New developments in loyalty programs are helping today’s savvy eateries embark on innovative and exciting rewards programs that customers better respond to. Examples include location-based messages that catch customers when they’re in the midst of making a purchasing decision, rewards programs that help diners save money at the pump, and the ability to collect customer data when patrons pay by phone or tablet.
An October survey by the National Restaurant Association revealed that more than 33 percent of consumers are more likely to use technology-related options in restaurants now than two years ago. What’s more is that 11 percent of adults use their smartphones to access rewards or special deals at least once per week.
Those are numbers that Tom Frost, CEO of Datum Corporation, a provider of IT solutions to multiple restaurant brands, says restaurants need to consider when creating loyalty programs. He calls the loyalty programs of the past several years “fully baked.”
“There are hundreds of them out there that service the restaurant industry and I think service the worst kind of client—the person who wants a discount,” he explains. “What we’re seeing now are programs that add technology as an amenity that can help better the experience for regular consumers at the restaurant.”
By allowing customers the opportunity to order by tablet or pay by cell phone, data for loyalty programs are collected much easier and can be aggregated for a loyalty program, he explains.
Compelling the most possible members to join is a crucial piece of the loyalty puzzle and one that many companies are working to perfect.
In December, Paytronix Systems, a provider of loyalty program solutions to restaurants, integrated with mobile games platform Gamescape to create a loyalty app at The Greene Turtle, a 37-unit sports bar and grill chain with locations in the Mid-Atlantic. On the app, customers pick the winners of upcoming professional games in the four major sports, as well as college football and basketball, and they earn points—typically $10 in Turtle Rewards—by picking correctly.
The app encourages guests to extend their stays at The Greene Turtle as they watch sports games and also to log onto the app more often to make picks. Behavior-triggered messages help marketers catch guests’ attentions when they’re in the middle of making purchasing decisions, says Kristen House, Paytronix’s product manager.
“This feature gives members a consistent reason to return to the app and stay engaged in the program over time,” House explains. “Also, guests of The Greene Turtle are compelled to join the program to play alongside their friends. High enrollment and engagement rates mean The Greene Turtle’s program is making an impact on its business.”
Nick Kegg, marketing director for The Greene Turtle, notes the company is driving registration to its rewards program at its highest rates yet, with 64 percent of game users returning to the game weekly. The most frequent game players spend 177 percent more than the average check and also visit the restaurant 565 percent more often.
“We are seeing an increase in spend and visit frequency in forms we never did before,” he says. “With very high game sessions on holidays [like Thanksgiving and Christmas]—days we were closed—it’s proven to make our brand part of the everyday lifestyle.”
In February, Paytronix also announced a partnership with Lettuce Entertain You Enterprises (LEYE), which transferred its 25-year-old Frequent Diner Club loyalty program to Paytronix’s platform. LEYE, which manages 52 restaurant brands, sees 18 percent of all guest spending come from its Frequent Diner Club.
The Rewards That Keep Diners Coming Back
A strong loyalty program should aim to enhance the human experience of dining—not replace it, says Annica Kreider, vice president of brand development at Mellow Mushroom. Last fall, Mellow Mushroom introduced karMMa, a mobile app that rewards loyal customers with discounts and other rewards. Diners earn karMMa points by scanning their receipts, and the points are then redeemable for free dishes or Mellow Mushroom merchandise.
“Since the majority of our customers carry a smart phone, we wanted to use the mobile platform to make redeeming rewards as convenient as possible,” Kreider explains.
Some restaurants are experimenting with loyalty by offering discounts outside of their stores. In November, Olive Garden teamed with Fuel Rewards, a national merchant program that rewards customers with savings at the pump. Through March, guests could earn savings at Olive Garden by signing up either online or through the Fuel Rewards app and links to a MasterCard account. By doing so, guests who spent $100 at Olive Garden began earning 20 cents off each gallon of gas and savings accumulate from there forward.
Brandon Logsdon, president and CEO of Excentus Corporation, which owns and operates Fuel Rewards, says the company has more than 4 million engaged members nationwide including retailers such as J.C. Penney and Toys “R” Us. Olive Garden is the first restaurant to join the program.
This evolution of loyalty programs is about restaurants that separate themselves from the competition. According to House at Paytronix, the next progression of loyalty programs will be apps that enable brands to address their members in the proper context.
“For example, if a member is at home, far away from the restaurant, they should be shown a location finder or online ordering service,” she says. “If they are in the location, on the other hand, the app should be sophisticated enough to check the member in to the location and able to seamlessly identify themselves as a loyalty member.”