Loyalty has long been part of the food service industry landscape, with brands like Starbucks and Panera leading the pack for years with revolutionary programs. Even the most successful recent launches at McDonalds, Popeyes, and Taco Bell came as little surprise as loyalty has been a proven method for years to attract, retain and reward loyal customers. Yet, the adoption of loyalty programs and digital innovation, in general, has been slow for the full-service sector. Some attribute this to how far behind the industry was across their channels, requiring them to innovate almost overnight to build up systems to support delivery, curbside and online ordering. While this may be true, time may also be up.
Recently, the casual dining breakfast brand Snooze an A.M. Eatery announced they had just launched their new loyalty app, one that integrated directly into their waitlist system. A few days later, Red Robin cited in their most recent earnings call that alongside improved cost measures, their new loyalty program was a critical factor in its 21 percent revenue jump.
Simply put, we are seeing the rise of loyalty in full-service establishments.
Customers have many expectations regarding loyalty programs, particularly when it comes to the full-service or casual-dining space. What makes the casual-dining industry so different is what the customer expects from their visit. Overall, casual-dining restaurant loyalty members are looking for enhanced experiences more comparable to the travel industry. Like travel, casual dining is perceived as a special event, and that experience needs to match or exceed the value. This naturally lends itself to more experiential rewards or extras, as well as smaller, more frequent rewards to encourage frequent visits.
With that being said, there are a lot of differentiators for this sector, when it comes to loyalty. Here is what full-service operators need to know as they face the coming tide of loyalty within the casual dining space.
Guests Expect to be Rewarded
One thing that fast-food brands are doing exceptionally well is serving up personalized engagements. Not only do their loyalty programs deliver multiple ways to interact with the brand like redeem online, in app or in store, they also provide multiple ways to deliver rewards, including banking points, tiered systems, and experiential gifting. This flexibility provides customers with unique ways to not only redeem, but feel like they are being rewarded for each and every engagement. As this sense of “feeling” becomes normalized across quick-service and fast-food brands, casual-dining concepts will need to keep up. That’s because each and every visit for the guest becomes more entrenched in whether they feel “rewarded” for the visit, sometimes beyond enjoying the food or experience. That’s a systematic change for most operators who were able to bank on visit frequency based strictly on special events, family gatherings, or even catering sales.
Mobile As a Must
It’s no secret that consumers have spent the last decade living on their devices. The rise of the unlimited memory in today’s mobile phones means they also now can support the arrival of hundreds of apps, from a multitude of brands. Officially, the floodgates have opened and having a functional app is no longer just a nice-to-have, it is now a necessity. What casual dining still needs to discover is how these apps integrate into their existing systems. Curbside and online ordering capabilities handled through a branded app offer restaurants the benefits of creating a frictionless, safe, end-to-end experience for customers and employees. When integrated with loyalty, you have a seamless way to not only track all of the various touch points your consumer has with your full-service brand, but also a way to continuously engage and reward them.
Value Rises with Inflation
With the rising costs of commodities, gasoline and wages come more challenges than ever for the full-service operator. The very nature of their business is based on more menu options, a larger staff, and of course, more of a focus on an elevated experience. This means clean and routinely renovated facilities to ensure the diner sees the value of a slightly higher visit transaction. While these factors remain inflexible, what is changing is the customer’s views on value. Consumers now evaluate value props based on a seamless transactional experience and convenience of engagement, no matter how they order. So your curbside or loyalty interaction should be as easy and on-brand as dining within your four walls. Time is money in their eyes, and as inflation continues to impact families nationwide, it will continue to factor into their dining decisions.
Full Service Needs to Deliver Experiences
We named several ways that quick service and fast food were using loyalty effectively, but one of the most significant differences between them and full service is how loyalty should be used. Couponing is only an effective method when costs are low on SKU level items. Therefore, full service has to re-evaluate what they offer for a busy, cost-sensitive consumer. Namely, what experiences can you provide? Some of the brands that have done this most effectively are those thinking outside the box. Consider the value behind offering a monthly “Buy-One-Get-One” pasta subscription or exclusive menu items/LTOs for your top-tier loyalists. Work within the boundaries of your waitlist and offer fast-tracking of seating for frequent guests. We’re even seeing experiential gifting by awarding fans lifetime memberships to menu items or meet and greets with celebrity spokespeople.
Quick-service concepts may have had the initial leg up on loyalty, but full service and casual dining are not far behind. That’s because loyalty programs can be not only a profitable endeavor on the part of the brand but also cultivate a better customer experience. And casual dining is all about experiences.
Brittany Maroney is an 18-year veteran of the restaurant industry, where she has spent her career growing concepts and driving brand loyalists. As the director of marketing and communications for the premier loyalty software solution Punchh, as well as for PAR technology, Maroney brings unique insight into the challenges and opportunities of restaurateurs across the nation.