How to Grow Restaurant Customer Loyalty

By: Melissa Canellis


Loyalty has become harder to earn as brands must deliver a top-quality experience across many different channels today. It’s also become harder to keep as customers’ preferences and lifestyles continue to change with the affects of the pandemic and a tighter economy.

The good news is that loyalty for brands more often than not translates directly to revenue. In fact, 43% of consumers spend more money at businesses they’re loyal to, and 86% of loyal consumers will recommend a company to friends and family. (Plus, 92% of consumers trust family and friends more than online reviews!) Thus, establishing a loyalty and rewards program that individually rewards customers and provides growing incentives for their repeat business and for their referrals is imperative for accelerating sales.

One of the most common customer experience failures by brands is redundancy. Restaurant chains need to safeguard against having an over-simplistic view of customers’ expectations. Today, consumers want to feel not only special, but also not be inconvenienced. They want a brand to know who they are and what they like so their experience overall is unique, memorable and easy. Having a generic marketing strategy that gives all customers the same experience is guaranteed to get stale as trends are constantly changing. 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, for online, in-store and in-app purchases is vital to a brand’s success.

Go Beyond Points to Create Loyalty 

Innovating to make customer interactions even faster, safer and more frictionless remain a priority. Forward-thinking brands concerned about customer longevity should look to customize a digitally-led customer loyalty program that allow guests to scan, pay, earn, and redeem all in one swipe. Your loyalty program needs to be integrated with your online ordering, payments, POS and more to deliver the best customer experience and results for your brand. 

Tiered memberships and challenges also offer brands different ways to encourage specific customer behaviors that help guests earn more attractive rewards through achieving higher membership levels with each visit. For example, Fuzzy’s Taco Shop utilized ML-enhanced customer segmentation based on optimized RFM into their campaigns. This new engagement strategy offered Fuzzy’s a way to communicate to their guests more intentionally – encouraging early-on engagement, incentivizing repeat visits and making them feel like a VIP – ultimately creating a layer of playfulness and additional membership culture to their base program. Fuzzy’s superfans now have a way to earn membership into their invitation-only Bite Club. 

Many brands are finding success by creating unique experiences for their members. For example, Pancheros went all-in on celebrating National Queso Day by offering free queso to all users on the app. While the results proved successful in terms of targeting new users and loyalists (redemptions increased by 202%), the real win was the experiential event that they activated alongside the promotion. Utilizing their loyalty program, they were able to identify the individual who ate the most queso over the course of a year and crown him ‘King of Queso,’ ultimately rewarding him with a year’s worth of queso.

Provide Powerful Personalization

By capturing every engagement touchpoint through your digital loyalty program you 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 will help you maintain 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.

Additionally, to better meet guests’ expectations, brands are expanding their reach through a growing ecosystem of feedback, seating, messaging, guest directory and more options that integrate key loyalty insights. For example, using integrated, location-specific feedback helps brands gain a complete picture of transaction and behavioral patterns, allowing marketing and operations teams to analyze and elevate feedback from customers at every location to deliver higher levels of personalization and garner increased levels of satisfaction.

Build Strong Relationships

Customers expect a consistent experience everywhere they interact with a brand. Restaurants are therefore tasked with creating modern loyalty interactions that can be seamlessly delivered to customers who are dining-in, ordering in the app, picking up or getting delivery. In a world where digital is first and customer expectations are higher than ever, implementing a robust fully integrated 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 deliver personalized experiences that are also effortless, high-value, and consistent between online, in-store and in-app channels. Let us show you with a personalized demo. 

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