03 Sep 2021

How to Grow Your Loyalty Program

By: Will Hanrahan

Inspiration

Will is responsible for digital marketing at Fazoli’s, leading the digital strategy for the largest premium quick-service Italian restaurant chain in America. He focuses on CRM, web, social media and digital advertising. Since launching the Fazoli’s app in 2017, Will has overseen the growth of the Fazoli’s Rewards Program to over 900,000 loyalty members. This is the second in a series of blogs that Will is writing to offer insight from his experience in building and growing successful loyalty programs. 

My last article shared steps to creating a loyalty program. The following will outline how to increase participation after creation. 

The stats show that companies with strong loyalty marketing programs grow revenues 2.5 times faster than their competitors, while 20% of current customers will make up 80% of a company’s future revenue. Loyal customers also spend 67% more than their peers.

Although powerful, attracting customers to participate in the program can be a challenge, especially in the beginning. Here are  a few proven techniques to put to use:

Migrate an existing program or database

Perhaps the most effective way to grow your loyalty program in the early days is to migrate people from an existing program or database. The challenge here is that while it’s great that you already have people who are familiar with the idea of a loyalty program, you still need to encourage them to migrate.

Make sure to transfer existing points from the old program to the new one and ensure there is a troubleshooting plan for customers to reach out. Allocate the necessary resources to be able to respond quickly to provide a smooth transition, as existing members will likely become some of the most loyal members of your new program.

An existing email list is also a good place to start. We can assume that those customers are  already pretty loyal if they’ve opted in to receive emails, so be sure to keep them in the loop. Sneak previews of what’s coming up can give customers the feeling they have some inside knowledge. Make sure to clearly show the benefits of joining the program.

Deploy materials to promote the loyalty program

To help ensure that people are aware of your loyalty program, you’ll want to create supporting materials such as in-store signage. While customers wait, they should be able to see a message at the table that reminds them to sign up to the loyalty program. 

Make sure to offer free WiFi to facilitate the process and capture email addresses or at least use this as an opportunity to educate customers about your program. With the rise in off-premise make sure that you have some material visible from building exterior or on your product packaging, as this may be one of the only touch points your customers have with your brand.

Mention it on your receipts

Receipts are great for promoting the program as it’s something that every guest receives. Consider customizing receipts to show bespoke messaging.  Pop a little note about the loyalty program on each receipt. For the program that I created, guests can earn points in a few different ways; automatically with an online order when tied to loyalty, through a QR-scanner system found by the point of sale equipment, or by scanning the barcode on their receipt. If you don’t make it easy, be prepared to hear from your guests!

Post on existing digital channels

An obvious place to promote the loyalty program is to take advantage of the existing digital channels, such as the company website and social media profiles. We had a particular focus on promoting the loyalty program on our website by creating a new page to highlight the program, as well as linking to it directly from the homepage.

I also recommend regularly scheduled posts on your chosen social media channels to remind people of the joining benefits of the loyalty program. We created a YouTube video on our channel explaining the program which served as a very useful video explaining the different ways it worked.

Carry out employee training and use contents and incentives

One of the most important parts of launching a loyalty program is to ensure that the employees are trained and aware of the program. After all, when people have questions about it, your employees will be the first people they ask for support.

Training employees will encourage them to become advocates for the program, so be sure to update your training manuals and make them aware of the offers schedule. It’s also a good idea to use contests and incentives to encourage employees and franchisees to participate. Consider running a leaderboard and offering prizes to the people who encourage the most sign-ups. We were able to track this at the location level measuring growth in membership. We also tried out a method where employees had a unique referral code they could hand out to customers.

Launch with an aggressive sign-up offer

Launching with an aggressive sign-up offer helps to make the program seem exciting and worth the effort. In our case, the effort in question was the decision to download the app and sign up for an account. We know that storage space on phones can be valuable real estate these days!

A word of warning here: the more generous the offer, the more likely you are to experience “one and done” guests who sign up for the reward and then never use the app again. While not ideal, at least they are in the loyalty program. There is still an opportunity to maintain contact and turn them into loyal customers.

Use digital ads for app user acquisition

Digital ads can be a useful tactic when you’re trying to target new users, we had particular success with those that allowed us a very specific call-to-action to download our app. Using App Installs as the conversion metric, we ran Google ads, Facebook ads and Instagram ads, and we’re even exploring TikTok as a potential source of new app downloads.

Our ads were effective, as the ad unit was specifically looking for guests in our target market and location who were likely to download the app, and then we promoted the features of the app along with the benefits for joining. We continue to test new creatives and have found that ads featuring videos have helped to dramatically lower our cost-per-install.

Offer a referral bonus

Our ads were effective, as the ad unit was specifically looking for guests in our target market and location who were likely to download the app, and then we

If people join the loyalty program, then it’s already a sign that they’re advocates. The idea behind offering a referral bonus is to take those advocates and to turn them into brand ambassadors by rewarding them for sharing the love. 

In our case, we created a quick and easy way for guests to share a referral code and in return we gave them extra offers for every new member who joined using their code and made a purchase. It was a quick and easy way of attracting new signups and boosting referrals from word of mouth.

Get featured in the media

This is easier said than done, but if you’re able to pick up media coverage, it can have a huge impact, especially if the coverage focuses on the loyalty program and the advantages that come from signing up. There is potential to offer exclusive rewards to people who sign up after hearing about the program. Don’t be afraid to carry out your own PR by approaching local TV, newspaper and radio stations.

Regularly engage with franchisees and operators

Regular engagement with franchisees and operators is vital to the success of a good loyalty program. Without their buy-in, it can be a struggle to secure uptake outside of your core locations. An important part of this is ensuring that they understand the reasons why the loyalty program is critical, as well as the advantages offered to customers who sign up. Make sure to also provide regular reporting that allows them to track the results of their efforts, too.

Ensure that new locations have all of your materials

One of the biggest mistakes that people make when launching a loyalty program is that they roll it out to all of their existing locations and then forget to onboard new locations when they open. 

We created an entire set of materials for promoting the loyalty program, including in-store signage and signage at our drive-thru windows. We then made sure that these resources were provided not only to all of our existing locations but also to every new one that opened up. In fact, it was often easier to get the ball rolling at new locations than it was to change the existing habits of long-term locations that were more set in their ways.

Set goals and metrics for success

As with any aspect of business, success comes with goal setting and defining metrics around what success looks like.  Then monitor those metrics over time and make sure to share that information. It’s also important to make sure that the data is readily available and communicated to employees often.

Conclusion

Now that we’ve covered the ‘how and why’ you might want to set up a loyalty program, along with a few techniques that can help you to start attracting initial users, it’s in your hands to put it into practice. 

The good news is that if you do this well, it can make a difference to your company’s bottom line, totally revolutionizing your approach to marketing, ultimately making your business much more profitable.  This is something that’s actually worked for us, and it could work for you too.  This was especially helpful in the summer of 2020 during the pandemic when we pulled back from some paid media. It was great that we had a channel of engaged users we could communicate with and reward them to come back and see us.

You can use these steps whether you’re setting up a brand new loyalty program or whether you’re breathing new life into a program that you’ve struggled to get off the ground.