Loyalty Programs: The Secret Ingredient to Keep Guests Coming Back for More


Tuesday, July 17, 2018
Punchh Inc

Loyalty in any relationship, professional or romantic, is hard to earn and even harder to keep. But what basic features define this elusively desirable trait? In a symbiotic relationship, if both partners regularly produce services of value to the other, both partners will continue in the relationship until either party no longer perceives any net positive gain.

As opposed to romantic relationships, however, loyalty for restaurants more often than not translates directly to revenue. In fact, 66 percent of U.S. consumers spend more on brands that they’re loyal to, and 55 percent of consumers recommend brands they love to their friends and family (which exponentially increases that customer’s overall lifetime value). Thus, establishing a loyalty and rewards program that individually rewards customers and provides growing incentives for their repeat business is imperative for accelerating sales.

One of the most common customer experience failures by restaurants is redundancy. Most chains are over-simplistic in their view of a customer’s expectations. Today, consumers want to feel special. They want a brand to know who they are and what they like so their experience overall is both unique and memorable. Having a generic marketing strategy that gives all customers the same experience is guaranteed to get stale as trends change and fads appear and disappear. Dynamic, adaptive marketing programs that focus on building a relationship with your customers where your brand is providing not just a service, but an experience, is ultimately what’s going to drive customer retention.

Loyalty Goes Way Beyond Points

While around 80 percent of millennials participate in loyalty programs, only 15 percent of these millennials say that “points” influenced their most recent purchase. Loyalty programs are no longer just about points given to customers through a punch card incentive. While these methods can initially work to drive sales and create short-term repeat customers, apps that solely focus on points can see extremely high churn rates for lack of utility and phone storage.

Additionally, many point-only systems don’t do anything to help your brand understand who your customers are. Forward-thinking brands concerned about customer longevity should look to create their own digitally-led customer loyalty programs that include features like gift cards, location-specific offers and reward redemption programs to retain customers.

By combining purchase history with customer profile data and then pairing that with real-time market analysis data is the kind of rewards program restaurants need in order to compete in today’s customer-driven world.

Personalized Offers Are Key

As Matthew Grant told Aberdeen Essentials, “You can’t provide an experience to a customer you don’t know.” By capturing every engagement touchpoint through your digital loyalty program allows you to get a better holistic view of the ways customers want to interact with your brand. With this information, you can create a personalized experience for your customers, which is the new way to gain a competitive edge in today’s market. In the restaurant setting, this means personalizing offers, rewards and even menu offerings to each guest based on their purchase history and other data.

For example, knowing that John Smith is a very loyal customer who comes in every Monday to buy a small latte allows your brand the opportunity to market to him in ways that will hopefully lead to increased frequency (i.e. sending a BOGO Friday offer to encourage new buying patterns) as well as an increase in his check averages (i.e. offering a free latte with every 10 baked goods).

However, it’s also just as important to learn from their behaviors and purchases over time. For example, knowing that John Smith is not only a latte lover, but also a vegetarian is helpful to avoid sending him irrelevant offers for food containing meat products, which provides a better, more relevant experience for him.

By centralizing all of this information into one system, you’re able to track every offer they’ve received and redeemed. This allows your marketing team to continuously hone in on the types of offers that work specifically for John Smith as well as the overall customer segment he sits in.

Build Relationships

Loyalty for restaurant brands today is less about having a “punch card” and more about building an actual relationship with your guests. In a world where digital is first and customer expectations are higher than ever, implementing a robust loyalty program can not only help increase the overall sentiment customers have about your brand, but can also lead to increases in revenue.

At Punchh, we help restaurant brands know their customer’s digital identity, verify every visit, and keep track of purchase receipts for every guest. Using these key pieces of information, your restaurant brand can automate marketing efforts and design campaigns and offers targeted for every customer and every location. For more information on our Loyalty product or how we can help your brand, be sure to download our free Brochure here.


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