Loyalty Program – 10 Reasons Why Your Restaurant Needs it

A restaurant loyalty program is a form of marketing strategy. It is utilized to boost the loyalty of your customers. It also encourages them to return and generate more sales. There are so many reasons why you need a loyalty program for your restaurant. However, this article will cover these reasons.

Loyalty programs mean customers spend money to get point-based rewards or additional incentives. This simply means that the more money they spend on your business, the more points they earn. When they have accumulated a certain amount of points, they can use it to claim freebies. This will include discounts, free products, rebates, a free meal, and other types of promotions.

Loyalty programs compel your customers to have your restaurant as the first option. Especially when they want to go out. Implementing a loyalty program is the most immediate action you can take. It will build a long-term relationship with your customers.

According to the Bond Loyalty Report, 72% of customers are more likely to recommend brands with good loyalty programs. Also, 78% of customers are more likely to continue business with brands because of loyalty programs. This just shows the importance of offering a competitive loyalty program in your restaurant.

This program also serves as a means for your restaurant to get to know its customers. When customers sign up for your program, a plastic or digital loyalty card is given to them. When they fill out their member profile, you gain personal information about them like their names, birthdays, etc.

10 Reasons Why Your Restaurant Needs a Loyalty Program

Loyalty programs have become a common trend in the restaurant industry. Above all, they are essential to the increase and retention of customers. Here are 10 reasons why your restaurant needs a customer benefit program:

1. It Increases & Improves Sales

Loyalty programs encourage customers to choose your restaurant over the competition. When your customers become loyal members with access to special offers, they patronize your business more.

With the shift to mobile programs, restaurants can now remind customers about their menus and specials. Restaurants can also send coupons and promotional information. This will influence the choices of those who receive the messages.

2. A Loyalty Program Builds a Rich Customer Database

Loyalty programs give your restaurant the ability to build a database of your customers This will include personal information like names, phone numbers, emails and meal preferences. Therefore, a restaurant can build or customize personalized marketing strategies for its customers.

For instance, you know a particular customer’s preference for barbecue ribs from their previous order history. You can use this information to offer a coupon or a discount. A restaurant can also utilize a rich database to customize offers. Therefore, this can lure dormant customers back to them.

3. It Improves Customer Relationship

With the database created through the loyalty program, restaurants can create a memorable dining experience for their customers. This could include offering exclusive deals on special occasions like birthdays or anniversaries. In brief, these gestures go a long way in building a strong connection with your guests.

But this relationship takes time to develop but yields results when done right. You will realize customers will be bringing in new people to visit their trusted and favourite restaurant. Therefore, by designing and executing a great loyalty program, you can easily connect with more customers.

4. It Allows Restaurants to Communicate Directly with Consumers

Loyalty programs focus on specific areas relevant to customers. Especially those who have expressed interest in what a business has to offer. To this end, this will lead to businesses being able to initiate communication with them. According to the 2014 Bond Brand Loyalty Report, customers’ overall satisfaction with loyalty programs is almost 5 times higher when they receive relevant communications.

Hence, setting up a loyalty program allows for direct communication between a restaurant and its customers. Besides, this has proven to significantly increase engagement, retention and sales.

5. A Loyalty Program Encourages Word-of-Mouth Advertising

Word-of-mouth advertising is one of the best cost-effective forms of advertising. Consequently, it helps in the promotion of businesses. If your restaurant satisfies the needs and desires of its customers, they will in turn promote you to others. A satisfied customer is more likely to share their feedback, experience, and benefits with others. Thus, this unpaid advertisement can convince many potential customers to patronize your restaurant. Furthermore, they will become loyal members.

loyalty program

6. It Enhances Brand Reputation

Loyalty programs provide a strong branding opportunity and a properly thought-out program. This can deliver better deals and rewards to your customers. It can also help in improving your brand’s reputation. By offering customers various deals and offers based on each purchase they make, you will be able to show them that you value their support.

Thus, be a restaurant that offers personalized services based on the interests, preferences, and buying patterns of their customers. In fact, this will make them feel more valued. Also, creating loyalty cards with your brand’s logo and colours can spread awareness of your brand. Plus help differentiate between you and your competitors. All these will create a positive impression of your restaurant in the minds of your customers. It will also help boost your reputation.

7. It Brings Back Repeat Customers

A well-planned and strategic loyalty program can turn an occasional diner into a frequent diner. Also, with each reward your customer gets, the thought of other restaurants will be pushed from his/her mind. Hence your restaurant will be pulled to the forefront of their minds. Customers, irrespective of the business they are involved in, are taken with the idea of value. Therefore, make it valuable for them to return to your establishment.

It is important to tailor your loyalty program with the perception of greater value. Customers will be enticed by the idea of you having an edge over a rival restaurant. Moreover, this will serve as an incentive for them to keep choosing your business. Loyalty programs reward customers for their continued patronage and loyalty. And this makes them happy. Also, a happy customer is a potential repeat customer.

8. A Loyalty Program Makes Customers Feel Appreciated

The goal of loyalty programs is to appreciate your customers for their patronage and retain them. While gaining new customers. Retaining customers and giving them a reason to patronize you is of utmost importance. Especially if you want to build a profitable and sizable business.

Your loyalty program has to be tailored in such a way that no one customer feels left behind. Therefore, personalize your loyalty program. Make your customers feel like they are part of the restaurant’s family. Customers love to feel appreciated and stick to wherever they get that appreciation from.

9. It Creates Happier Diners

The idea of value is tied to happy customers. Loyalty programs indicate that customers get something back from the restaurant. Especially when they participate in these programs, and they do. They get information, discounts, and promotions that those who don’t participate in the program may never see. This makes the customer feel like they benefit a lot from a restaurant they dedicate their time and money to. Plus they also have the sense of being in an exclusive club. A club only a select group benefits from.

This gives the program a special feeling of belonging. So this is how you can hold on to your customers. They feel special and they want to remain that way, so they stay. Customers can also tell their family or friends about your special program. Thereby inviting them to join and be a part of the exclusive club.

10. It Keeps You Competitive

Loyalty programs are quite popular. Almost all major and small restaurants have a loyalty program or are planning to have one in the immediate future. In light of this, you are always going to be on your toes. You will always be sourcing out better ways to retain your customers and gain new ones. This can prove thrilling and highly rewarding if done right. Remember that the more customers make repeat purchases, the more their lifetime value to a brand ultimately increases.

Global Loyalty Program Trends Report 2022

According to the Global Loyalty Trends Report 2022, here are 6 key trends to boost your loyalty program.

  • #1: More Redemption Options Lead to More Customer Spending
  • #2: Successful Brands Focus on Member Growth and Engagement
  • #3: Special Perks and Tier Systems – Adding More Value To Your Program
  • #4: Higher Customer Spending and More Members Through Expanding The Partner Portfolio
  • #5: High-Engagement Brands Focus on Quality-of-Life Investments For Their Loyalty Program
  • #6: 2022 Tech Investments Center Heavily Around Emerging Technologies

Conclusion on Benefits of Loyalty Programs to Your Restaurant

A loyalty program has numerous objectives. It can range from an increase in sales to building a customer-company relationship. It is important to note that customers should find loyalty programs appealing. Because they help encourage them to return to the restaurant.

Investing in a loyalty program is worth the effort if it is designed and executed properly. With their advantages and high success rate, loyalty programs are set to become the most indispensable tool for restaurant marketers.

The goal for your restaurant will be to get high-ranking customers. Hence, we have built a guide on how to achieve that.

Richard Dappa
Richard Dappa

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