Loyalty programs continue to multiply, as operators set up these systems by themselves or with the assistance of third-party companies.
The programs are taking various forms, offering discounts, freebies, and other benefits to entice devoted guests to return more often and spend more money. For a company like Chicago’s The Fifty/50 Restaurant Group, it was necessary to take a second look at its loyalty program after its initial effort, launched about four years ago, dwindled to a fraction of users from its original base.
“We made some mistakes [with the first program],” says group co-owner Scott Weiner. “About a year ago, we knew we needed to do things differently and devote the required time and effort on it. That’s when we started to put our new program into place.”
Linked directly to the group’s enterprise system, the Fifty/50 loyalty card is now in the hands of 10,000 customers of the company’s six concepts that encompass 10 units. Having a loyalty program is “a must” for restaurant companies these days, says David Scott Peters, founder of TheRestaurantExpert.com, a Phoenix, Arizona-based consulting firm. “It’s such an important part of doing business today,” he explains.
There are only three ways to build sales, he notes: bring in new guests, an expensive but necessary tactic; encourage customers to come back more often; and spur customers to spend more. Loyalty programs help achieve the latter two.
A report by Forrester Research, a Cambridge, Massachusetts, market research and advisory firm, reveals that 71 percent of American adults who go online belong to at least one loyalty program, and on average they belong to nine. While having a loyalty program is an increasing necessity for operators, “you have to be smart about how you do it," Peters says, including not being overaggressive, whether in granting rewards or in communicating with guests by email.
At Fifty/50—the name comes from the way Weiner and business partner Greg Mohr have equal but unique viewpoints in approaching restaurant challenges—the new loyalty program is focused on ease of use for guests and gathering important data about them.
“As the company has grown, we know people have more reasons to be a loyalty member,” Weiner explains. “With one or two units, that is one thing, but with nine or 10, it becomes more important for guests and for us.”
For one thing, it’s difficult for a smaller company to dedicate the people and resources into maintaining and growing a loyalty program, a problem Fifty/50 faced with its original one. “You can’t just set it and forget it,” he notes. “That doesn’t work.”
The growing restaurant group now includes the namesake Fifty/50 upscale sports bar and comfort food restaurant, several Roots pizza and pasta units, West Town Bakery & Diner casual diners/full bakeries, and two cocktail lounges, The Berkshire Room and The Sixth.
Although loyalty program members get a card, it’s not necessary to carry it—the information is available at any of the restaurants’ point-of-sales sites. Weiner says the benefits are structured better this time. Points are awarded depending on dollars spent, and dining rewards—$20, $25, or $30, depending on the membership level determined by total points acquired—are granted at each 300-point increment.
All members get $20 in dining rewards during their birthday month, and they can track their point totals on a dedicated website. Top-level members have access to additional benefits, including the opportunity to participate in special events and promotions. One thing loyalty program members don’t get: inundated with emails about special deals and promotions, Weiner says. The offers usually come only a few times per quarter.
“We don’t want to kill you with spam,” he explains. “We try to make our program fun, so maybe during football season we will offer double points for Monday Night Football or triple points for those guests ordering their holiday pies.”
The results so far? Loyalty card members are spending more—an average tab of $56 compared with $36 for regular guests at Fifty/50 and $49 vs. $33 at Roots, for instance. The program also provides Fifty/50 with plenty of data on its individual members.
More changes are projected for the loyalty program, including mobile applications, additional benefits, and even special tie-ins with popular suppliers, such as brewers. “We want to continue to make this a better program for our loyal customers,” Weiner notes.
By Barney Wolf