There’s no question: Loyalty programs are the new rage in the restaurant business. Research shows that 65% of Americans are part of at least one restaurant rewards program, while nearly 26% are members of four or more programs. If you’re looking to increase your revenue, a loyalty program is a way to do it.

The facts are simple. According to this YouTube video, it costs 5x more to acquire new customers than to keep old ones. And even with new customers, loyalty matters. 68% of customers say they are “somewhat” or “very likely” to dine at restaurants that offer loyalty programs over those that don’t. Of those customers, about 36% are in the 26-35 age group.

But what if you don’t know the first thing about loyalty programs? Reams of research have been done about how to create an effective and workable loyalty program, and at this point, many people have it down to a science. If you’re curious, read on for a great report about the nuts and bolts of putting together a first-rate loyalty program.

Table of Contents

What Is A Loyalty Program?

Loyalty programs are fantastic ways to achieve high levels of success as a business owner. With a loyalty program, a customer signs up for the program during purchase and collects loyalty “points” based on the number of purchases they make. They might also give identifying information like the date of birth for future benefits.

These programs reward frequent customers by offering a wide range of perks based on the number of “points” accumulated. They might also give rewards for monthly milestones, birthdays and other purposes. Finally, they often extend special opportunities to customers like new product tastings, contests, and special events.

How Does A Loyalty Program Benefit Business Owners?

Restaurant loyalty programs are one of the best methods for building and strengthening your restaurant business. The benefits to you as a business owner are many. Some of the major ones include:

Create Return Customers And Improve Sales

With a loyalty program, you can induce customers to return to your restaurant again and again. Whether you choose a points program to reward frequent purchases, a birthday gift program, a promotional sale or event, or new product tastings, you give your customers an incentive to visit frequently. This creates brand ambassadors who improve your sales revenue and help you promote your business to others.

Building Brand Awareness

As described above, by setting up a loyalty program, you create a base of devoted customers who engage constantly with your brand. This builds brand awareness in their minds, which can then lead them to act as brand ambassadors in their communities. You also may choose to invest in different marketing and promotional efforts as part of your loyalty program, which builds brand awareness in the minds of the public.

Improve Sales

Though creating return customers and brand ambassadors, you attract new business from both new and existing customers. The promotional efforts that you engage in as a result of your loyalty program also add to your revenue.

Target Your Marketing Efforts

Many of the POS software programs that loyalty programs use allow you to collect a wide range of info that can help you target your marketing efforts. Capturing data such as frequency of visits, favorite menu items, average spend can allow you to create special offers that may improve business. You can also collect more general data such as busiest times of day, top-selling items, and so on.

Build Brand Loyalty

The more you target your marketing and promotional approaches to appeal to the unique tastes and preferences of customers, the more likely it is that they will come into your restaurant more frequently and spend bigger sums of money while there. In addition to increasing your sales, this will build brand loyalty, increase brand awareness and cement your brand’s reputation in the minds of consumers.

Improve Menu

As part of your loyalty program, you can throw events at which you can introduce new menu items or hold tastings of old ones. By distributing surveys or keeping track of which items are well-received and which aren’t, you can make improvements to your menu which may boost sales.

Increase Per-Purchase Spend

By offering special deals, you can increase the amount of money that customers spend per purchase and grow your revenue levels.

How Does A Loyalty Program Benefit Customers?

Business owners aren’t the only ones who benefit from a loyalty program. Your customers will enjoy a wide range of rewards that will fill their wallets and make their lives easier. These rewards include:

Getting Free Stuff

Depending on the kind of loyalty program you design, you can offer your customers a wide variety of free items, special gifts, and free events. Promotions like BOGO (Buy One, Get One Free) and points programs can motivate your customers to visit more often, spend more on each visit, and tell their friends and family about how much they love your brand.

Saving Money On Purchases

In addition to offering free items, you can improve marketing efforts further by designing programs that allow your customers to save money on the purchases they make. BOGO 50% Off programs, special promotional sales, and coupons can encourage customers to come in more often or to try new items that they may not have noticed on the menu before.

