most flexible EPOS systems to international brands such as Caffe Concerto, Maroush, Comptoir Libanais, Pepe’s Piri Piri, GDK and thousands more delighted customers.
If you are looking for an EPOS system for restaurants that will not just help you accept payments but includes inventory management, loyalty programs, and much more, speak to our sales for a free demo.