Loyalty programs ·
Restaurant Loyalty Programs: Tips, Examples & Strategies
One proven strategy for enhancing customer retention is establishing a compelling restaurant loyalty program. This not only incentivizes repeat visits but also builds a deeper connection between the brand and its customers.
What are Restaurant Loyalty Programs?
Restaurant loyalty programs are structured marketing strategies designed to encourage customers to continue to shop at or use the services of businesses associated with each program. These programs reward loyal customers who frequently dine at a restaurant, enticing them with incentives such as discounts, freebies, special menu items, and priority service.
How Restaurant Loyalty Programs Work
Restaurant loyalty programs operate on the principle of giving customers rewards or points for every dollar they spend at the restaurant. These points accumulate over time and can be redeemed for rewards, promoting customer engagement and repeat business. Some programs use punch cards, while others utilize mobile apps or QR codes, offering a seamless integration with digital platforms for online ordering and point tracking.
The Types of Loyalty Programs in Restaurants
There are several types of restaurant loyalty programs, each catering to different customer preferences and operational scales. Some of the most popular include:
This is the most common type, where customers earn a certain number of points per dollar spent. The points can be redeemed for rewards once a threshold is reached.
In this system, customers progress through levels based on their spending. Higher levels unlock more valuable rewards.
Customers pay an upfront fee to get access to exclusive benefits.
A simple, physical card where a 'punch' or stamp is given per visit or item purchased, with a reward after a certain number of punches.
Restaurants partner with other businesses to offer reciprocal benefits, expanding the range of rewards for customers.
A combination of two or more types of programs to cater to a broader customer base.
10 Examples of the Best Loyalty Programs for Restaurants
Starbucks operates one of the most successful restaurant loyalty programs. Their point-based system awards members with "stars" for each purchase, which can be redeemed for free drinks and food. Their digital-first approach, integrating the program with their mobile app, makes it easy for customers to order, pay, and collect points all in one place.
Domino's Piece of the Pie Rewards
This program is all about simplicity. Customers earn 10 points for every order of $10 or more, and after accruing 60 points, they receive a free medium two-topping pizza. Members can also participate in contests and win exclusive prizes.
Members of Chick-fil-A's program earn points with every purchase, which can be redeemed for free food. As customers spend more, they can progress through tiers from "Member" to "Silver Member" to "Red Member," each offering additional benefits and rewards.
Denny's offers a straightforward loyalty program with a special twist: members receive a free Grand Slam breakfast on their birthday. Members also receive 20% off their next visit after signing up and are the first to know about new menu items and promotions. Source
Panera Bread's MyPanera
MyPanera program members earn rewards on their purchases but also enjoy surprises. Unlike many programs where points can be exchanged for rewards, MyPanera often surprises customers with unexpected rewards, adding an element of delight to their dining experience.
Chipotle's loyalty program awards points based on the amount of money customers spend. Members can redeem these points for free food, and high-spending members can attain VIP status, unlocking extra benefits.
McDonald's McCafé Rewards
This program is centered around McDonald's McCafé menu. For every five McCafé items purchased, customers earn a free one. This program uses the McDonald's app, integrating with their mobile order and payment system.
Taco Bell's Taco Bell Rewards
Taco Bell’s loyalty program gives members points for each dollar spent, with bonus points available through challenges. The points can be used to claim a variety of rewards, ranging from food items to merchandise.
Dunkin's DD Perks
Dunkin's program gives members points for every purchase, which can be redeemed for free beverages. Additionally, members get a free drink when they join and on their birthday.
Subway's Subway MyWay Rewards
Subway's loyalty program offers tokens for every dollar spent. After accumulating 200 tokens, members earn a $2 reward that can be used on any menu item.
The Role of Loyalty Programs in the Restaurant Industry
Driving Repeat Business
The primary role of loyalty programs in the restaurant industry is to encourage repeat business. According to a study by Bain & Company, it costs six to seven times more to acquire a new customer than to retain an existing one. Furthermore, loyal customers tend to spend more. By rewarding patrons for repeat visits or purchases, loyalty programs can help restaurants boost their bottom line.
