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How to Bring Guests Back From The Dead With Customer Loyalty Analytics

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Tessa ZuluagaAuthor

Building relationships with your customers by engaging them with an effective customer loyalty program is critical to the long-term success of your restaurant.

Ideally, you know your most frequent customers by name; you might even know what they order and – better yet– what to suggest based on what they have ordered in the past.

Now, what about the customers you don’t see regularly or the customers who you used to see, but haven’t seen in some time? How do you get them back in the door? What are your customer needs?

The answer lies within your ability to leverage the power of a customer loyalty program and your customer loyalty analytics, both to build a loyal customer base and to bring back lapsed customers.

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How Do You Define Customer Loyalty In Your Restaurant?

Customer loyalty looks different depending on the type of restaurant you have.

A deep-dive analysis of your customer loyalty analytics data will reveal some important trends about your customers' behavior, and how long it takes for them to transition into loyal customers.

How can you measure customer loyalty? Looking at your customer loyalty analytics, find the average number of times a repeat customer will visit your restaurant within a 1-3 month time frame. We call this your customer loyalty ratio.

For a fast-casual restaurant in a high-traffic business area, a customer may be considered loyal on the third or fourth visit in 30 days; for fine dining restaurants, a customer may be considered loyal on the guest’s third visit in 60 days.

By understanding the customer loyalty ratio for your restaurant, you will be able to understand when you may need to regain a customer based on their lack of engagement during the given timeframe — and which restaurant marketing levers you'll need to pull to get them back.

Once guests are considered loyal, focus on your customer retention rate. In general, it’s important to simply create a consistent positive customer experience, but today we can make things more technical. Combine the customer data available within your restaurant POS – another name for your customer loyalty analytics – with an email marketing strategy, and you have a recipe for customer lifetime value & retention success.

Email marketing has maintained its status as the most effective channel for maintaining customer loyalty and increasing revenue; it also remains one of the few digital channels with a clear, trackable ROI. If you aren’t sending follow-up emails to engage with your restaurant customers already, you are missing a valuable piece of the marketing pie. Consider sending out emails with incentives, social media updates, and specials that are available for current customers only.

By using your customer loyalty analytics – like those available from Toast – with a smart email marketing strategy, you will grow revenue by increasing the frequency of visits from existing customers, grab the attention of new customers, and drive additional sales from lapsed customers.

What Should I Look For In A Customer Loyalty Solution?

There are many types of loyalty programs today; some use an app, some use a third-party website, some integrate directly through your POS, and some still use punch cards.

Finding the right loyalty program for your business is about deciding which platform makes the most sense both from a cost perspective and ease of use for customers.

In the specific example we are about to explore, the restaurant in question uses the customer loyalty solution offered by Toast. They had tried another customer loyalty program in the past, but the POS tie-in and the value of the customer loyalty analytics available have made this the most effective option for them.

The rich insights you stand to gain from Toast’s customer loyalty analytics will revolutionize your customer retention efforts and grow your bottom line: restaurant-goers who participate in Toast loyalty programs spend, on average, 39% more than non-loyalty guests.

Here’s how the platform works: during a customer interaction, the POS system asks if they would like to join your restaurant’s customer loyalty program.

The program is points-driven and takes very little effort upfront to sign up; it likewise takes very little ongoing effort for the customer to add points to their account and redeem points for rewards in your restaurant.

One of the benefits customers will enjoy about participating in a Toast-hosted customer loyalty program is that once they achieve a certain number of points, they receive a dollar amount of credit that they can apply to their next restaurant visit. This tactic of transitioning points into redeemable dollar credits over a period of time will make your restaurant guests visit again and again.

Every time guests on your customer loyalty program visit your restaurant and pay for their meal, either the print, digital, or email receipt produced by the POS will clearly state how many points they obtained from the current visit and how many are needed for the next reward redemption.

Guests also can log in to your restaurant's loyalty program online and check their balance for themselves. The URL for your restaurant's customer loyalty program is:

https://www.toasttab.com/[RESTAURANT-NAME]/rewards

While these rewards balance receipts are great, the real meat and potatoes needed to drive your CRM strategy is the granular data available from your customer loyalty analytics.

The proliferation of robust, loyalty program solutions available today makes it more challenging for restaurants to stand out to customers on their loyalty program alone. Leveraging the insights restaurants have about customers' preferences and buying behavior as a result of having a great customer loyalty program is what will set your restaurant apart.

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Learn Loyalty Insights & Leverage

As famed restaurateur Danny Meyer explains in his book Setting the Table, taking care of your staff leads to guests feeling taken care of as well. The theory is that happy staff and happy guests lead to a happy bottom line. 

Nick Boban, Owner and Operator of Craft Lounge, definitely has a happy team and happy guests, but he wants to see his POS work harder for his people.

“[Our legacy POS system]claimed to have a loyalty program,” Nick says with the typical frustration [the legacy POS system] brings up in him. “It was so confusing. I couldn’t even figure out how to sign myself up.”

