4min
Loyalty programs, digital or physical loyalty cards… What are the best ways to make the diners of your restaurant more loyal?
When you walk into your favorite local restaurant, 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 and 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.
Guest loyalty should be as simple as that for restaurants: a strong relationship between a restaurant and its patrons, personalized 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 diners.
So how do you make them loyal? You’ve heard of loyalty programs, but which one is right for you? And is there anything else you can do to keep your best clients coming back?
Before we get to the heart of the matter, let’s talk business: should you really care about (and spend money on) guest loyalty? From an financial standpoint, the question has long been settled.
Guest 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 diners than to keep existing ones.
The retention rate of a business (the rate of existing diners that will still be diners 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, guest loyalty is doubtlessly important for your restaurant.
If you’re worried about your retention rate, you might be eager to put a loyalty program in place ASAP.
But before you get to that, you need to make sure your diners are happy with their experience in your restaurant. Even the most enticing loyalty program in the world won’t bring back unhappy clients!
Guest 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 diners.
Forrester has even proven that a marginal improvement of guest 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 guest satisfaction regularly and ask them directly if they enjoy your services. We tell you everything you need to know about it right here.
Once you’ve made sure the experience your clients are getting is up to their expectations, you can start building your loyalty program. The point of a loyalty program is to reward them, thus incentivizing repeat purchases.
Discounts, free meals, reward points, gifts, merch… You name it. These rewards can depend on the amount diners pay or be offered to them on a membership basis.
You have a lot of choice when it comes to the scheme of your loyalty program. 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 guests a certain number of points for every dollar they spend in your restaurants (but you need to be able to track each member’s expenses).
You can also grant diners special offers just because they’ve signed up to the loyalty program (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 program carefully: make it too easy to get a reward and you’ll end up losing money.
You most likely have one or two of them in your wallet. These cards have long been seen as the universal support of loyalty programs.
But times are changing: research shows that 79% of Americans are more likely to sign up to a reward program that doesn’t require them to carry a card.
But they’re still one of the easiest solutions to get a loyalty program up and running fast: we’re talking specifically about these printed punch cards that you can stamp every time a diner 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 personalized reward scheme in place, but they’re expensive: you’ll need to invest in these cards and buy a dedicated card reader.
Here at sunday, we firmly believe that in the coming years, the restaurant industry will be fully digitized. 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 diners to a landing page where they can sign up for a loyalty program (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, guests 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 program allows you to collect more information about your diners.
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 recognize us and give us a special treatment. Guest loyalty is about much more than financial rewards.
A loyalty program should allow you to learn more about your diners so you can serve them better and adapt to their preferences:
To build guest loyalty, rewards are not enough. Guest experience and guest knowledge are important, too.
Digitizing your restaurant will allow you to improve these three aspects and to treat your diners in a more personalized way, to adapt to their preferences and to make their lives simpler!
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