​If your guests seem to be tightening their belts as bills roll in after the holidays, it might feel like offering discounts is an unavoidable path to sustaining traffic. Inflationary challenges are only increasing these pressures. According to Technomic’s David Henkes, restaurant menu prices are now 28 percent higher, on average, than they were in 2020. “When you’ve got higher prices and declining traffic, you see deals,” Henkes said during a session at CREATE: the Event for Emerging Restaurateurs in Nashville in October. But offering discounts can land operators in a challenging cycle where their inevitable menu increases become more visible to guests down the line. There are other approaches to consider before resorting to discounts: Henkes suggests doubling down on limited-time offers and menu innovation to build and maintain guest engagement. LTOs give operators room for experimentation and trial and error, all while making menus more interesting and dynamic. Currently, the presence of craveable, unique LTOs is a key factor consumers consider when deciding where to dine out. So where can you focus your offers? One area ripe for innovation right now is the beverage category, since so many consumers are looking for alternatives to alcohol. You can also tap into the on-trend flavors of the year, like unusual coffee drinks and Haitian cuisine, according to Datassential. (Need help with your LTOs? Note that US Foods offers a range of prepackaged LTO concepts that include the recipes and marketing materials an operation needs to bring an offer to fruition.)

Returning guests are your business’s shining stars. According to research from Incentivio, loyal guests contribute the largest part of a restaurant’s recurring revenue (10-20 percent). But at a time when every business seems to have a loyalty program, it’s important to look for ways to continuously innovate your approaches to driving repeat visits. Otherwise, it becomes too easy to get lost in the stream of loyalty offers available.
A recent report from Modern Restaurant Management predicts that memberships are Loyalty 2.0 for restaurants – and even fine-dining restaurants will be getting into the mix with bigger-ticket monthly memberships designed to entice guests to come back. Some foodservice brands have already begun offering wine memberships that come with free tastings, dining discounts and wine deliveries. Others are offering membership tiers good for such perks as free delivery, free drinks, priority reservations and birthday bonuses.
Looking at your menu and service model, where could you benefit from offering a membership? Perhaps you could use your morning coffee business to help drive sales of your bakery items – or give a creative chef (and your guests) an opportunity to test a rotating menu of global dishes. Memberships could be a natural winner for your bottom line, generating a guaranteed income stream whether guests visit or not.

A 2024 Deloitte Holiday Retail Survey found that consumers are doubling down on experiences this holiday season – choosing to spend more money on activities that they (and the people on their shopping list) can do as opposed to things they can buy. Specifically, consumers are seeking out travel, holiday events and opportunities to socialize. As you roll out your holiday offerings, it may help to plan some promotion about the experiential side of each offer. Consider partnering with complementary restaurants or other businesses on a special menu of local specialties, packaging a food bundle that includes a holiday music playlist and a dining voucher, or planning giftable events like a cooking course or a wine and cheese night with a visiting author, for example.
Providing a memorable experience goes hand-in-hand with offering value, so the season is an important time to reinforce loyalty offers that provide a strong value. A consumer industry study found that increasing trust with existing loyalty program members could potentially increase annual spending by 30 percent – and these gains were primarily connected with offering personalized experiences at scale. You might offer increased loyalty rewards when people sign up to your subscription meal delivery or bottomless monthly coffee deal, buy your holiday-themed limited time offer at a time when you need to drive traffic, or simply check into your restaurant online this holiday season.

​It’s so much easier to bring existing guests back to your restaurant than to attract new ones – and your loyalty program is a vital tool to help inspire return visits and make them feel worthwhile to people. But at a time when loyalty programs are available at so many restaurants (as well as at more indirect competitors like convenience and grocery stores), it’s important to make a program relevant to each guest. McKinsey research found that businesses that excel at personalization generate 40 percent more revenue from their personalization efforts than businesses that are more average performers. But there is a lot of room for improvement here, according to a new loyalty report from Paytronix. It found that only 44 percent of consumers say the offers they get are relevant, indicating a desire for higher levels of personalization. Even if your business offers some kind of loyalty program segmentation – most brands do – are you sure it’s hitting the right notes with guests? The Paytronix research found that successful programs offer differentiation so each member gets what they crave, an emotional connection using such tools as historical data about past orders or celebratory offers on birthdays, and brand affinity so guests connect positive experiences with your business. This requires understanding guests at a granular level. AI and machine learning technology that is baked into many new platforms is helping to give operators a leg up in this area, delivering flexibility and deep segmentation so they can offer the kinds of extremely relevant experiences that make guests feel the emotional pull to return, do so more regularly, and spend more when they do. 