Learning More About Your Menu

By holding promotional events like tastings and free product promos, you can introduce customers to items that they may not have considered before. This can help you refine your menu, identifying which items should be on the menu, which should be promoted, which should be removed, and which new items will be top sellers.

Sharing New Finds With Friends

When you introduce new items or hold special promotional sales or events, your customers can share their passion for your brand with friends and family. As a result, new social traditions are born and new memories created.

What Kinds of Rewards Can You Offer Customers?

Once you’ve decided that you want to start offering a loyalty program at your restaurant, you might be wondering what kinds of rewards will bring you the best results. Luckily, there’s a wide variety of restaurant loyalty program ideas that you can implement into your program. Based on what is most practical, effective, and affordable for you, you can select as many or as few as you like.

Some of the best rewards options include:

Sign-Up Incentives

With this option, you offer customers a reward for signing up to join your loyalty program, usually at the point of purchase. You can offer a range of rewards, including a same-day discount on their purchase or a free item. This type of reward is usually very appealing to customers and can result in increased loyalty program enrollment.

Points Programs

Implementing a points program is one of the best ways to encourage customers to visit more frequently, try new items and enjoy more of your menu. With a points program, customers sign up by submitting their email address, phone number, or credit card information, and then begin collecting “points” for each purchase they make. These points accumulate until they reach a critical mass, at which point they can be traded in for rewards.

Business owners can choose to tie the number of points received for each purchase to the size of the purchase or offer a fixed number of points for purchases of any size. They can also choose to link the number of points to the frequency of visits made by the customer or the types of items purchased. As a special promotion, they can implement a “Double Points Day” during which the number of points normally assigned to a given purchase is doubled.

Points programs are highly customizable and can offer a wide range of rewards for participation. Such rewards can include:

  • A discount
  • Free item
  • Add-ons to your order such as dessert, sides or drinks
  • Restaurant merchandise such as t-shirts, hats or mugs

Promotions

You may choose to run a variety of promotions as part of your points program. These can be members-only promotions or promotions available to your entire customer base. For members-only promotions, you may choose to send out texts, e-mails, flyers, or other promotional tools to aid your marketing efforts.

One very popular promotion is the BOGO promotion, or Buy One Get One. With this promotion, a customer gets access to a second item off the menu when they buy a first item of the same kind. You can choose to offer the second item at a discount (a popular one is 50%) or offer the classic Buy One Get One free. You can also offer a second item of lesser value when a customer purchases a given promotional item.

Another popular promotion is the daily special. With this promotion, you offer a featured menu items at a deeply discounted price to spur interest in the item among your loyalty program members. This item can be a new menu item or a best-seller, or one for which you’re trying to increase sales. When running a daily special promotion, make sure that your entire house staff is trained in how to present the daily special to customers and ring up the discounted item.

Free Gifts

Offering free gifts or items to your loyalty program members is a great way to increase product awareness, attract publicity and bring your members into the restaurant more often. You can offer try-it-first promos of brand-new menu items, provide free samples of best-sellers, or give away house merchandise.

You can also offer free gifts or items for special events like birthdays, business anniversaries, or holidays. This helps build loyalty, increase awareness of your menu, and bring customers into your restaurant at a time when they’re likely to spend much more. When doing this, you can send emails, texts, flyers, or other messages a couple of days before.

Coupons

Some restaurant owners have had success with sending customized coupons or gift certificates to loyalty program members. These coupons can offer a discount on menu items or make them entirely free. You can use them to promote new products, push best-sellers or low-yield items, or simply offer a favorite item of their choice at a reduced price.

Referral Rewards

One of the best ways to grow a loyalty program is to offer rewards to participating members for referring family and friends. These rewards can consist of any of the options described in this section and can be bestowed by software programs that track forwarded emails and text messages, record new customer referral information and send out coupons and certificates to be redeemed in-store.

