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Loyalty Programs Boost Restaurant Business

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Restaurant Loyalty ProgramsRestaurant patrons will attend a preferred establishment 35 percent more if the restaurant offers a loyalty program, according to research from Loyalogy, Asheville, N.C.

Such a program won’t be enough to entice people to go to a restaurant that they patronize any way, or to make more total restaurant visits than they might otherwise (e.g., 11 casual dining visits a month rather than 10) Dennis Duffy, Loyalogy president, told Loyalty 360. But a properly executed loyalty program can result in a patron choosing one of those restaurants over another.

There is little difference if the patron is paying for the meal (a 33 percent increase in visits) or if he or she is being reimburse by a company (a 38 percent increase in visits), Duffy added.

Duffy’s findings were based on his firm’s LoyaltyPulse study, which was based on detailed survey responses to 50 questions among 1,124 consumers from across the U.S. with more than $75,000 in annual income.

When designing a loyalty program for restaurants it is essential to offer customers rewards that motivate customers, to facilitate the enrollment process, to properly train staff and to use the loyalty program to augment customer communications, Duffy said.

Among the items that customers find most appealing in a restaurant loyalty program include unexpected surprises, like a sample of new appetizers offered to loyalty program members; communications that are in line with a customer’s visits -- the more visits, the more communications are acceptable without becoming annoying; and rewards that go beyond discounts, such as a free meal at certain point level or a free desert on a birthday or on a membership anniversary.

If done right, a loyalty program will turn some patrons into net promoters of the establishment, Duffy added. He strongly emphasized the value of unexpected surprises, such as the appetizer sample.

In addition to being worth a customer’s time, a rewards program has to be able to bring the restaurant enough business to be worth the effort, Duffy added. “In the restaurant business, there are a lot of moving parts. There is a lot of turnover in servers. They have to be able to represent the brand and provide good service.” Promoting a loyalty program is an additional duty that may be just an additional complexity that the establishment or the server do not want to deal with.

So to make sign-up easy, Duffy recommended offering to use a phone number for initial registration, enabling the customer to start earning points. However, rewards would not be able to be redeemed until more complete information is given and the membership is registered.

Among the survey’s other findings:

  • Nearly two-thirds of consumers (65 percent) of respondents report they would recommend a restaurant more to others if that restaurant offered an appealing rewards program.
  • Four out of five consumers prefer a rewards program with a clearly-defined proposition in which they earn points for rewards than a program built solely on periodic, surprise free items.
  • Consumers desire a simple reward program enrollment process in the restaurant and would prefer to supply additional information online after they have left the restaurant.
  • Although consumer wallets are bulging with plastic cards, 60 percent of respondents stated that they don’t mind carrying a membership card for a rewards program if it’s necessary.
  • While only 10 percent of respondents have paid a fee to join a restaurant rewards program, half said they would be willing to do so if the program offered adequate value.
  • A single rewards program membership covering multiple restaurant brands has significant appeal to consumers.  Seventy-three percent of respondents agreed they would like to have one rewards program membership that was honored at multiple restaurant chains.

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