HOW TO CREATE A LOYALTY PROGRAM THAT ACTUALLY WORKS
It’s a lot less expensive to hold on to existing customers than to bring in a whole new batch. This means that a successful business must do everything it can to keep existing patrons happy and increase the likelihood of their return. Out of the various ways a good restaurant can do this, from delicious food to a strong online presence, there’s one key option that should not be forgotten: implementing a loyalty program.
A lot of restaurants have opted for this, asking their customers to sign up for a free rewards program that keeps them spending their money in all the right ways.
Although loyalty programs promote repeat business, it’s not as easy as it seems to build one that works successfully both for those selling and those buying. If you’ve ever thought about implementing one of these into your business, you’ve come to the right place.
WHY SHOULD YOU DO IT?
Implementing a loyalty program has an ample set of benefits that no business should pass up on.
Rewards programs have proven to cause an increase in guest spending because they feel more inclined to buy more if there’s a possibility of being rewarded for it. In their quest to unlock rewards and earn more points, diners may find incentive to spend a bit more to reach their next reward threshold and thereby earn rewards sooner.
Another proven benefit of implementing a rewards program is customer retention rates also go up. The promise of added benefits and rewards keeps existing customers engaged and interested, which is a lot cheaper than spending money trying to entice strangers in for a new experience.
Customers that belong to a loyalty program are also more likely to recommend the business to friends and family, which is a form of coveted “free publicity”. People are more likely to believe in a restaurant that’s recommended to them by someone they know and trust, rather than blindly accepting what an online advertisement or review might tell them. Because of this, it’s quite probable that referral rates will increase and, as a result, new and first-time customers will become return customers.
Loyalty programs also help establish a sense of community. Once your customers sign up, they feel like they belong to something that has their needs and wants in mind. People love being rewarded for good behavior and made to feel special. Giving good customers a prize, whatever it may be, for showing their love for you is a valuable way to show your appreciation back, and it’s beneficial to both parties. Once they sign up, a personal bond is established and can only grow stronger if it’s done right.
HOW SHOULD YOU DO IT?
Starting a loyalty program should be a well thought-out process that ensures everyone’s receiving what they need. Before you can truly consider creating one, it’s important to carry out a thorough investigation about who your customers are, what would benefit them more and how to go about giving them these benefits. Once you’ve honed in on all these questions, you can get going on creating the perfect fit.
A rewards program shouldn’t just be about getting customers to spend their money. That’s a big part of it, of course, but they’ll smell that out instantly. When creating one, try to tap into the company’s core values and into your customers’ values as well.
The next step in this venture is to find a name for your new loyalty program. The name has to be catchy, enticing users to sign up and getting them excited about belonging to the community. But it also has to make sense and be relevant. People don’t want to have to think about what you’re saying or what your name means.
Once you’ve come up with a name for your program, the next step is to provide as many opportunities as possible for your customers to learn about and enroll in it. Don’t limit yourself to a post on social media. If you’ve created a database, send them an exclusive email that lets them know they can sign up easily. Make sure there’s in-store advertising everywhere you’re sure your customers will notice it – from cash registers to bathroom stalls. The more ads you have around, the more they’ll catch a diner’s eye. If they haven’t bitten yet, make sure your staff is trained to encourage diners to sign up at the end of their meal. Don’t just leave it to chance. Tell them upfront there are benefits if they do, and offer an instant reward like a free dessert or double points if they sign up on the spot.
Now let’s get to the juicy part. How exactly should your rewards program work? Every restaurant has different needs, but there’s a few set guidelines that you should try to follow to make sure your rewards program works successfully.
The first parameter is that your program should reward a variety of actions, not just how much they spend. Give them points for checking in when they’re having dinner or tagging the restaurant on social media. Recompensing them for more than just money spent will encourage users to work harder to collect as many points as possible, and they won’t feel like you’re only doing this to take their cash.
With this in mind, make sure your points have monetary value. Assigning a dollar value to points, for example, will help them see their results in quantifiable ways that are much easier to understand than an arbitrary points system. Your customers are spending money, after all, so make it count for them as well.
Tap into people’s competitiveness and make your program a game for customers so they’ll be even more encouraged to spend and grow their points. If you’re up for the challenge, create different levels or ranks that users can belong to, display their names on a leaderboard, and let your customers feel like they’re accomplishing more than others and staying ahead of the competition.
Customers that belong to a rewards program should be made to feel like they’re VIP – even if there are hundreds of them. Engage with these customers on a first-name basis whenever possible, and make sure they feel special and remembered when they return to your restaurant. A server asking them if they’d like “the usual” can go a long way with a recurring diner.
Oh, and one last tip? Ditch the punch cards. Most people today own a smartphone that lets them download apps. This way, your customers won’t complain about losing their card or forgetting it at home, and it’ll be in their pocket with them at all times.