Members-Only Events

If you have an available space in your restaurant, you can hold members-only events to promote your menu and build brand loyalty in your loyalty club members. Such events can be held on off-nights or after hours and can consist of free or deeply-discounted food, pastimes like movies or bingo, or happy hours. Promote your events via email, text or flyer and offer things like a raffle to build interest.

Contests

Finally, you can run contests or sweepstakes to build brand awareness and loyalty and get more customers into your restaurant. Such events can be run relatively simple or can involve considerable time and effort, but may pay off in terms of brand engagement and increased publicity.

Loyalty programs are fantastic ways to achieve high levels of success as a business owner. With a loyalty program, a customer signs up for the program during purchase and collects loyalty “points” based on the number of purchases they make. They might also give identifying information like the date of birth for future benefits. 

These programs reward frequent customers by offering a wide range of perks based on the number of “points” accumulated. They might also give rewards for monthly milestones, birthdays and other purposes. Finally, they often extend special opportunities to customers like new product tastings, contests, and special events.

 

How Does A Loyalty Program Benefit Business Owners?

Restaurant loyalty programs are one of the best methods for building and strengthening your restaurant business. The benefits to you as a business owner are many. Some of the major ones include:

 

Create Return Customers And Improve Sales 

With a loyalty program, you can induce customers to return to your restaurant again and again. Whether you choose a points program to reward frequent purchases, a birthday gift program, a promotional sale or event, or new product tastings, you give your customers an incentive to visit frequently. This creates brand ambassadors who improve your sales revenue and help you promote your business to others.

 

Building Brand Awareness 

As described above, by setting up a loyalty program, you create a base of devoted customers who engage constantly with your brand. This builds brand awareness in their minds, which can then lead them to act as brand ambassadors in their communities. You also may choose to invest in different marketing and promotional efforts as part of your loyalty program, which builds brand awareness in the minds of the public.

 

Improve Sales 

Though creating return customers and brand ambassadors, you attract new business from both new and existing customers. The promotional efforts that you engage in as a result of your loyalty program also add to your revenue.

 

Target Your Marketing Efforts 

Many of the POS software programs that loyalty programs use allow you to collect a wide range of info that can help you target your marketing efforts. Capturing data such as frequency of visits, favorite menu items, average spend can allow you to create special offers that may improve business. You can also collect more general data such as busiest times of day, top-selling items, and so on.

 

Build Brand Loyalty 

The more you target your marketing and promotional approaches to appeal to the unique tastes and preferences of customers, the more likely it is that they will come into your restaurant more frequently and spend bigger sums of money while there. In addition to increasing your sales, this will build brand loyalty, increase brand awareness and cement your brand’s reputation in the minds of consumers.

 

Improve Menu 

As part of your loyalty program, you can throw events at which you can introduce new menu items or hold tastings of old ones. By distributing surveys or keeping track of which items are well-received and which aren’t, you can make improvements to your menu which may boost sales.

 

Increase Per-Purchase Spend 

By offering special deals, you can increase the amount of money that customers spend per purchase and grow your revenue levels.

How Does A Loyalty Program Benefit Customers?

Business owners aren’t the only ones who benefit from a loyalty program. Your customers will enjoy a wide range of rewards that will fill their wallets and make their lives easier. These rewards include:

 

Getting Free Stuff 

Depending on the kind of loyalty program you design, you can offer your customers a wide variety of free items, special gifts, and free events. Promotions like BOGO (Buy One, Get One Free) and points programs can motivate your customers to visit more often, spend more on each visit, and tell their friends and family about how much they love your brand.

 

Saving Money On Purchases 

In addition to offering free items, you can improve marketing efforts further by designing programs that allow your customers to save money on the purchases they make. BOGO 50% Off programs, special promotional sales, and coupons can encourage customers to come in more often or to try new items that they may not have noticed on the menu before.

 

Learning More About Your Menu 

By holding promotional events like tastings and free product promos, you can introduce customers to items that they may not have considered before. This can help you refine your menu, identifying which items should be on the menu, which should be promoted, which should be removed, and which new items will be top sellers.

