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. The battle to win loyal guests continues in the restaurant space – and lately, many restaurant brands are vying with each other to stand out in the market with perks including special experiences and merchandise in addition to food. Amid economic challenges like higher interest rates and more controlled consumer spending, loyalty programs have become critical for restaurant brands. However, some brands have been pushing so hard to attract guest sign-ups that those with franchisees are getting some pushback from operators about the new offerings (and therefore delivering an uneven experience with regard to the loyalty rewards offered). If you’re trying to fine tune your loyalty program right now, it’s most important to be able to run it consistently and efficiently. Above all, keeping your loyalty program members interested and engaged means keeping your program simple. It should be easy for your guests to sign up and understand how they can accumulate rewards – and they shouldn’t have to jump through hoops to redeem them. Your guests should have the same loyalty experience across your stores. When you can deliver these things, you may be surprised to see how much your loyalty members value them. Case in point: An annual loyalty survey from Deloitte found that as consumer participation in loyalty programs has increased, it’s been fairly even across paid and free programs. So you may have an opportunity to offer a paid program that allows you to deliver a more premium experience and incentivize additional guest engagement and spending. Your loyalty program members are valuable – but do you know exactly how valuable? A recent Paytronix study may provide some insight. It collected in-store and online transactions for full-service restaurants, quick-service restaurants and convenience stores that occurred between January 1, 2020 and June 30, 2023. The results confirmed that active loyalty program members are climbing steadily, with FSRs seeing a 16 percent increase in members and QSRs seeing a 24 percent increase over the course of the study. But how these people are spending is more telling: The research found that in 2022, FSR and QSR active loyalty members had check sizes that were at least 5 percent higher than those of non-loyalty members. Further, the top 10 percent of active loyalty program members were responsible for nearly half of all loyalty visits (and spending) across concepts. These guests are true VIPs. In your restaurant, are they getting some special focus? There is a lot of noise in the loyalty space right now, with restaurant brands making bold offers aiming to grab people’s attention and generate increased program participation. But the offers may not even be practical for most guests. Drilling down on the data you have about your best guests will always be most helpful in determining how to take care of them. What do these guests love about your restaurant? Is it your homemade pasta? Your inventive desserts? Your friendly staff? Can you build an event, a reward, or simply include a personal touch around these elements for your best guests? Consumers can be tough to please – and when you add higher menu costs, smaller portions and substitute ingredients to the mix as restaurants have had to do in recent months, it becomes extra challenging to try and win guests and retain them for the long term. But experience still counts for a lot – it’s what is making people choose restaurant meals over meals at home right now – and your restaurant can provide it in little (sometimes free) ways that pay off with guests. Consider how well you’re managing these parts of the restaurant experience: Be prompt with your greetings when people walk in the door. Offer water to guests waiting for a table and promptly collect drink orders from guests who are seated in your dining room. Encourage your staff to recommend dishes to guests – it demonstrates that they care about (and enjoy) the food they are serving and it presents your employee culture in a positive light. Take care with cleaning your dining area and restrooms. Leave people with a positive final impression by making your guests’ exit from your restaurant as smooth as possible – by allowing them to pay via QR code, or letting them split checks without fuss, for example. Finally, find ways to reconnect with them after they leave. That could be sending a loyalty program member an email on their birthday. Or, if a new guest provided their email address when making their reservation, follow up with a guest survey, an invitation to receive future offers, and maybe a free appetizer if they return to you within a few months. |
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