In uncertain economic times, your loyalty program gives you an opportunity to solidify bonds with your best guests and transform more transactional relationships into loyal, engaged connections. What’s exciting about these programs is that while they are plentiful, they are also diverse – restaurants can (and should) develop their own loyalty playbook as an extension of their brand. The offers and experiences you promote should reflect your brand values. There is always room to refine your program and ensure it is effectively building your business. In a recent interview with Forbes, Savneet Singh, CEO and President of PAR Technology, suggests a range of actions restaurant operators can take to test the effectiveness of their loyalty program. Among them: Measure your program’s return on investment – for both you and the guest. Track how your roster of members is growing, as well as how engaged they are. Monitor your average transaction values so you can ensure program membership leads to more spending – and take action to make improvements if it isn’t. Use surveys to gather feedback from guests to ensure they are satisfied with the program. This may also help you gather a continuous stream of new ideas to help you keep your program fresh. A majority of consumers – 55 percent – don’t use a restaurant loyalty program, according to a new study from William Blair. For restaurant operators, this represents a big opportunity for growth at a time when competition for restaurant spending is stiff and loyalty programs can cultivate stronger attachments to brands. As restaurants have stepped up their pursuit of guests in the past few years, these programs have evolved well past the punch-card system and even the digitized system of accumulating rewards points. Nation’s Restaurant News highlighted some of the newer offerings to come to these programs – and many of them focus on gamification, customization or otherwise elevating the experience around buying food from a certain restaurant. Jimmy John’s and Chipotle, for example, have introduced a competitive element to their programs: At Jimmy John’s, the “gauntlet” challenges guests to purchase all 25 sandwiches on the menu within a set time frame in order to win a Jimmy John’s beanbag chair, while at Chipotle, a sweepstakes-style program enhancement dangles the opportunity for 3,100 members to win free food for a year. Other brands are playing with the subscription model, offering tiered program options – some free and some paid – that unlock exclusive menu items, provide early access to events and products, or allow members to access different levels of giveaways and other perks. Limited-time offers are a critical tool for restaurant operators right now. While most restaurant brands won’t be so lucky as to land on the next Pumpkin Spice Latte or Shamrock Shake, LTOs still bring benefits that are especially helpful in uncertain economic times. They can motivate guests to return more often, inspire loyalty by helping your most frequent guests build rewards more quickly, and help you innovate on a shoestring by providing you with a vehicle for testing new ideas. They can also help you stay front-of-mind with guests throughout the year by giving you a regular stream of content to promote. Holidays and changing seasons can provide natural inspiration and launching points for new LTOS. Even the best idea won’t take off without a plan to help it succeed, however, so lean on your marketing and communication tools to generate awareness and interest. Get the word out about each LTO on your email list and provide an exclusive offer around it. Design a contest to generate buzz on social media around your offer, and make sure that all promotions — email, social media and in-store — link back to up-to-date information on your website. Make it easy for guests to get more information about your offer by using a QR code on all materials and linking it to key information on your website. Throughout the process, collect data on the response from guests that you can analyze in an effort to both feed your future plans for LTOs and also course-correct where needed. Enticing guests to splurge or treat themselves can be a tough sell when consumers are pinching pennies. But people still have to eat, so reinforcing the value you provide — not necessarily the low prices but the quality of the overall experience — can make coming to your restaurant a justifiable expense for guests. A recent report from Modern Restaurant Management shared how a range of different brands have been promoting value to guests, including a $5 off dine-in offer for a limited time this summer in an effort to help guests pay for gas, and an “inflation relief” menu that slashed prices by as much as 75 percent for a limited time. Offering discounts can only happen for so long at a time when restaurants themselves are also straining to eke out profits, so whether you’re cutting prices for a limited time or not, it’s just as important to think beyond the monetary value you provide. As you plan your promotions in the months ahead, think of the value you’re providing from different angles. Maybe you can help your guests solve a problem, like the offer above that helps guests pay for gas. Perhaps you can offer social value by bringing people together at a happy hour or other event. Maybe your brand is one that can offer psychological value because of the care you take in offering healthy options or your commitment to sourcing from sustainable suppliers. Weaving several kinds of value into what you offer can strengthen the offers you provide. Your efforts don’t have to be elaborate: Even a simple thank-you message to guests on your website and social media can help boost the good will that brings people back. During this period of high inflation, some restaurant leaders are noticing a reduction in sales or traffic, though this has been uneven across restaurant brands. A recent CNBC report indicated that at McDonald’s and Chipotle, lower-income guests were spending less and higher-income guests were visiting more often. On the other hand, brands including