It’s about five times as expensive to acquire new guests as it is to retain existing ones, according to the business consultancy ITA Group. Loyalty programs have become critical differentiators for restaurants looking to boost their retention – and the loyalty points these programs allow guests to accumulate are powerful currency. Unfortunately, this also makes programs appealing targets for fraud. The Loyalty Security Association estimates that $3.1 billion in redeemed points are fraudulent. Fraudsters may try to hack into a restaurant’s loyalty system and manipulate points or redeem them illegitimately, access personal information for monetary exploitation, or even create fake programs that mimic (and damage the reputation of) legitimate ones. As a result, it’s important to ensure your program uses layered security measures to protect the information it holds. This includes monitoring each transaction to ensure its authenticity and confirm it comes from a trustworthy source, alerting you to potential breaches, and preventing users from creating fake accounts. At each step in the guest journey, automated checks should authenticate the transaction in a way that protects the security of the system from fraudsters without impacting the seamlessness of the process for valued guests.

​Strengthening your emotional connection with guests
Recent research has found that as critical as it is for businesses to increase their guest loyalty right now, consumer loyalty has been falling. A Salesforce survey found that the portion of consumers who feel emotionally connected to brands fell from 62 percent in 2022 to 54 percent in 2023. As technology has become a necessary part of operations for many restaurants, there has been greater potential for the brand experience to get watered down. As a result, loyalty needs some careful management. Precise, data-driven personalization is at the heart of it. In a Restaurant Dive interview, Rick Camac, executive director of industry relations at the Institute for Culinary Education, said that brands that keep the same rewards without measuring the emotional connection they make with loyalty members will ultimately lose value and customers. Chipotle, whose rewards program grew almost 14 percent to more than 36 million members in 2023, is using a “personalized decision engine” to identify the free items their rewards members can receive through Freepotle, a perk the brand launched last year to drop 10 free food items into rewards program members’ accounts over the course of the year, the report said. Providing guests with such offers not only makes their experience with the brand feel fun and special – it also helps Chipotle collect reams of additional data about the kinds of items rewards members like receiving from them. That data can, in turn, feed their plans for future menu items, specials and targeted rewards offers. Earning loyalty doesn’t have to involve offering large amounts of free food, either. Consider gamifying your program with a rotating list of contests throughout the year. What might your brand do to strengthen its emotional connection with guests?

Name a major restaurant brand and chances are that it has relaunched its loyalty program over the past year. As competition has increased along with consumers’ need for value, more brands have reinvented their loyalty programs to meet the moment. If your program hasn’t had a refresh in a while, make sure it’s not only driving return visits but also allows guests to earn rewards in ways that work long-term for both your business and your guests. For instance, Sweetgreen Chief Marketing Officer Daniel Shlossman said in an interview with PYMNTS that points-based systems, for example, can lead to situations where guests become rich in rewards and ready to redeem them, while the restaurant has to respond to the high demand by degrading the value of the rewards. For that reason, Shlossman said, Sweetgreen decided to offer a gamified approach that rewards guests in exchange for certain kinds of purchases – and enables to brand to provide different offers to different kinds of guests. If you have a loyalty program, have you tested it to better understand how guests will be able to redeem rewards months down the line? Do you have the flexibility to recalibrate your program to manage the demand? Are you offering the kinds of rewards that provide a little incentive for different subsets of your most loyal guests?

Strong third-quarter retail sales and overall growth in the U.S. point to a promising sign for restaurants as the holidays approach: Consumers may be looking to spend more freely than they spent in earlier months of the year. Are you ready to make the most of guest traffic? First lean on your technology – to enable seamless payments in the forms guests prefer, to generate greater participation in your loyalty program, to anticipate high-traffic peaks (and valleys), to schedule staff accordingly, and to deliver targeted promotions to guests looking to get out and celebrate with others over the festive period. Assess potential bottlenecks in your various sales streams, as well as opportunities to promote different parts of your business that could do especially well over the holidays. For instance, what mechanisms do you have in place to manage catering orders, track reservations, maintain your ingredients for your most popular holiday dishes, and promote retail items? What safety nets are in place to support you when problems happen? It can help to review the guest journey along every sales stream you have, gather feedback from staff about what works well and what needs to improve, and to check your online reviews to identify parts of your business that may need attention.

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?