Better than punch cards: Digital loyalty programs restaurants should use instead
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If you’re like most people, you’ve participated in some type of loyalty program restaurants offer. There’s something exciting about knowing you’re getting perks for being a regular customer. Who doesn’t enjoy getting that tenth smoothie or burrito free on a stamp card? A restaurant loyalty program like that works, and that’s why people do them.
But how should restaurants go about it? And what are some of the best options available in this age of social media and overwhelming choice? That’s what we’ll cover here. Welcome to your foolproof guide to diner loyalty.
An emerging trend in restaurant rewards
There are countless ways to go about customer incentives, but by building a successful digital loyalty program, restaurants can reap huge rewards. We’ve moved beyond the age of simple coupons or gift cards, though those are still valuable tools in their own right.
Customer retention is the goal of any loyalty program. But a rewards program that considers the ubiquitous presence of smartphones and social media can help restaurant owners amplify its effect.
If you want an example of how a virtual rewards system can be wildly successful and even its own business model, check out how Starbucks has essentially borrowed more than a billion dollars from its customers.
While restaurant owners don’t necessarily need to go that far—especially for smaller, non-chain operations—there’s a lot to glean from such a system.
With a digital customer loyalty program that rewards members, restaurateurs can better understand their customer base and improve the dining experience. They can also help provide valuable customer data so a restaurant can make well-informed decisions to deliver consistency day in and day out.
Let’s dive into some of the modern options available to restaurants to figure out the lay of the land and discuss some of the best ways to make and keep loyal customers.
Digital restaurant loyalty programs
Punch cards and coupons have been around for a very long time, but they’ve had their day. The way forward is to recreate restaurant rewards as a digital experience. Not only is it convenient and forward-thinking, but it also gives restaurateurs much more data to benefit from.
Many people are somewhat discouraged and overwhelmed by the notion of personal data mining, but it’s different for restaurants. If a restaurant can remember someone’s favorite table, birthday, or previous drink order, the customer will feel more valued by the restaurant.
Perhaps counterintuitively, using that digital data makes for a more human experience—providing warmth and familiarity. If you’re familiar with your customers and they’re familiar with you, that’s a good thing. Who doesn’t like a free item or birthday drink on the house?
There are many ways to create and operate such a program, so let’s cover a few restaurant loyalty program ideas.
Option 1: A simple loyalty card
A loyalty card is a familiar concept to many customers. Grocery stores, pharmacies, and, yes, restaurants have been using them for years. However, with data more easily accessible than ever before, an online loyalty card can be quite successful.
How exactly diners use this loyalty card depends on a restaurant’s style, but here are a few ways it can work:
- Customers can receive a number of points for each dollar spent. They can later spend these loyalty points on perks.
- Restaurants can offer perks like a free appetizer, free entree, or free happy hour cocktail after a certain number of visits or rewards points earned.
- Restaurants can reward new customers with free items, discounts, or free bonus points to make a positive first impression.
- Restaurants can reward people for bringing new customers—like friends or family—with extra loyalty rewards.
This loyalty card can be integrated with a POS system to help identify customer trends and make operational decisions to better meet your customers’ needs. We’ll cover the best methods for customers to use these perks and how to frame the program momentarily.
Option 2: A phone number system
A phone number system works like a loyalty card, except a customer doesn’t have to carry the card around and (likely) won’t lose it. But people are certainly wary of giving their numbers out to strangers these days, as it’s far too common for those numbers to end up in the hands of spammers.
For a restaurant that is dine-in only, this is not a great option—customers might be concerned their phone number might be sold to advertisers, or they’d be bombarded by marketing texts, for example. If someone feels taken advantage of, they’re not coming back.
However, for restaurants that offer casual service and do a lot of takeout or delivery via the phone, this can be an excellent way to track customer loyalty—as long as there’s a clear opt-in for those customers. Because a restaurant already has a customer’s phone number, if they call directly, no one will be weirded out by the restaurant keeping their number if they’ve already agreed to it.
The restaurant can then save the number and apply loyalty perks just as they would with a dine-in customer. If someone knows their tenth pizza will be half off or free, they’ll likely be quite comfortable with a restaurant keeping their number.
The bottom line is, make sure you let diners know why you’re asking for their number and be prepared to accept “no” as an answer.
Option 3: A mobile app
There’s a lot to be learned from the best restaurant loyalty programs. For example, take a look at what Starbucks has done with its Starbucks Rewards program. Their mobile app makes ordering super easy, and customers have also put a significant amount of money into the company.