 

Sharing New Finds With Friends 

When you introduce new items or hold special promotional sales or events, your customers can share their passion for your brand with friends and family. As a result, new social traditions are born and new memories created.

What Kinds of Rewards Can You Offer Customers?

Once you’ve decided that you want to start offering a loyalty program at your restaurant, you might be wondering what kinds of rewards will bring you the best results. Luckily, there’s a wide variety of restaurant loyalty program ideas that you can implement into your program. Based on what is most practical, effective, and affordable for you, you can select as many or as few as you like. 

Some of the best rewards options include:

 

Sign-Up Incentives 

With this option, you offer customers a reward for signing up to join your loyalty program, usually at the point of purchase. You can offer a range of rewards, including a same-day discount on their purchase or a free item. This type of reward is usually very appealing to customers and can result in increased loyalty program enrollment.

 

Points Programs 

Implementing a points program is one of the best ways to encourage customers to visit more frequently, try new items and enjoy more of your menu. With a points program, customers sign up by submitting their email address, phone number, or credit card information, and then begin collecting “points” for each purchase they make. These points accumulate until they reach a critical mass, at which point they can be traded in for rewards. 

Business owners can choose to tie the number of points received for each purchase to the size of the purchase or offer a fixed number of points for purchases of any size. They can also choose to link the number of points to the frequency of visits made by the customer or the types of items purchased. As a special promotion, they can implement a “Double Points Day” during which the number of points normally assigned to a given purchase is doubled. 

Points programs are highly customizable and can offer a wide range of rewards for participation. Such rewards can include: 

  • A discount
  • Free item
  • Add-ons to your order such as dessert, sides or drinks
  • Restaurant merchandise such as t-shirts, hats or mugs 

Promotions 

You may choose to run a variety of promotions as part of your points program. These can be members-only promotions or promotions available to your entire customer base. For members-only promotions, you may choose to send out texts, e-mails, flyers, or other promotional tools to aid your marketing efforts. 

One very popular promotion is the BOGO promotion, or Buy One Get One. With this promotion, a customer gets access to a second item off the menu when they buy a first item of the same kind. You can choose to offer the second item at a discount (a popular one is 50%) or offer the classic Buy One Get One free. You can also offer a second item of lesser value when a customer purchases a given promotional item. 

Another popular promotion is the daily special. With this promotion, you offer a featured menu items at a deeply discounted price to spur interest in the item among your loyalty program members. This item can be a new menu item or a best-seller, or one for which you’re trying to increase sales. When running a daily special promotion, make sure that your entire house staff is trained in how to present the daily special to customers and ring up the discounted item.

 

Free Gifts 

Offering free gifts or items to your loyalty program members is a great way to increase product awareness, attract publicity and bring your members into the restaurant more often. You can offer try-it-first promos of brand-new menu items, provide free samples of best-sellers, or give away house merchandise. 

You can also offer free gifts or items for special events like birthdays, business anniversaries, or holidays. This helps build loyalty, increase awareness of your menu, and bring customers into your restaurant at a time when they’re likely to spend much more. When doing this, you can send emails, texts, flyers, or other messages a couple of days before.

 

Coupons 

Some restaurant owners have had success with sending customized coupons or gift certificates to loyalty program members. These coupons can offer a discount on menu items or make them entirely free. You can use them to promote new products, push best-sellers or low-yield items, or simply offer a favorite item of their choice at a reduced price.

 

Referral Rewards 

One of the best ways to grow a loyalty program is to offer rewards to participating members for referring family and friends. These rewards can consist of any of the options described in this section and can be bestowed by software programs that track forwarded emails and text messages, record new customer referral information and send out coupons and certificates to be redeemed in-store.

 

Members-Only Events 

If you have an available space in your restaurant, you can hold members-only events to promote your menu and build brand loyalty in your loyalty club members. Such events can be held on off-nights or after hours and can consist of free or deeply-discounted food, pastimes like movies or bingo, or happy hours. Promote your events via email, text or flyer and offer things like a raffle to build interest.

