Loyalty programs have become critical tools helping restaurants compete. Yet in an environment where these programs have become so commonplace, operators must assess them with a critical eye and adapt them to make sure they are delivering in ways that resonate with guests. You can gather clues about what might help by checking out the most successful restaurant apps – recent research found that mega brands including Starbucks, McDonald’s, Dunkin’, Subway and Chick-fil-A are among the most downloaded restaurant apps right now. But since loyalty programs aren’t one-size-fits-all, you will get better traction by developing a program customized with rewards that suit your specific guest preferences. Consider – or test with your guests – how you want to deliver rewards and what kind of experience your guests are seeking. For example, your best guests might prefer to accumulate points, or climb progressively higher tiers that make them eligible for new rewards (this can help build engagement), or earn rewards based on the number of times they visit, or simply pay a subscription that unlocks rewards (this can give your program an air of exclusivity). Regardless, it’s important to apply some rules of the road to whatever rewards you offer. Orderable advises restaurant brands maintain consistency across in-house and online channels, make sure the rewards you are offering are items that your guests actually want (you can test this with guests and adapt your program to make it more dynamic), offer a variety of rewards to suit different tastes, and make your program understandable and the rewards attainable. Nothing tarnishes a guest’s opinion about a loyalty program like working toward a reward and then being denied because they didn’t read the fine print.
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If you’re like most businesses, about 60 percent of your revenue comes from only 20 percent of your guests. Instead of directing your marketing time and effort toward the 80 percent of people who are less likely to support you, you stand to gain far more if you can channel your resources into that valuable 20 percent who buy from you frequently and spend more when they do. Understanding customer lifetime value (CLV) can help you zero in on this critical segment of your audience. (You can calculate it by dividing the average per-guest spending each month by the percentage of guests that don’t return.) If you have the tools to understand your CLV, you know which offers and channels have driven the most sales. You are able to take the behaviors of your best guests and turn them into incentives that drive repeat business. You can use that information to attract similar guests who have the potential to become more loyal. You also understand what promotions and messages generate the best sales. Improving your CLV can help you expand the size of your most valuable segment of guests. So how can you do this? Track how much money a guest is likely to spend on repeat visits and other interactions with your business, or how likely they are to refer your business to others. Look for opportunities to collect actionable information from each step of a guest’s journey. Toast suggests making it as convenient as possible for guests to buy from you and share information. That includes their feedback, which you can use to assess your performance and identify action items. Lean on your loyalty program to encourage return visits and to communicate in targeted ways with your guests. Finally, bundle your offerings – it increases guests’ perception of your value. |
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