Fourteen years ago there was a stop-the-press Harvard Business Review article blasting the value of loyalty programs.
One of the harsh realities in that piece: "What we’ve found is that the relationship between loyalty and profitability is much weaker—and subtler—than the proponents of loyalty programs claim." I've been hard on them too, to be honest.
So, here's where I tell you that there's no point in pursuing a loyalty program, right?
It is still far less expensive to retain your current guests than to attract new ones. That means you need an airtight plan for engaging your first-time visitors and your regulars.
Here are five steps that should guide how you build (or re-build) your restaurant loyalty program:
It's important to periodically test and review how your offers lure people to join your restaurant loyalty program. Coupons are the obvious bait, but what about special dining privileges, access to hidden menu items, reserved tables, or front-of-the-line tickets?
Try new things as incentives, or at least A/B test the offers on your website to see what draws a higher percentage of people in.
Commitment and consistency are the two keys to moving customers from new enrollees to active loyalty club members. Add subtle new elements to your communications, keep testing, and stay motivated when rebuilding your restaurant loyalty program.
Sometimes an average loyalty program can become an above-average one simply through having the right consistency of communications. Start with regular emails that are written just for your loyalty club members and triggered emails when they've earned new awards.
Move your customers from enthusiastic early loyalty club members to die-hard brand ambassadors with an achievement plan. Make your tiers, levels, or new rewards realistic and crave-worthy.
An email list is different from a loyalty program. With email lists, you blast offers and coupons and maybe have a birthday element woven in. With a loyalty program, you've got a hierarchy of rewards that members unlock. Make yours straightforward and realistic.
Make it a big deal when a member unlocks new privileges, coupons, and benefits. Have pre-created messages, social media posts, and even snail mail postcards where applicable.
You don't need to go over-the-top when someone gets a free muffin, but by all means celebrate every reward your loyalty club members earn. The more automated the system for notifying members, the better.
Make it easy for your members to share their privileges, awards, and achievements through social channels. You could even add a loyalty element to their social shares. For example, when a member earns a free entree, let them unlock another one simply by sharing that they received that award on Facebook when they use your designated hashtag or tag your restaurant.
Thinking through these five steps in your loyalty program process will help you get the most from it for both your restaurant AND your guests.