 

Contests 

Finally, you can run contests or sweepstakes to build brand awareness and loyalty and get more customers into your restaurant. Such events can be run relatively simple or can involve considerable time and effort, but may pay off in terms of brand engagement and increased publicity.

LET'S GET STARTED

Find out more about how Shiftpixy can empower your business growth.

What Is The Best Platform For Customers To Access My Loyalty Program From?

As a business owner, you have a wide variety of options when it comes to how you want to platform your loyalty program. Each platform has its own perks and drawbacks and offers different benefits to your business. Some of the most popular platforms for loyalty programs include:

Debit or Credit Card Numbers

One of the easiest platforms for loyalty programs is a simple PoS (point-of-sale) software program that collects a customer’s debit or credit card number and places it in a database. This type of platform is usually accessed when a customer makes a purchase. The cashier will ask the customer if they want to become a member of the loyalty program, and when the customer says “yes”, the cashier will press a special button on her screen and the card information will be collected.

The advantage of this kind of platform is that loyalty members don’t have to carry around special slips of paper or give highly personal information to your business. They will simply collect points or rewards every time they use their debit or credit card. The software will keep track of the points or rewards earned and make the appropriate adjustments to the bill automatically. This is convenient for both customers and employees.

Personal Information

You can also build your loyalty program database by collecting personal information like customer email addresses or phone numbers at the PoS. The software will record the information, and all the customers will have to do to collect the rewards is to enter their email or phone number at the registration kiosk. The points or rewards will then be calculated after each purchase, and adjustments to the bill made.

Apps

You may want to experiment with using a custom mobile restaurant loyalty app to help your loyalty members manage their rewards. With an app, your customers download a custom-designed mobile app from their Apple or Google Play Store and then register for the loyalty program with their personal information. The app keeps track of rewards earned, which can then be redeemed at the PoS.

Receipts

If you can’t afford or don’t want to bother with PoS software or creating an app, you can offer rewards to your customers through codes on paper receipts. You can experiment with BOGO offers, discounts, add-ons, or free items. To redeem the offer, the customer simply brings the receipt back on their next visit to be processed by the cashier.

Punch Card

Another option for business owners with low budgets is a punch card. Punch cards are business-card-sized cards that loyalty members can carry in their wallets. Every time a purchase is made, a hole is punched in a corresponding square on the card by the cashier. Once a certain number of holes have been punched, the customer is then entitled to a free item from the menu. Punch cards are often used to great effect by business owners who want to push a certain menu item, usually offering deals like Buy 10 Coffees Get One Free.

Online

As a final option, you can have customers sign up for your loyalty program on your website. With this option, have your webmaster design a special portal on your site and a software program that will create a database from customers’ personal information and send out notices of discounts, free offers, events and the like.

What’s The Best Type Of Platform For My Restaurant?

Most business owners prefer a digital/mobile platform for their customer loyalty programs. These platforms use PoS technology to make accumulating points or rewards quick and easy. The best options for digital/mobile platforms are debit/credit card software, personal information platforms, and custom-built apps. However, these are also the most expensive options.

What Are Customers Looking For In A Loyalty Program?

These days, the mere fact that you have a loyalty program isn’t enough for customers – they’re looking for additional benefits that will make it all worth their while. As a business owner, you have to make sure that your loyalty program meets the standards that consumers are looking for when they hand over their personal information.

There are several main qualities that customers are looking for when deciding whether or not to enroll in a loyalty program. These include:

Ease of Use

Customers are looking for a loyalty program system that is easy to use. They don’t want to have to grapple with unwieldy apps, easy-to-lose cards, or other platforms that make the entire endeavor a hassle. Instead, they hope for a program that will make their lives easier, not harder.

68% of customers rank the ease of redeeming rewards as an important aspect of a loyalty program. Don’t get caught out in the cold – make sure your program is up to par.

