What is a Restaurant Loyalty Program?

The following article covers everything you need to know about restaurant loyalty and how loyalty programs can help drive revenue for your brand!

Today's post comes from our partner Incentivio - the only restaurant digital platform that operates across the web, mobile and in-store channels to help restaurants acquire new customers, drive visits & spending, increase loyalty and engagement, reduce cost, and drive incremental revenue. Together, Incentivio and Otter allow restaurants to manage their third-party and first-party digital guest experience while also engaging and rewarding guests for the various ways they interact with the restaurant.

The following article covers everything you need to know about restaurant loyalty and how loyalty programs can help drive revenue for your brand!


Restaurant Loyalty Programs

Earn points and get free stuff? Who wouldn’t want that? We’ve shopped at specific stores, downloaded mobile apps for restaurants, and applied for credit cards just to earn points and be rewarded for our purchases. Double points day on orders anyone? How about a $1 dessert reward just for being a member? It’s safe to say these deals are what reel us back in to spend more and stay loyal to brands. That’s why restaurant loyalty programs are crucial to driving repeat visits and increasing sales.

Customers are 80% more likely to shop at stores with loyalty programs and spend 33% to 10x more over time. Guests like to have good deals and feel rewarded for their purchases. They also like purchasing from a brand they like and are familiar with rather than trying something new. Catering to your guests by offering a valuable and appealing customer experience will always have them coming back for more.

We’ve created a guide to help you produce a successful restaurant loyalty program so you can increase sales and retain guests.

What is a Restaurant Loyalty Program?

Customer loyalty programs track the spending of repeat customers then reward that loyalty with points or punches (depending on the loyalty program) that can be exchanged or redeemed for rewards. For example, a loyalty program with points follows a point-per-dollar system. $1 spent can equal 10 points, or $1 can equal 20 points whichever amount of spent to point ratio the brand chooses. Rewards for restaurant loyalty programs typically include discounted meals or free menu items.

Types of Restaurant Loyalty Programs

The most important aspect to remember about loyalty programs is that customers want to be rewarded for their purchases. When they decide to stick with your brand and continue to stay loyal, they should be rewarded for their behavior. Here are three popular loyalty programs you can adopt for your business.

  1. Loyalty Points: It’s the most effective loyalty program for guests as they can earn points with every purchase. The point-per-dollar system incentivizes customers to spend a little more on each visit than normal to attain their reward. Usually, the model follows 1 point per $1, however, the amount of points to award is up to you. Starbucks’ loyalty program awards two stars per $1 when guests use their digital card in the mobile app to pay. Guests can also add their debit or credit card to the mobile app and earn one star per $1 spent. Starbucks gives rewards starting at 25 stars up to 400 for guests to redeem customizations, items, or merchandise.
  2. Tiered Loyalty Program: Tiered loyalty programs allow you to turn first-time customers into loyal guests by simply signing up while rewarding current loyal guests to obtain better rewards by making repeat purchases and visits to rank higher in the program. A great example is Chick-fil-A’s Chick-fil-A One loyalty program. They offer four membership tiers letting guests’ benefits grow as they accumulate more points.
  3. Punch Card Loyalty Program: Punch card loyalty awards "punches" for a qualifying product or group item and after a certain amount of punches the guest receives their award. For example, I might need to visit 5 times to earn 5 punches and get a free item or discount. Rather than focus on the amount spent, brands reward guests simply for visiting and making a purchase.

How to Create a Successful Restaurant Loyalty Program

When choosing which loyalty program to create and offer guests, you should be aware that not all will work the same for your brand. Maybe a loyalty points program works better than a punch card system. We’ve provided some tips to keep in mind when creating your loyalty program to see what works best for you!

  • Make sure your loyalty program is simple. Consumers are accustomed to the idea of earning points for their purchases. This makes it easier for guests to adopt your program and provide a better customer experience. They like working towards earning their rewards so the easier it is for them to purchase items and be rewarded is key.
  • Focus on the customer experience with personalized rewards. Guests like to be heard and seen, especially personalized attention. Using restaurant CRM means you can take control of the guest experience by analyzing guest data and providing specific/targeted rewards. By collecting their data during sign up you can automatically send birthday rewards or location-based rewards/deals. Loyal guests are more likely to engage with your restaurant’s loyalty program if you provide relevant rewards or offers!
  • Create a digital restaurant loyalty program. Nowadays, everything is done on mobile. From searching for brands, picking out what to buy, and purchasing items in one click. Your restaurant loyalty program should be offered digitally, in a mobile branded app that coincides with your online ordering system. This makes it easier for guests as around 60% of online orders are made on mobile. It also allows them to use the loyalty program wherever they are versus a physical card that may get lost or not wanted as it takes up wallet space. The most important reason why digital loyalty programs are better is that it collects customer data for insights on what your best guests order, how often they come in, how much they spend, and other crucial information.
  • Promote your restaurant loyalty program everywhere! Let guests know you offer sweet rewards and deals to get them coming back! Show off your rewards and loyalty program on your social media accounts, website, and marketing channels. Offer a discount or free item when they sign up to get them excited to enroll. Guests will come back if they like your brand and get rewarded for purchases or visits.

How CRM Can Help Create Restaurant Loyalty Offers

Customer relationship management gives ​​you the ability to segment and target specific guests based on activity and past behavior. You own the guest relationship and the data to set up automated restaurant marketing campaigns. Features like customizable sign-up pages to capture any guest information you’d like and custom tags to segment guests and create tailored restaurant marketing campaigns help you control the guest experience.

With CRM, you can use the data to create customized restaurant loyalty offers and build meaningful relationships with guests. To ensure guests know about your loyalty program, train your staff to encourage customers to sign-up and reap the benefits. Once guests are part of your loyalty program, you should consistently communicate with them. Make them feel like they are part of an exclusive membership by sending offers and news with push notifications via your mobile app and text, connecting on social media, and sending email newsletters.

While it’s important to have a restaurant loyalty rewards program, your guests also want to feel like they matter. Engaging with your guests beyond your restaurant is crucial to the customer experience!

Bridge the gap between first-party and third-party ordering by learning how the Incentivio integration with Otter can help you manage intelligent guest engagement within a single platform! Otter customers can use Incentivio for free for two months!

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