Like payroll, scheduling, and staff communication, the loyalty program integration sets Toast apart from POS competitors. Nick joined Toast with a list of 1,500 emails. With Toast Loyalty, Craft Lounge rewards their regulars with $5 off for every $100 spent. 

The result? They now have a list of over 4,000 emails, more than a 160% increase in just six months. Their email newsletter serves as a way to let fans know about educational classes, the Craft Lounge booth at the local farmer’s market, and even their retail store with cocktail syrups to enjoy a Craft cocktail at home

The future for Craft Lounge is “communal integration,” Nick told us, and it’s made possible thanks to Toast integrations.

Doing his part for the community includes preaching about Toast. 

“I don’t think I could find a scenario for anyone in the industry that shouldn’t use it,” Nick says. “We’ve been on Toast since February 2023, and I’ve made five referrals since then. Two of them signed contracts. I’m also a part-time Toast salesman,” he says with a laugh. 

How Can I Apply Craft Lounge's Strategy In My Restaurant?

Now that you see the results that can be achieved by combining the power of customer loyalty analytics data with email marketing, here are seven ways to improve your email marketing strategy:

1. Create an email signup box or form on your website for visitors.

2. Develop and send a welcome email with messaging for everyone who signs up for your email list; promote your customer loyalty program and its benefits.

3. Send emails regularly to your email subscriber list; these emails should include special offers, menu updates, and exclusive promotions just for loyalty program members.

4. Continue to promote (if you haven't started already, get going) your loyalty program in your email marketing.

5. Develop targeted email segments that will target customers who are close to reaching a reward.

6. Thank customers for being loyal! Your customer data analytics should provide information as to how close people are to achieving a reward; it also tells you how often someone visits. Make your best customers feel special by thanking them for their visit. The retail industry does a great job of this with “thank you for your purchase” emails, so borrow that idea!

7. Analyze your email marketing metrics along with your customer loyalty analytics to see how effective your CRM – customer relationship management – strategy is, and then make adjustments.

8. Ask for customer feedback. You want your loyalty program to not only increase your repeat purchase rate but also improve your overall customer satisfaction score. Asking for feedback on your new loyalty program shows how much you care.

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How Kaldi’s Coffee Brought Guests Back with Toast Marketing

Similar to Craft Lounge, Kaldi’s Coffee located in St. Louis, MO and Atlanta, GA, found great success with Toast Marketing.

“We do a lot of marketing campaigns. We send out weekly emails, if not twice a week, via Toast Marketing,” shared Keith Kildron, COO of Kaldi’s Coffee Roasting Co.

Kaldi’s Coffee also incentivizes guests to come back using Toast Loyalty. “Rob, who handles our campaigns, has been running Loyalty campaigns targeting some of the drive-thru locations to try to get guests to come back for repeat business,” added Keith. 

Gone are the days of physical loyalty cards that get lost or destroyed — Toast Loyalty allows guests to swipe their credit card, opt in, and earn points. No extra steps are needed.

“We used to have punchcards,” said Keith. “It’s much easier now for loyalty guests [with Toast Loyalty]. I think everybody should have it.” 

Kaldi’s Coffee was able to use the breadth and strength of the Toast platform to power its growth and supercharge its guest experience. Are you interested in learning more about how Toast is built for cafes & bakeries like Kaldi’s? Click here to see how your cafe can serve up the morning fix with an intuitive, easy-to-use POS — now with flexible payment options.

Set your restaurant up for success

The integration of customer loyalty analytics and a well-crafted loyalty program can be a powerful tool for the sustained success of your restaurant. Understanding customer loyalty through analytics provides valuable insights into customer behavior. With this integration, you can not only increase your number of customers but turn them into loyal ones.

The use of a strong customer loyalty solution, such as Toast, exemplifies how technology can elevate customer engagement. The insights gained from Toast's loyalty analytics empower businesses to not only retain existing customers but also revive past ones. The success stories of Craft Lounge and Kaldi’s Coffee show the benefits of adopting a comprehensive loyalty program.

Ultimately, customer loyalty is not just a metric but a relationship that can be revitalized with the right tools. By using these insights and strategies, you can not only bring back customers from the brink of churn but also foster a community of regulars, setting up the restaurant for success. To receive customer feedback to help discover important analytics such as your Net Promoter Score (NPS), Customer Satisfaction Score (CSAT), and Customer Retention Rate (CRR) check out our Free Restaurant Survey Template.

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Restaurant Survey Template

Use this template to ask your guests about their experiences in your restaurant. These survey questions will give you the data you need to make informed changes and improve the overall dining experience.

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DISCLAIMER: This information is provided for general informational purposes only, and publication does not constitute an endorsement. Toast does not warrant the accuracy or completeness of any information, text, graphics, links, or other items contained within this content. Toast does not guarantee you will achieve any specific results if you follow any advice herein. It may be advisable for you to consult with a professional such as a lawyer, accountant, or business advisor for advice specific to your situation.