Tips for Building Customer Loyalty in the Restaurant Industry

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Geoff Smith, CMO of CrowdTwist, provides an overview of the benefits of multi-channel loyalty programs.

By Geoff Smith

According to2015 Loyalty Census of the Colloquium, 54.8 million Americans are enrolled in a restaurant loyalty program. Customers want to be rewarded for spending time and money with their favorite brands, and companies are stepping up to offer rewards that keep customers coming back. Restaurants are leading the way in this market space by developing innovative loyalty programs.

Since 2012, the industry has seen a 107% increase in loyal members. The prevalence of smartphones—held by 88% of millennials (aged 18-34)— encouraged restaurant marketers to trade in outdated punch cards for a loyalty program that appeals to this generation.

The integration of technology enables restaurateurs to capture consumer data and send more relevant offers that entice customers to increase meal frequency, share their experiences, and ultimately spend more. Restaurant brands that adopt multi-channel loyalty and engagement strategies can change the way customers interact with their businesses and improve their bottom line.

A multi-channel loyalty and engagement strategy aims to put brands at the forefront of customer concerns. These programs rely on technologies such as smartphones, social media and proximity sensing capabilities to engage people where they shop, eat and live.

When implemented wisely, a multi-channel loyalty and engagement program helps better identify customer behaviors, habits, likes and dislikes, while providing a portal to brand experiences. Once collected, the data helps segment customer profiles, helping brands engage customers with what they want, when they want it.

Starbucks’ loyalty program is a great example of how food and beverage companies are leveraging cross-channel loyalty to create brand experiences. Starbucks Rewards gives customers the ability to access their account information, offers a smartphone app for placing orders, and stores payment information in a mobile wallet.

As restaurant marketers attempt to create platforms that are easy to use, there are significant opportunities to consider.

Fast food and casual dining options

Today, a number of QSRs have some form of loyalty program in place, but most overlook opportunities to interact with customers outside of POS transactions. Customers need to be able to earn points or other rewards for interacting with the brand beyond their physical location. Brands looking to engage and reward customers on their phones, computers, and social media have an advantage when it comes to grabbing customer attention.

For QSRs looking to enter the mobile app space, many opportunities exist to create fan engagement and drive traffic to their stores.Rita’s ice cream, for example, uses an app to not only help customers track their engagement, but also to encourage them to “share their happiness” with the brand on social media sites like Facebook, Instagram and Twitter. These sites are all integrated with the Rita’s Ice app and allow customers to earn loyalty points that can be redeemed at Rita’s Ice stores.

However, a dedicated mobile app is not the only option for multi-channel loyalty marketing. Buffalo Wild Wings rewards customers with points for checking in to its restaurants and updating profiles. These tactics help drive restaurant visits while providing the brand with additional consumer data.

All restaurants should consider the following retention strategies:

  • Make emotional connections: Customers are more likely to interact consistently with brands they feel a common emotional connection with. Chick-fil-A capitalizes on this connection by capitalizing on its iconic mascot – cows – by encouraging fans to enjoy Chick-fil-A food and “save the cows”. Separately, the brand rewards customers who dress up in cow-like costumes with free entries to its annual Cow Appreciation Day.

  • Offer value: Brands need to go beyond discounts and consider offering experiences to their customers. Daddy Johns allows members to earn points for a free pizza when they place orders online. To provide greater value, the brand also includes taxes and delivery costs as part of the gift.

  • Be social: Customers appreciate being rewarded for their interactions with the brand on social media. from Brooklyn -321° Glacier offers free ice cream to its customers who share photos of the store on Instagram once the photo exceeds 100 likes.

  • Engage patrons: Sometimes customers just want to have fun with a brand. As part of its digital loyalty program, Chilli’s uses Ziosk tablets, allowing customers to participate in its loyalty program while they dine. Beyond food purchases, members can earn points by participating in “challenges,” such as trying the latest menu item or referring friends to the program.

Today’s consumers expect brands to speak to them with specificity, exclusivity and enthusiasm. To meet these expectations, foodservice brands need to think about their customers and how they interact in today’s world. They must develop brand experiences that interface with customer needs everywhere and on the channels that matter most to them.

Only when brands respond to and participate in the lives of their customers across all channels can they take advantage of the myriad of data and engagement opportunities that now exist. Restaurant businesses that accomplish this will have the power to control their brands’ narrative and build a stronger rapport with their customers and build loyalty.

Geoff Smith is CMO of CrowdTwist.

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