For Restaurants, Investing in Loyalty Is an Investment in the Future

By now, loyalty programs have shifted from a “nice-to-have” to a “need-to-have” for restaurants looking to retain customers and drive revenue amid record inflation figures and increased prices. In fact, research from Accenture found that more than 90 percent of companies have some sort of loyalty program. 

Although the development and implementation of loyalty programs have become increasingly popular, they still have a widespread reputation as generic, focusing more on margin-eroding “spend-to-get” and not catering to the individual customer. However, today’s restaurant digital platforms enable brands to deploy more personalized, intelligent loyalty solutions that brands can use to connect with specific audiences, creating customized loyalty campaigns and easy-to-enjoy experiences with rewards that can genuinely impress your customer base, as well as draw in new diners. 

Personalization Is the Key

A successful loyalty program takes a holistic approach and engages with customers across a variety of channels beyond the POS, including mobile app, online (web-based), social media, and email marketing and emerging channels such as voice, chat, and web3/metaverse . With the industry growing increasingly competitive, it’s becoming more imperative to offer customers additional ways to engage with the brand through non-purchase activities, and to use gamification alongside traditional deals and discounts at checkout. By sending notifications, posting special offers, or offering unique rewards and experiences, restaurants can keep their brand top of mind for customers, encourage diners to visit the restaurant again, and increase overall customer engagement.

In conjunction with more modern, digital POS systems plus the ability to incorporate additional, relevant brand channels, restaurants can leverage collected customer data to personalize their loyalty program experiences and make them feel more exclusive and special. For example, a restaurant can use a program member’s previous orders and dining habits to offer tailored recommendations, exclusive promotions or other rewards. This could include discounts on one diner’s favorite dessert or offering a two-for-one special for a couple’s Valentine’s Day plans based on household information collected. Moreover, restaurants can offer a multi-tiered rewards program, providing customers the opportunity to earn more exclusive and coveted rewards the more they continue to visit the restaurant. In this way, businesses can create a sense of progression and raise switching costs for their valuable guests. Non-transactional engagement and gamification encourages interaction beyond spend, which drives deeper brand loyalty and nurtures repeat business by elevating opportunities to connect emotionally with guests and increase brand equity.

Customers aren’t the only benefactors of personalization; it’s immensely value to restaurants as well. To see maximum success through loyalty initiatives, brands must differentiate themselves from competitors and highlight their brand identity through unique loyalty programs that aligns with and amplifies the brand story. This can be accomplished in a myriad of ways including:

• Offer unique rewards: While many loyalty programs offer discounts or free items, restaurants can stand out by offering rewards that are unique to their brand. For example, a restaurant can host a special loyalty members-only night featuring new meals or single-run items.
• Simplicity and  utility: Customers are more likely to participate in a loyalty program that is easy to use and provides an enhanced experience. Restaurants can differentiate themselves by making their program easy to sign up for and use, with clear benefits and rewards. Through engagement-based loyalty, restaurants can incentivize customers to utilize loyalty features that improve experience satisfaction such as saving favorites & reordering, contactless payment, or skip the wait benefits for sit-down restaurants.
• Excellent customer service: Above all, restaurants can differentiate themselves by providing superb customer service and creating a memorably positive customer experience. As the adage goes, customers may not remember what you did but they remember how you made them feel.  

Integrating with a Modern POS

When it comes to building out the perfect loyalty program, everything starts with a holistically connected digital transaction platform and POS. A restaurant POS system can help track loyalty programs through built-in features or partner integrations that enable restaurants to track customer purchases and reward them for their repeat business. These systems may also allow restaurants to create and manage loyalty program promotions, set up reward tiers, track customer progress towards rewards and connect meaningfully with guests in real-time with customer insight such as birthdates and favorite orders.

In addition to tracking loyalty program data, a restaurant POS system supports customer relationship management (CRM) by storing and sharing customer data from in-restaurant behavior. When on-prem customer behavior is combined with off-prem customer behavior, a restaurant can build a true 360-degree customer profile necessary for effective personalization.  

Looking Toward the Future (and the Metaverse)

The reality is that the future of loyalty programs in the food and beverage space will rely heavily on expanded digital capabilities to develop and build relationships with customers. Emerging technologies offer exciting and bountiful opportunities to expand and even reimagine the customer experience.

The evolution of loyalty will continue to unfold as platforms like the metaverse gain popularity. For example, we may not be far off from a restaurant using VR or AR technology to create a virtual loyalty program experience and offer virtual rewards alongside other in-person offers that customers can access through their smartphones or VR headsets. This can allow loyalty programs to offer virtual restaurant tours, virtual cooking classes, or virtual meet-and-greets with celebrity chefs. By offering these types of novel experiences, restaurants can create a sense of exclusivity and engage customers in a fully immersive way even when they’re away from the restaurant.

Cultivating an authentic relationship demands an emotional connection that goes beyond transactional rewards. The objective for restaurants is to create meaningful engagement and stay top of mind with customers, including when they’re not hungry. Looking ahead, loyalty will focus less on discounts and more on deepening the brand-customer relationship and creating positive brand associations, separate of deals and dollar figures.

It's no secret that the latest surge in loyalty investment can be tracked to recent economic concerns. In the long-term, though, the right, high-quality customer engagement platform will always enhance a brand’s relationship with its consumers, further solidify brand equity, and drive additional revenue opportunities.