Why Data Is the Secret Ingredient for Successful Loyalty Programs

Every restaurant’s mission is to get customers in the door and then keep them coming back for more. While there’s no single recipe for recruitment and retention success, many restaurateurs are leveraging a proven approach: loyalty programs. 

The recurring business these programs drive ultimately helps increase revenue while fostering customer loyalty. In fact, a study by Mastercard found that brands with strong loyalty programs were 1.6 times more likely to experience double-digit revenue growth. 

The benefits of loyalty programs are clear, and the industry is responding. The National Restaurant Association reported that roughly 61 percent of limited-service operators and 52% of full-service operators plan to invest more in loyalty programs this year. But as loyalty programs become more common and competition grows fiercer, standing out is harder than ever. By adopting a data-driven approach and personalized strategies, your loyalty program can truly stand out.  

Know Your Customers and Your Business

Developing a successful program boils down to understanding and meeting consumer needs and preferences. Loyalty programs succeed by offering customers value in return for their business, so it's essential to know what "value" means to them. By gathering the right data, restaurants can gain insights into customer preferences and ensure their loyalty programs target the right audience.

Data to consider includes:

• Demographics: Information such as gender, race, income, and age can reveal trends and patterns within specific groups.
• Spending Habits: Purchases at restaurants, typically discretionary and impulsive, vary based on the type of establishment. For example, customers at a steakhouse may be willing to spend more for a fancier cut of meat, versus a fast-casual restaurant customer who may prioritize paying for convenience.
• Personal Information: Contact details such as phone numbers or email addresses can help you reach your audience through additional channels.
• Locale: Consider the cultural identity of your restaurant’s location and the community ties customers may have.

Understanding customer preferences and behaviors gives restaurants valuable insights into their customer base, helping them refine their offerings and marketing strategies. By leveraging technology to streamline data collection and analyze customer data, restaurants can maximize the value of loyalty initiatives.

Leveraging Data for Personalization

Equally as important as gathering customer data is taking the time to understand your business and what you offer customers in turn. Knowing what sets your restaurant apart helps tailor loyalty program rewards that enhance the customer experience. 

Customized rewards that align with your restaurant’s identity and service offerings can create a stronger connection with customers. This not only enhances your loyalty program but also ensures it better aligns with your overall brand and meets your customers' desires. Personalization ensures rewards are more relevant to customers' preferences and dining habits, increasing the perceived value of the program and encouraging frequent visits. 

In fact, 74 percent of consumers are willing to provide personal information for more individualized offers and rewards. When customers feel that the restaurant understands and caters to their individual tastes, it fosters a sense of loyalty and belonging, making them more likely to return.

Elevating Loyalty Programs with Branded Merchandise

With fierce competition for customer attention and more restaurants utilizing loyalty programs, picking the right rewards can make or break a program. This is where the hidden hero of loyalty programs comes in: branded merchandise. 

Let’s take the refrigerator magnet, for example. Every daily glance at the product – located in a prominent spot in the home – serves as a subtle reminder of your establishment. Unlike gift cards or coupons that encourage a one-time return visit, merchandise creates long-term impressions and establishes a continuous, tangible touchpoint. In fact, a 2023 study from ASI reported that the average branded t-shirt garners 5,053 impressions over its lifetime.

The possibilities for branded merchandise are virtually limitless, ranging from calendars and collectibles to coasters and bottle openers that can provide long-term usage. To truly reap the benefits, however, it’s vital to keep data at the heart of your strategy. Rewards need to go beyond simply adding a logo to a t-shirt to make an impact. 

Customizing merchandise to reflect your restaurant's offerings, identity or locale can make these items more meaningful to your customers. For instance, a steakhouse might opt to provide branded steak knives to their customers, reflecting the restaurant's concept, aligning with the value of menu offerings and appealing to the purchasing patterns of frequent customers. Notably, the same reward would not make sense for a QSR concept, whose customers value different aspects of the business and have different spending behaviors. 

Regardless of the product, creative and appealing designs turn customers into brand ambassadors – most times without them even realizing it. By achieving that “WOW” factor in regards to the creativity and practicality of the custom product you’re offering, you ensure your brand leaves a lasting mark in the minds of your customers and stands apart from the competition. 

A Recipe for Success

Incorporating branded merchandise into loyalty programs and utilizing data can set businesses apart in a competitive market. By offering unique and desirable items that reflect your brand, backed by personalized data specific to your customers, you create a memorable experience that fosters deeper connections and encourages repeat visits.

Data such as demographics, purchasing history and local ties provide a clearer picture of your customers, a key element to ensuring that program rewards are targeted and impactful. With custom rewards and a long-term approach, businesses can differentiate themselves and remain top of mind with their loyal customers.