Starbucks, Bloomin’ Brands and Restaurant Brands International say they aren’t seeing major changes in guest spending. Regardless, it’s a good time for restaurants to focus on nurturing loyalty — particularly fine-dining and other higher-end brands that may experience more of a dip in business during an inflationary period. According to a recent survey of over 2,000 American consumers by LendingTree, half of consumers said retail, food and other loyalty programs are more important to them than ever. You can encourage consumers to make your business one of the ones they continue to visit in a rocky economy if you focus on offering special experiences — members-only dinner promotions, wine cellar tours or sommelier talks for your wine-enthusiast guests, or early access to reservations for a special event. Attract more guests who are similar to your favorite visitors by creating a referral program that offers a free appetizer or drink on their return visit, or some extra loyalty points in both accounts after a new guest signs up — it may help you bring both people back when they are looking for a place to dine together or with a larger group of friends. At a time when technology is replacing some interpersonal connections between your staff and guests, ensure that the ones you do have with guests are high-quality — remembering their names and food preferences, ensuring their payment is especially seamless, and simply welcoming them back like friends can go a long way. As inflation continues to weigh on the economy and consumers’ level of comfort in making discretionary purchases, there is that much more pressure on restaurant operators to make the experience of restaurant meals worth the expense. But doing so doesn’t have to be about expending significant additional effort. It can be about using your technology to drive an easier, more engaging, more personalized experience with your brand – one that will tip the scales in your favor when a guest is wavering about whether and where to order a meal. Your loyalty program is a key tool in this effort, but operators shouldn’t simply lean on a cookie-cutter program – particularly at a time when it’s increasingly common for tech stacks to integrate plug-and-play options to help operators gain a competitive advantage through building loyalty. Looking at the information you have collected about your customer base, what offers drive them to purchase repeatedly from you? As a recent report from Pymnts.com indicated, brands are currently looking to differentiate themselves with such features as in-app concerts, gamified rewards, and meal subscription services that allow users to earn back money with each purchase. Others are partnering with complementary brands to build engagement and ramp up the potential rewards on offer. To maximize your opportunities for continuously capturing the interest of loyal guests, ensure that at every step of a transaction, you’re weaving in your business brand language, making sure users’ experience is consistent regardless of how they are ordering from you, and that you’re collecting data that helps you monitor guest responses and making adjustments based on what you’re learning. You may not need one – yet. Without a doubt, nailing your loyalty program can pay off: Harvard Business Review reports that increasing your loyalty following by just 5 percent can drive profits up by between 25 and 95 percent. However, Fast Casual reports that although the average consumer belongs to 14.8 loyalty programs, they are active in only 6.7 of them. So while much has been said in recent months about how restaurants can use their loyalty program to set themselves apart and drive business at a highly competitive time, a loyalty program on its own can become simply a discount program – and no great help to you – if it’s not deployed properly. That means tying it to consumer buying behavior, driving more frequent visits, and then learning more from those repeat visits. Your existing guests are your most important ones to focus on here. Before you get to launching a loyalty program, start with maximizing your tech stack – specifically your customer relationship management and customer data platform (CRM/CDP) – to collect information about your existing guests, what they buy from you and when. Once you’re armed with those insights, you will have a clearer path to using that information to influence their future buying decisions (and making them truly loyal members of your loyalty program). As much as we all hoped and expected this summer would represent a return to pre-pandemic gathering and eating out, the delta variant has had other plans in store for many parts of the country. Restaurant operators, again, have been put in the challenging position of having to be enforcers of ever-fluctuating state and local regulations – all while continuing to juggle ongoing labor and supply shortages. If you haven’t already, it’s a good time to take a look back at your early-pandemic playbook and identify income streams that might help you weather the current challenges. That could mean posting new products for sale on your website, offering cocktails to-go if allowed in your state, and promoting family-style meal packages for guests who crave your food but aren’t yet comfortable eating out. Consider how your restaurant might adapt to the current situation of local consumers – whether that be a continuation of working from home or the beginning of hybrid work. Try to create stability, wherever possible, for both guests and staff. That could involve sticking with delivery and takeout service only (at least for the time being) or operating on a limited but set schedule. While it may feel like you’re missing opportunities to generate sales, guests and employees alike are likely to value predictability. Your loyalty program may help you here too. Do you want to boost visits on particular days and times? Increase your carry-out business while dine-in business is uncertain? Consider how you can incentivize your most loyal guests to help you keep business humming. |
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