Winning Millennials Through Customer Loyalty Programs

We have heard over the past few years that millennials are killing traditional restaurants. Chains haven’t been able to keep up with the changing demands this key customer base expects. As a result, their sales numbers are down across the board, leading to more restaurant closings.

But it’s not just well-known chains struggling with millennial guests. Thousands of smaller regional chain and independent restaurants are trying to figure out how to attract millennials. And it isn’t just enough to attract them once, the real question is:  how do you keep them coming back?

Millennials seemingly prefer having  meals delivered or having a personalized experience. For a restaurant, this involves unforeseen costs such as hiring drivers, buying vehicles, insurance and other items. Plus the typical amount per purchase through delivery is often far less than an in-restaurant purchase. 

How can you help create a personalized experience for them?

Millennials expect personalization anywhere they are going, from restaurants, to retail stores or hotels. The issue is that many traditional restaurants don’t have any options to effectively personalize customer experiences. But you can’t expect for millennials to tell you what they want. You are going to need to know what they want. How will you know what your customers want without them telling you? You will need to keep track of what your customers are ordering to identify specific trends. From these trends, you can offer each customers more personalized suggestions and promotions.

Now you must be wondering, “How can I possibly track each and every customer’s purchase?” This is where a customer loyalty program is your solution. Through an integrated customer loyalty program, restaurant owners and managers can easily keep track of each customer’s purchase. And by integrated, we mean having your customer loyalty program integrated with your POS system. Also with a customer loyalty program, restaurant owners and managers can  build marketing campaigns, sales campaigns, social media activities, quests and analyze data.

A customer loyalty program provides points and rewards to attract and retain new customers. Typically customers can earn points through purchases, social media activity, inviting friends and completing other tasks.  And so, as customers earn points and qualify for rewards, they are more likely to stay loyal with your restaurant and not visit a competitor.

Sounds simple enough, right? Well then, let’s dive deeper into how you can create a points strategy and rewards strategy for your customer loyalty program

Points Strategy

With the goal of attracting and keeping millennials as a key customer base, how you structure customers points will be key. Your points strategy should incentivize customers enough to choose your restaurant over a competitor.

Customer Purchases: Don’t forget the most valuable action to your business is a customer purchase. So ensure you provide the most number of points when customers are making a purchase. 

Social Media Quests: Stay connected with your customers even when they are not at your restaurant. Give points to those who connect with you on social media, helping you stay in front of them and reminding them to come back to visit your restaurant. Additionally, provide points to any customer who promotes your business through social media, helping increase your reach.

Customer Referrals: Grow your customer base by giving  customers points with every new customer they refer. Millennials love to share, whether it be a selfie or an opinion. They want to look good and sound smart to their peers. Now when your customers have a positive experience at your restaurant, they will be even more encouraged to invite  friends and family to the program.

Rewards Strategy

Your rewards strategy is key to retaining millennials. The points strategy is what originally attracts millennials to join, but the only way they will stay is because of your rewards program. How are you going to reward them for racking up these points?

Discounts: Most customers, whether they are a millennial or baby boomer, love to receive a discount. It could be in the form of a coupon or gift card they are eligible to redeem. Customers love the fact of knowing they will be receiving a certain dollar amount off their next purchase, encouraging return visits.

Personalized Gifts: Don’t forget millennials are expecting a customized experience. This is where tracking all customer purchases and identifying trends kicks in, but it can get confusing as well. How do you know how much each item on your menu is worth in points?

We recommend offering gifts that at least match the dollar per point you are using for how points are earned, if not more. For example, a customer earns five points per dollar. So ensure the value of your gifts matches this conversion, at the minimum. If the veal chop entree costs $35, make sure the minimum point redemption value is 175 points.

Identifying trends doesn’t necessarily require you to be a forensic data analyst. If customers are purchasing products within the same category, such as desserts, add an identifier tag to them for each time they order an item from a specific category.

For example, if Robert qualifies for a personalized gift and he has purchased a different dessert item five times in the past, why not offer Robert a dessert? But to make sure your business interests are also taken into consideration, offer Robert your lowest margin item in exchange for certain number of his points. This personalized touch shows Robert that you are truly paying attention to him and not just offering the standard 10 percent off coupon he can get at another restaurant. But by offering him the lowest margin item, you are keeping your business interests in mind as well. Plus, Robert has no idea what your margins are.

Above all, give your millennial customers the personalized experience they expect. Adapting to the needs of millennials  will you better position your restaurant to succeed in the future.