Loyalty programs are an opportunity for full-service restaurants to increase the rate of return customers. According to Intouch Insight's recent survey, 65 percent of respondents are more likely to choose a brand over its competitor if they have a loyalty program. But it’s difficult to build a program that is actually useful—many consumers who sign up for loyalty programs don’t take any action beyond that. What exactly hinders customers from participating in loyalty programs, and how can restaurants make them more successful?
Many factors contribute to the success or failure of loyalty programs. Employees must believe in the program’s benefits if they are going to share it with customers. Customers should be given ample opportunities to learn about the program. Accessing the program must be easy for employees and customers, and retrieving the benefits needs to be intuitive enough that customers feel comfortable doing so.
Nearly 30 percent of respondents who are part of loyalty programs said they learned about the loyalty program because an employee told them about it. This outreach tactic hinges upon team members being knowledgeable about the benefits of a loyalty program and believing customers can benefit from it. “How do your employees talk about the loyalty program? You must build those talking points into your processes to eliminate those friction points,” Laura Livers, head of strategic growth at Intouch Insight, says.
Many full-service restaurants are looking to start loyalty programs or already have a program started. The survey showed, however, that 46 percent of respondents who were not part of a loyalty program didn’t sign up because they did not know about it or had not been told about the program. Whether starting a loyalty program or keeping one running, it is integral that employees genuinely want to share the benefits with customers.
“Getting the staff to support the program sincerely with passion, a good staff can get to know your name and make your experience. Getting the staff engaged in the loyalty program and incentivizing the promotion of the program will benefit the chain. If you can incentivize the staff, they'll do it,” Livers says. “They win, you win, and the customer wins.”
Interactions with staff at a restaurant are an important part of making loyalty programs successful; however, signage’s importance cannot be understated. Sixty-four percent of respondents in the survey reported they learned about a loyalty program because of a restaurant's signage.
Clear signage posted amply throughout the restaurant is crucial. Table toppers, cash registers, and bathrooms are all good places to consider advertising loyalty programs. “The signage is important. The message is important for loyalty programs' success,” Sarah Beckett, director of marketing at Intouch Insight, says. By creating obvious signage for loyalty programs, operators can give customers a chance to consider the benefits of a loyalty program.
Making sure customers sign up for loyalty programs is just one part of a successful program. The next steps are ensuring that customers feel empowered to actually use the program, and measuring the program’s success. “One out of five people said that they found it difficult to collect points physically in the restaurant because it's easier to do in the app when placing an order. It is more difficult in person. There is that friction point that operators must consider how to alleviate within that physical experience,” Beckett says.
Removing any ambiguity when accessing the benefits of a loyalty program is necessary. According to the survey, 20 percent of respondents found it difficult to redeem rewards. Of that 20 percent, 51 percent stated it was because they forgot, 40 percent stated they did not know how to collect, and 23 percent stated they were uncomfortable asking a server. To see how successful a loyalty program is and where it can be improved, restaurants need to check metrics regularly. Operators can give surveys to customers, measure how often customers are using the loyalty program, and see how customers are using their rewards.
All these factors reveal the importance of making a loyalty program simple and identifying possible friction points quickly. “It always comes back to how to remove those friction points. How do you position it to your consumers so that they see the value in it?” Beckett asks.
Post-COVID-19, customers’ dining needs began to evolve rapidly, and restaurants began to offer a wider variety of ways to dine and engage with their brands. Whether ordering through a delivery app or doing contactless payment and pick-up, restaurants have an opportunity to engage with customers across more dining occasions than ever before. This means that loyalty programs need to work seamlessly across these various customer touchpoints and can be used to keep guests coming back. Whether diners encounter a loyalty program in person, through an app, or on a website, restaurants must make sure the technology supporting it is intuitive and easy to use. “Success is understanding your audience and what will resonate with that audience and then executing it effectively,” Beckett says.
Restaurant loyalty programs need to be well-communicated, easy to access, and beneficial to customers. Restaurants also need to measure the success of their program to learn how it can be improved. Listening to customers’ and employees’ experiences with the program—and acting on their feedback—can help build a strong relationship between a brand and its customers. Loyalty programs offer a well of opportunity to restaurants but must be executed well to maximize their benefits.
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