Simplicity

In addition to ease of use, customers want a program that is simple and uncomplicated. All too many loyalty programs are difficult and unwieldy to manage, with a slew of excessive rules, regulations, and stipulations. For example, a loyalty program may try to dictate what time of day rewards can be redeemed, which menu items are eligible and which aren’t, and which stores are participating.

For the best results, business owners should create attainable and favorable incentives that customers will be able to redeem quickly and easily. For example, if you’re holding a BOGO event, make sure that customers can get access to the coupons or mobile app quickly and easily. Making your loyalty program simple will go a long way towards improving your bottom line and your customer experience.

Personalization

73% of customers rank personalized rewards as an important aspect of a loyalty program. Some business owners are stingy with rewards, only offering specific products for promotional sales or events and giving out coupons that only work for specific items. Doing this has been proven to significantly decrease sales.

For a truly effective loyalty program, make sure that you allow your customers the freedom to receive the rewards they prefer. For example, if you’re offering a 50% off coupon for Labor Day, make sure that the coupon is good for every item on the menu, not just the ones you’re trying to get rid of. Targeting your loyalty rewards to customer needs and preferences is a surefire way to ensure the success of your loyalty program.

How Can I Create The Best Loyalty Program Possible?

So now that you’ve considered all the logistics of building a restaurant loyalty program, how can you make sure to create the best loyalty program possible? There are several things you can do to take your program to the next level and really see an uptick in your restaurant revenue. For tip-top results, take these tips:

Train Your FOH (Front of House), Staff

A massive part of creating brand loyalty is having employees who understand your brand, know-how house operations work and have a positive attitude about serving customers. For the best loyalty program results, make sure you train your Front of House staff thoroughly in the logistics of your program and take the time to develop systems that create an impeccable customer service experience.

For example, make sure your employees offer personalized service to all customers at all times. Things like knowing a customer’s name, favorite booth or favorite dish can make a world of difference in building brand loyalty and creating a customer experience that will leave people begging for more. In addition, when your staff makes a mistake, ensure that they are fully trained to take full responsibility for that mistake and do whatever is necessary to rectify it.

Also, make sure you make full use of customer feedback. Paying attention to comments and complaints from customers, and even using things like surveys to get more information, can help you refine your customer experience to meet people’s wildest expectations. By responding to customer concerns, you can run a better business and increase sales.

Stay On Brand

When it comes to loyalty programs, many business owners make the mistake of trying to branch out too broadly with their house menus and branding, hoping to appeal to a wider base of customers. This can sometimes work, but it’s been proven that staying consistent with your brand is a much wiser business strategy and can pay off dividends in the future. By staying focused on what you’re good at, you can attract passionate brand ambassadors who will provide the repeat business you need to stay in the game.

Promote Your Loyalty Program Everywhere

Once you’ve gone to the trouble of creating a loyalty program, you want to make sure that as many people as possible take advantage of the great deals. This creates a base of new customers for your restaurant and ensures that existing customers know all about your new program. From Internet ads to in-house signage to mailers and flyers, make sure word gets out about your new initiative.

Engage On Social Media

Social media is a great place to advertise your loyalty program. From Twitter to Facebook, Instagram and YouTube, you might want to consider creating an extensive social media strategy to back your efforts. For tips on how to work social media to your advantage, consider reading Gary Vaynerchuk’s book Crushing It.

Give Guests FOMO

FOMO (Fear Of Missing Out) is a great motivator to get customers into your restaurant to try great new or best selling menu items. Make sure you use plenty of delectable-looking photos of your food, drink, and space to get people excited to come to your establishment.

Don’t Hesitate – Get Started Today!

Hopefully, this quick guide has helped you create a blueprint for designing a restaurant rewards program that will make your establishment one of the most popular in town! The great thing about a rewards program is that you can start one on a shoestring budget or create a state-of-the-art system – the important thing is that you start now! With the right strategy, you can make an impact that will change the course of your business.

LET'S GET STARTED

Find out more about how Shiftpixy can empower your business growth.