By loading money into their Starbucks account, loyalty program members essentially loan the company billions of dollars at 0% interest. What’s more, this cuts out credit card companies and the fees they charge restaurants to operate. It’s shockingly clever, and customers keep coming back as well.
A mobile app is a great way to stay connected with customers beyond the dining room in general and incentivize rewards members to come back. Fast-casual giants like Chipotle or Panera have complex and well-developed rewards systems for customers. But it’s not for every business. Building such an app is a significant investment, and getting smooth functionality isn’t always a piece of cake.
Big companies can afford to build their own mobile app, naturally, but can small businesses? Perhaps you have the time and capital, but there are alternatives. There are loyalty program software solutions and apps available to small businesses. These platforms may be a great value-add without breaking the bank.
Option 4: An email/social media program
Another way to keep customers engaged is to ask them to sign up for an email list or follow a social media page to receive notifications when there are specials, discounts, and so on.
It’s important to note that email open rates can vary wildly, and you run the risk of spamming customers (spam is much less risky for followers on social media). It’s safe to say that everyone is sick of email spam by now, so your subject lines need to highlight some great rewards available in the emails for customers to open them. You need solid copywriting to keep customers engaged. That’s a complex process but very doable with the right team.
A social media loyalty program can be especially effective when combined with an online ordering system. If customers can simply push a few buttons to have takeaway or delivery, you’ve made their choice of what to eat that much easier. Additionally, having a strong social media loyalty presence can help introduce first-time customers to your pricing and menu options.
Be sure to use Yelp Connect on your Yelp page to share your rewards programs and encourage new repeat customers. Yelp Connect leverages the enormous amount of diners already on the well-known platform. You can use social media-like features that help grow your audience, reach diners with posts that appear on their Yelp homepages, and create custom call-to-actions.
Make it special and make it simple
Everyone likes to feel special. At the same time, no one wants to feel so special they get harassed by businesses they visit. The rewards should be there to enhance the customer experience, and that’s that. A happy customer will come back and, ideally, tell their friends about it. Rub someone the wrong way, and they’ll run. That’s why keeping rewards programs simple, value-based, and unobtrusive is the best way forward.
So, what does that look like? A good customer rewards program should be three things:
- Simple enough for absolutely anyone to understand
- Respectful of customers’ personal information
- Fun, memorable, exciting, and tangibly rewarding enough to be meaningful
Some fast-casual chains’ gamification of customer experience with badges, awards and the like works for them. If you think such a system might work for your fast-casual restaurant, go for it—just make sure the rewards are clear enough that customers know exactly what they’re getting.
For other restaurants, something like a free entree, cocktail, or dessert on X number of visits makes perfect sense. Bringing a new customer via referral earns Y reward—which must be specific, clear, and quantifiable. This should all be spelled out and clear to remove any mystery from the rewards program. People like honesty.
Make people feel appreciated
As a restaurateur and bar owner, I ran many unofficial rewards programs that kept customers coming back again and again. Being fully involved, I was aware of who were repeat customers and gave perks like free drinks or appetizers on a whim. Customers never asked for that, but a small amount of giving from an establishment goes a long way in building a personal relationship with a customer—something that should be the aim of every food and beverage establishment.
A regular customer brought a date? Drinks on the house, delivered with a smile. A new customer? Have a sample of our new dish. Is it a regular’s birthday? You can build a set of birthday rewards that suit your establishment, like free dessert, discounts, or more.
Gestures like this help build bonds between the customer and the establishment. Best of all, they cost the establishment next to nothing: Think in terms of wholesale cost rather than retail, and you’ll see you’re giving away very little. Keep in mind also that the rewards need to be significant enough to merit a customer coming back—free French fries on the tenth order don’t cut it. A bucket of beers or free entree might, though.
Running an establishment on such a personal basis isn’t always an option, especially since servers aren’t usually authorized to give away menu items for free. A standardized rewards program in place, however, is the next best thing to a gift from a friend.
Personalizing rewards programs with Yelp for Restaurants
Whatever rewards program you intend to offer, bolster it with vital customer info captured from diner visits logged via Yelp for Restaurants’ FOH software, Yelp Guest Manager. As it integrates with many POS systems, Yelp’s Guest Manager automatically stores the data a restaurateur needs to deliver a best-in-class dining experience to keep their customers happy—and returning. This includes saving data like customer birthdays, visit history, previous orders, and more.
If you want to increase your sales and grow your customer base, check out Yelp Guest Manager. It’s there to help, and it really does help. Feel free to look around and ask us for more details and a demo. We’d love to hear from you.