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Reward Your Loyal Customers With Love And Points
Prasad Vemulapalli | August 05, 2022

Who doesn’t like rewards? Retail loyalty programs are commonly used as a marketing strategy across industries, encouraging customers to give more business to their company. The hospitality industry has been popularizing the culture of rewarding its customers for making them loyal.

The restaurant business runs not just on the quality of food and aesthetics but is equally dependent on their grade of services. The pandemic has been harsh on the hotel and restaurant business, with many eateries and fine dining restaurants shutting down. The recurring lockdowns and people not considering it safe to dine out worsened the situation for several restaurants.

Some fortunate restaurant businesses made it through the darkest phases of COVID and didn’t have to close down. One strategy that many entrepreneurs adopted to attract their old customers was a restaurant loyalty program.

What is a Restaurant Loyalty Program?

The customer loyalty programs allow customers to enjoy a range of rewards against the business they give to the restaurant. Common loyalty rewards include discounts on meals either direct or through accumulated loyalty points from past spending, free items from the menu, or sometimes restaurants can let them access exclusive events. They might also offer additional services themselves or provide outsourced services from a network partner.  

As a customer, you can keep track of loyalty points awarded by your choicest dining establishment and use them when you think it’s wise to redeem them. In this bid, it becomes essential for the restaurant to ensure sustained quality and service to its customers, as customer loyalty will likely fall when the restaurant cannot meet their expectations. 

Benefits of Loyalty Programs for Restaurants

From the restaurant’s perspective, a loyalty program can make one of the best means of incentivizing customers to give them repeat business. The restaurant business depends on consumer behavior and economic fluctuations, and their behavior can be affected with the help of loyalty programs. Your restaurants depend on customer loyalty for survival, and you  need to structure loyalty programs wisely.  

As a restaurant, when you reward your customers, you not just incentivize them to come back to your restaurant but also increase your average order value in the process. If you are looking for reasons to introduce a loyalty program for your customers, we can help you know why you should do it as soon as possible. 

1. Boosts your Business

A restaurant loyalty program plays a vital role in retaining customers. When you reward your customers for spending at your restaurant, especially with the various level loyalty rewards system, it makes them look at it as leveling up in a game. Focusing on retaining your existing customers can pay off better as compared to acquiring new ones. It may cost restaurants 5x to 25x to reach new customers rather than drive repeat business. 

2. Increased Order Size 

Famous eateries offer combo meals instead of just à la carte options. Well, that’s because it enables the eating joints to make more sales on beverages and side dishes. Moreover, these combos are given bonus points to pique their interest in trying them out. Sometimes, customers purchase more than they originally planned to earn more points. 

Types of Loyalty Programs 

Customer loyalty programs come in different forms. The common types of loyalty rewards are as follows:

Rewards Based on Points

The customer earns a certain number of points for every penny spent at your restaurant. The customer can then redeem these for food or as a credit used at the restaurant. Some restaurants might also charge a point redemption fee. Keeping the point system straightforward can help customers understand it better. When customers know what to expect with the loyalty reward points, there’s a high chance they will come back for more.  

Rewards on Items

If the restaurant rewards its customers with a product or a service based on their purchase of an item a certain number of times, it can be referred to as an item-based reward.

Subscription Rewards 

This rewards program allows regular item subscribers to receive loyalty rewards for reaching a particular membership milestone. In this system, customers are entitled to loyalty rewards for giving repeat subscription orders.

Many popular restaurants during the pandemic launched subscription-based programs to boost sales. As a restaurant, you can consider making subscription-based rewards exclusive to the loyal customers as that will offer them privileges. You can reward your loyal customers with exquisite experiences such as setting up an in-person cooking class with your special chef or offering similar benefits that your customers will find hard to resist. 

Promotional Rewards

You can devise promotions if you want to look beyond creating a reward tied to your customers' specific spending habits and behavior, you can devise promotions. Such bonuses allow restaurants to explore their creative side to strategize offers for loyal customers. 

For instance, you can give away a free dessert during customers’ birthday or anniversary month so that they can celebrate their special occasion at your restaurant. The buy-one-get-one deals, a happy hour promo, an online promo, or any other such innovative promos can design a unique promotional program for your business. 

You can also give away rewards online, where your customers can enjoy the privilege of earning points and rewards for both online orders and in-venue meals. It can be done by giving customers a coupon code that can be used, say, on their first online order. Alternatively, you can make some of these coupons redeemable on online orders. 

Tips on How to Get the Best of your Loyalty Programs 

Restaurants new to the business can check out the best free loyalty software to design a program suited to their needs and target customers. Here are a few tips to help you make the most of your loyalty programs. Aside from managing and analyzing customer data, saving daily operations time, and tracking a frequent buyer, it can enable your restaurant to deliver an enhanced customer experience.

Reward more Often

More rewards can make happier customers. Market reviews show that more than 75% of customers will continue spending at a restaurant that offers a loyalty program. Also, brands that provide programs with customizable benefits are likely to be recommended by customers. If you reward your customers with discounts through accumulating points or redeeming a voucher, your customers will likely popularize your brand. Such user award programs are used to increase your business's returns.

Keep the loyalty program simple 

Loyalty programs with a simple structure make adopting the scheme easier and vouch for a better customer experience. It can engage your customers better. For instance, you can have an option where your customers can choose from a menu themselves than just having to take away what has been pre-selected by the restaurant. You can also add menu items that have a better appeal to higher loyalties. Market research indicates that customers with gift cards spend as much as 25% higher than the amount in their gift certificates. 

Prioritize a Personalized Experience 

Just as it is important to keep to the loyalty program best practices for goodwill, you can go a step ahead by offering discounts or free meals to extend a personalized experience to your customers. 

For convenience and ease of interaction with restaurants, you can build a responsive platform accessible to customers on the go. It will help them grab promotional offers via mobile coupons or rewards that can be used later. You might also consider buying good POS software for automatic ordering, customized meals, and tracking customer loyalty. Consider establishing a digital and mobile niche for engaging your customers in your viable restaurant loyalty program. 

Positive customer experience is premised on a well-designed and appropriately executed loyalty program. So, if you put your customers first and take care of their expectations, you can ensure a high return rate. 

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