Everything you need to know about loyalty programmes for restaurants
- February 2022
- Last Update 17 August 2023
How to build customer loyalty at your restaurant
When you walk into your favourite local pub, you don’t need a loyalty card.
The owner knows you well, she greets you and calls you by your name. You head towards your regular table and she asks: “The usual?”.
A few minutes later, she brings you your usual order: she always gets it right. When you ask to pay the bill, you’re met with a delightful surprise: coffee’s on the house, since you’re a regular! As you walk out, you promise yourself to be back soon.
Customer loyalty should be as simple as that for restaurants: a strong relationship between a restaurant and its patrons, personalised services, and rewards for regulars.
But here’s the thing: when you manage a large establishment that accommodates dozens of tables every night, or even worse, when you manage a franchise of restaurants, it’s hard to build these kinds of relationships with your customers.
So how do you make them loyal? You’ve heard of loyalty programmes, but which one is right for you? And is there anything else you can do to keep your best clients coming back?
Is Customer Loyalty Still Important in 2022?
Before we get to the heart of the matter, let’s talk business: should you really care about (and spend money on) customer loyalty? From a financial standpoint, the question has long been settled.
Customer loyalty is a big predictor of a company’s failure or success: research shows it can be 5 to 25 times more expensive to make new customers than to keep existing ones. The retention rate of a business (the rate of existing customers that will still be customers after a given amount of time) is tied to its profits.
The consultancy firm Bain&Company shows that increasing your retention rate by 5% could increase profits by 25% to 95%.
In short, customer loyalty is doubtlessly important for your restaurant.
Understanding the Basics of Customer Experience
If you’re worried about your retention rate, you might be eager to put a loyalty programme in place ASAP.
But before you get to that, you need to make sure your customers are happy with their experience in your restaurant. Even the most enticing loyalty programme in the world won’t bring back unhappy clients!
Customer experience has a major influence on retention rates. This is why most companies (even those that manufacture and sell products) are now paying so much attention to the experience of their customers.
Forrester has even proven that a marginal improvement of customer experience can boost revenues. This is particularly true for the hospitality and catering industries, where your visitors pay for the experience.
You should measure your client satisfaction regularly and ask them directly if they enjoy your services. We tell you everything you need to know about it right here.
Designing Your Loyalty Program
Once you’ve made sure the experience your customers are getting is up to their expectations, you can start building your loyalty programme.
The point of a loyalty programme is to reward them, thus incentivising repeat purchases. Discounts, free meals, reward points, gifts, merch… You name it.
These rewards can depend on the amount customers pay or be offered to them on a membership basis.
What Structure to Choose for Your Loyalty Programme
You have a lot of choice when it comes to the scheme of your loyalty programme. It is usual for restaurants and coffee shops to offer a free snack, drink or meal after a certain number of purchases.
This reward system is simple to put in place, especially if all the items on your menu cost more or less the same (if you run a salad bar for instance).
A slightly more complex way to do it is to grant customers a certain number of points for every pound they spend in your restaurants (but you need to be able to track each member’s expenses).
You can also grant customers special offers just because they’ve signed up to the loyalty programme (but you need to be able to communicate these special offers to them – by asking for their email address or their phone number for instance).
No matter the structure you choose, you need to calibrate the programme carefully: make it too easy to get a reward and you’ll end up losing money.
Loyalty Cards
You most likely have one or two of them in your wallet: 91% of Brits have at least one loyalty card. These cards have long been seen as the universal support of loyalty programmes.
But times are changing: research shows that 49% of Brits are most likely to participate in a loyalty scheme if it is cardless.
But they’re still one of the easiest solutions to get a loyalty programme up and running fast: we’re talking specifically about these printed punch cards that you can stamp every time a customer makes a purchase. After a certain number of purchases, they get their rewards.
Some loyalty cards are electronic and work with a chip. They’ll allow you to collect data about your clients and keep track of their visits (date, amount spent, etc.).
They can allow you to put a more personalised reward scheme in place, but they’re expensive: you’ll need to invest in these cards and purchase a dedicated card reader.
Why We Believe in Digital Loyalty Cards
Here at sunday, we firmly believe that in the coming years, the restaurant industry will be fully digitised. We also believe that QR codes are the right way for restaurants to link their physical and digital ecosystems together.
This is why we’ve built a restaurant payment system that works with QR codes. But QR codes can do much more for restaurants: it’s a way for them to redirect their customers to a landing page where they can sign up for a loyalty programme (especially if they have the right incentive: a discount applicable immediately, for instance).
It seems obvious to us that the loyalty cards of the future will be digital. For one thing, customers won’t have to carry numerous cards in their wallet (and to unavoidably forget some of them at home).
But there’s an even more important reason: choosing a digital-first loyalty programme allows you to collect more information about your customers.
Get to Know Your Customers
So why does each and every one of us keep coming back to that same local restaurant? Part of the answer is that we know the staff will recognise us and give us a special treatment. Customer loyalty is about much more than financial rewards.
A loyalty programme should allow you to learn more about your clients so you can serve them better and adapt to their preferences:
- You can ask your visitors to give their email address or phone number when they sign up for a loyalty programme. If they give you their consent, you’ll be able to reach out to them and tell them about your special offers, the discounts they get, or new additions to the menu.
- You can ask them their birthday and offer them a special treat for this special day.
- But above all, your digital ecosystem will remember them: they’ll be able to pay digitally without entering their credit card information every single time.
To build customer loyalty, rewards are not enough. Customer experience and customer knowledge are important, too.
Digitising your restaurant will allow you to improve these three aspects and to treat your customers in a more personalised way, to adapt to their preferences and to make their lives simpler!
