With COVID-19 throwing the restaurant industry into disarray this year, a reliable customer base is paramount to success. Enter loyalty programs. They’ve become more important than ever to help stabilize business and encourage guests to keep coming back. Let’s take a look at why loyalty programs have become a focus at this time, how restaurants have had success with their programs and what you can do to help make loyalty work for you.
Why Loyalty Programs Matter Now
Traditionally, it’s more cost-effective to focus on keeping customers than acquiring new ones. So it makes sense financially right now to invest in loyalty vs. acquisition. When you focus on current customers and put your energy into keeping them coming back and generating reoccurring revenue, you could see a bigger impact on your top and bottom line. Loyalty programs can also give you insights who your most valuable customers are and their buying habits. This information can prove vital if operations need to be adjusted, and more precise dials can be turned based on the trends that loyalty data provides. And finally, loyalty programs help keep your restaurant top of mind. If you’re not one of the first places that guests turn to, you may not recover as quickly as those who are.
The Proof Is in the Programs
Several restaurants have seen great success with loyalty programs during the pandemic. Panera Bread’s program helped drive interest in a new coffee subscription service, just as the pandemic began. Wendy’s successfully launched their own rewards program this summer to drive customer frequency. Dunkin’s DD Perks program enrollment increased year-over-year by nearly 110%. Starbucks Rewards has continued to grow its long-standing successful loyalty program, seeing a 17% gain in members since this summer. And when Taco Bell unveiled their updated loyalty program last month, the website and app crashed at launch due to the crush of interest. While these success stories focus on quick service and fast casual restaurants, the appetite for loyalty programs stands to apply to casual dining as well.
Keys to Loyalty Success
So what can you do now and next year to position your restaurant for loyalty program success? With it being reported that 75% of Americans have altered brand preferences during the pandemic, efforts centered on retaining this loyalty should make guests feel appreciated, recognized and rewarded. When looking at launching or improving a loyalty program, start with those compelling reasons to keep customers coming back. After that, eliminate as much friction in the process as possible. Make it easy for customers to sign up and redeem rewards, whether that’s improving app technology or operations in-store. Consider emphasizing personalization as well. With more customers connecting with restaurants digitally, there are more and more opportunities to deliver tailored, personalized offers and messages. And finally, with the pandemic still influencing behavior for many, try to offer as much flexibility as you can around reward redemption. You’ll not only make it easier to take advantage of points or benefits, but you’ll foster goodwill as well. Because loyalty programs aren’t just about the rewards, they’re about generating a real connection with your guests that keeps them coming back again and again.