Enhancing Customer Engagement
Restaurant loyalty programs also play a vital role in enhancing customer engagement. With a loyalty program, customers feel recognized and valued. Such personalized attention enhances the customer experience, leading to positive reviews and word-of-mouth recommendations, which can significantly boost a restaurant's reputation and customer base.
Collecting Customer Data
Loyalty programs provide an excellent opportunity for restaurants to collect valuable customer data. By tracking the ordering habits of program members, restaurants can gain insights into customer preferences, helping them to tailor their menus and promotional efforts more effectively.
Building a Community
Loyalty programs can also help restaurants build a community. By offering special events, exclusive menu items, or other perks to loyalty program members, restaurants can foster a sense of belonging and build stronger relationships with their customers.
10 Reward Ideas for Restaurant Loyalty Programs
1. Points for Purchases
This is the most common reward mechanism, where customers earn points for every dollar spent. These points can then be redeemed for free or discounted food items.
2. Birthday Rewards
Offering a free meal, dessert, or discount to customers on their birthday can make them feel special and appreciated.
3. Tiered Rewards
In a tiered system, customers earn greater rewards the more they spend. This encourages increased spending and frequent visits.
4. VIP Events
Invite your loyal customers to special events, like new menu tastings, cooking classes, or wine pairings.
5. Punch Cards
For every X number of visits or specific purchases, customers earn a free item. This traditional, simple method still works effectively for many restaurants.
6. Surprise Rewards
Unexpected rewards can delight customers and create a positive emotional connection with your restaurant.
7. Rewards for Online Orders
Encourage online ordering by offering special rewards or discounts for orders placed through your website or app.
8. Social Media Engagement Rewards
Reward customers for social media engagement, like posting photos of their meal or checking in at your restaurant.
9. Referral Bonuses
Offer rewards to customers who refer friends to your restaurant or loyalty program.
10. Free Upgrades
Offer free upgrades to larger sizes or premium versions of items as a reward for loyal customers.
10 Steps to Setting up a Restaurant Loyalty Program
1. Set Clear Goals
Before launching a loyalty program, define what you want to achieve. Whether it's increasing the frequency of visits, raising the average ticket size, or enhancing customer engagement, having clear goals will guide your program's structure.
2. Understand Your Customers
Leverage data from your POS system, online orders, and customer feedback to understand what your customers value. Design your loyalty program rewards to align with these preferences.
3. Choose a Loyalty Program Type
Based on your goals and customer preferences, choose the type of loyalty program that suits your restaurant best, whether it's point-based, tiered, or a simple punch card system.
4. Leverage Technology
Use a digital platform or mobile app for your loyalty program to make it easy for customers to sign up, track their points, and redeem rewards. Integrating with your POS system will make tracking purchases and points seamless.
5. Design Attractive Rewards
The rewards should be enticing enough to motivate customers to participate. They could range from free menu items, discounts, special events, or even non-food related items like branded merchandise.
6. Promote Your Program
Ensure your customers are aware of your loyalty program through in-store signage, table tents, menu mentions, social media promotion, and staff encouragement.
7. Train Your Staff
Your staff should be well-versed in the loyalty program, able to explain its benefits to customers, and know how to sign up interested patrons.
8. Monitor and Adjust
Once your program is up and running, regularly review its performance. Adjust your rewards, marketing tactics, or program structure based on feedback and data.
9. Engage with Your Members
Keep communication with your members active. Regularly update them on their points status, new rewards, special events, or changes to the program.
10. Make It Easy and Enjoyable
A successful loyalty program is easy to join, easy to use, and enjoyable. Make sure the sign-up process is simple, rewards are easy to earn and redeem, and participation brings joy to your customers.
Restaurant loyalty programs can be a powerful tool in a competitive industry. When thoughtfully designed and implemented, they not only encourage repeat visits but also enhance customer engagement, generate valuable data, and foster a sense of community among patrons. By understanding your customers, setting clear goals, and regularly reviewing your program, you can build a loyalty program that benefits both your customers and your restaurant.