Last Updated On December 01, 2020 / Written By Chloe Henderson

How to Start Restaurant Loyalty Programs- 5 Ideas & Tips

Restaurant loyalty programs reward guests for returning to an establishment to increase retention rates, sales, and data collection.

Although many restaurants focus more on acquiring than retaining customers, establishing a loyal clientele is more cost-effective and beneficial to maintaining profitability.

Restaurant loyalty programs provide incentives for returning shoppers and repeat purchases, boosting customer satisfaction and advocacy. It also enables establishments to collect consumer data to improve their business strategies.

5 Tips for an Effective Restaurant Loyalty Program

Returning guests typically spend more than first-time customers as they are already familiar with the brand and know what to expect. Therefore, creating an effective restaurant loyalty program will not only drive retention but income as well.

Aside from incentives, a reward system enables businesses to improve their customer interactions through data. In order to maximize the effectiveness of the loyalty program, restaurants should-

1. Offer Rewards for Each Visit

Studies show that 68% of customers will choose to dine at a restaurant that offers a loyalty program over one that doesn't, especially when they can collect rewards from each visit.

While some establishments only offer rewards for specific purchases, restaurants can encourage repeat customers by providing rewards for each visit. This also gives loyalty members more chances to collect points or redeem rewards.

However, restaurants need to find a balance for collecting and redeeming points, as establishments cannot sustain handing out rewards too frequently. Therefore, owners should determine what type of point system can elongate the accumulation process while still encouraging customers to enroll in the program.

2. Establish a Simple Reward System

A study found that 73% of surveyed customers prefer a reward system where they can accumulate points. Since many restaurants use the point reward system, customers are already familiar with its procedure. This makes it simple for establishments to adopt the idea and personalize it for their brand.

The point system also gives customers a clear goal to work towards by creating set targets to meet before redeeming earnings. Many restaurants reward members with gift cards to give customers the freedom to choose whichever menu item they like, unlike vouchers, which typically have restrictions.

3. Provide a Personalized Customer Experience

Aside from monetary incentives, customers also enjoy personalized rewards, such as exclusive products. By collecting data, including purchase histories, from each loyalty member, restaurants can determine what items customers would prefer.

Businesses also have access to members' personal data, such as their emails and birthdays. This enables restaurants to send special offers directly to members for their birthdays and holidays.

4. Establish a Digital and Mobile Platform

Nearly 80% of customers enrolled in a restaurant loyalty program say it is important to be able to access their account digitally via phone or mobile device.

By establishing a digital loyalty program, customers can collect rewards with in-person and online orders. This also allows customers to check their accounts on the go with their mobile devices, rather than having to track visits manually.

With a digital loyalty program, restaurants can use their point-of-sale (POS) system to collect customer data with every transaction. This eliminates physical paperwork and manual calculations required to track each member's progress.

5. Train Employees to Navigate the Loyalty Program

Restaurants must ensure that their employees are well versed in the loyalty program so they can quickly enroll guests on the spot. Workers should be able to explain the benefits of the program and set-up new accounts without elongating other shoppers' wait times.

Some restaurants even offer a one-time incentive, such as 10% off, to encourage guests to sign up.

5 Restaurant Loyalty Program Ideas

Restaurants are continuously innovating their reward systems to increase engagement and retention. There are five loyalty program frameworks, in particular, that have already proven to be successful-

Mobile Application

Most restaurants with loyalty programs, especially large chains, have created their own mobile application where guests can create an account themselves. Mobile apps have significant functionality, allowing customers to scan menu items, redeem points, and even pay through the application.

By developing a mobile app, customers don't need to carry around a loyalty card or memorize their member number. Instead, they can log in to their application and automatically collect points.

Credit Card

Some restaurants offer loyalty credit cards, which allow customers to collect points whenever they use it to make a purchase. While some cards can be pre-loaded, others require customers to open a line of credit.
Loyalty credit cards often have more incentives, such as cashback and point systems, for when purchases are made in and outside of the restaurant.

Punch Card

Smaller restaurants use traditional punch cards to track customers' visits. Whenever a member makes a purchase, they present their card to the employee for them to punch. Once guests reach the target number, they can redeem their cards for the reward.

While this is a good option for restaurants that do not have a modern POS system, this method requires customers to keep track of their punch cards in order to track visits. Members could potentially lose their cards and have to start the process all over again, causing frustration.

Automatic Reward System

Advanced POS systems have built-in loyalty programs that restaurants can customize. This enables establishments to immediately enroll guests and track their progress virtually. All customers have to do is enter their personal information, including their name, date of birth, and email, to begin.

The POS solution automatically sends guests their points via email with every purchase, eliminating the need to keep a physical member card on-hand.

Receipt Marketing

To generate more enrollment, restaurants can print the details of their loyalty program on customers' receipts. The description can include the websites where guests can create an account, along with a discount code as an incentive.

Some businesses even use receipt marketing to encourage repeat purchases for specific items by offering a coupon that can only be used in the future.

By implementing restaurant loyalty programs, businesses can increase their retention rates and promote repeat purchases, generating more customer data and revenue.