How to run an up-to-date restaurant loyalty programme in 2023

You may not have it marked on your calendar, but April is International Customer Loyalty Month! No matter whether you were aware of it or not, this is the perfect time to reflect on your customer loyalty efforts.

Ask yourself: Do you have an established, year-round strategy to drive loyalty at your outlets?

If the answer is no – and for all too many businesses, it is a no – you have an opportunity to attract the most valuable type of customer, and grow your business significantly in 2023.

Why do I need a loyalty programme?

First things first: why should you bother with a loyalty programme?

Loyal customers are the best customers. Loyal customers spend more – increasing customer retention by just 5% can increase business profits by 25-95%. It’s also 5x cheaper to retain a current customer than it is to acquire a new one.

A well planned loyalty programme helps you hit these numbers by giving you all the information you need to better understand your guests and attract them back. Anonymous guests offer limited insights and are of limited value. But by getting your loyalty members to log in and order directly with you, you can get to know their preferences, and craft incentives that will keep them coming back.

There is a subtle difference between loyalty programmes and reward programmes. Reward programmes offer shiny perks to attract customers back. Loyalty programmes seek to establish a deeper and more meaningful connection with the customer to make them brand ambassadors who are loyal beyond the perks.

While creating brand ambassadors should be the ultimate goal of most programmes, it is no small feat. It’s wise to establish smaller goals that can act as stepping stones to this main aim, such as:

  • Recruiting new customers.
  • Driving repeat visitors.
  • Gaining a deeper understanding of customers (both individual and segmented).
  • Increasing customer lifetime value.
  • In cases where the programme is combined with/includes a CRM, using your understanding of the customer to design menus and develop promotions.

What does an effective loyalty programme look like?

You’re ready to create and run your own loyalty programme. What are your options?

Free or fee? 

Let’s look at how two titans of the hotel industry, Marriott and Accor, take different approaches:

  • Free: Marriott’s Bonvoy loyalty programme uses the earn and burn model. Signup is free, and you earn points when you stay at certain hotels, which you can then redeem for free or discounted stays. 
  • Fee: The Accor Plus programme uses a different and more exclusive strategy. It requires loyalty members to pay an upfront annual fee, which then grants them access to exclusive offers and deals. 

Most loyalty programmes follow Marriott’s earn and burn model, as it tends to be more popular with customers – they feel like they’re getting something for nothing. The benefit of a fee-based programme is mainly its exclusivity; not everyone will see value in it, but those that do can enjoy serious benefits. High fee, high reward credit cards are another example of this approach.

The technical boxes to tick

Stamp cards still have their place, but in 2023 the most successful loyalty programmes are driven by technology. No matter whether you choose fee or free, or whether you’re revamping an old programme or setting up something new, all good, modern loyalty programmes are:

  • Web-based: Members can manage their membership through purpose-built apps and portals.
  • Frictionless: Earning and burning points, or applying loyalty deals and discounts, must be a simple and organic process.
  • Omni-channel: The programme should be ever-present, available through online ordering, in-person bookings, ecommerce stores and delivery partners.
  • Integratable: It should either include a CRM or seamlessly integrate with your current CRM (and other business tools) in order to consolidate data and segment and hyper-personalise the loyalty experience.

What your programme should deliver

The simplest way to tick all the boxes above is by building your programme with the help of a third-party vendor. Whichever partner you choose, you need to ensure the resulting programme is capable of delivering two things:

Hyper-personalisation: Your programme can’t offer the same benefits for all. Each reward should be carefully crafted for each member in a way that will ‘wow’ them. You can achieve this through:

  • Granular segmentation: The more segments you have, the more personalised the programme will be. But you can’t have an infinite number, so work to find the balance between personalisation and the workload of conducting such granular segmentation.
  • Artificial intelligence: Perhaps granular segmentation (and infinite personalisation) is within reach – it’s now becoming possible to employ AI to extend different rewards to every single guest.

Instant gratification: Your loyalty programme shouldn’t feel like hard work. You can’t hold back on meaningful perks until a member reaches a certain tier, because customers simply won’t bother. Offer perks and incentives throughout, such as:

  • A welcome/signup perk
  • Pay with points, no matter your balance
  • Paid rewards: Offer a ‘pay to play’ system, similar to video games, where you can simply purchase points or rewards

Extend the focus beyond April

“Customer Loyalty is about the next time – every time. Customers usually have a choice. So, what are you doing today that will make your customer, the next time they want what it is that you sell, do business with you instead of one of your competitors?” – Shep Hyken

At Aigens we’re here to help you do exactly that. Our loyalty solution allows you to shape your programme however you please: stamp cards, rewards points, tiered memberships and more. It uses segmentation to deliver deeper customer insights that drive loyalty. And our intuitive tech grants both you and the customer greater control over the programme.

Ready to get loyal? Find out more here.