6 Areas Where Most Restaurant Loyalty Programs Fall Flat

Posted on November 21st, 2017 by Breck Hapner

Loyalty programs are an increasingly popular means of maintaining and improving customer loyalty and satisfaction while also increasing restaurant sales. Many large chains have experienced a great deal of success with their loyalty programs and keep their customers coming in not only week after week, but even day after day.

An effective loyalty program requires a seemingly magic combination of knowing your customers and what they want and then offering rewards that are enticing but that will ultimately help you turn a profit – not leave you in the red. If your loyalty program doesn’t seem to be working, take a look at the six areas you should consider examining.

1. Not Offering Truly Enticing Features And Rewards

Your loyalty & rewards integration program should set your restaurant apart and encourage customers to choose you over your competitors. And if the features and rewards of your loyalty program aren’t truly enticing, they simply aren’t going to choose you. Your program should be display well-designed user experience (UX) development through your web design, web development, mobile app development, and self-service kiosks.

Loyalty cards can be effective but are easy to lose and forget about. The rewards you offer should be clear and standardized – for example, earning a specific item or credit for every specified number of items purchased or dollars spent. Rewards can also be offered randomly, but there should also be a structured reward system in place.

2. Targeting The Wrong Demographic

Technology services for restaurants can help with customer demographics which vary by a restaurant’s location, cuisine, price point and other factors. But it behooves nearly all restaurants to do what they can do appeal to millennials, as they comprise the generation that is most likely to go out to eat, order delivery or order in. In particular, integrating a loyalty program into your mobile application will help your business appeal to millennials – and their wallets.

3. Delaying Gratification

For better or worse, we live during an age of immediate gratification. Almost any question you have can be answered with a quick Google search. You can summon a driver to take you to the airport in less than 90 seconds. You can even tap on your phone a few times and have your groceries delivered to your door in a matter of hours. So if your restaurant reward program doesn’t include delivery integration rewards on a fairly frequent basis, it isn’t likely to succeed.

Customers don’t want to have to buy 20 sandwiches to earn a free cookie. They want something more tangibly and immediate. But that doesn’t have to mean lost profits for you. On the contrary, offering consistent rewards – such as a specified discount on a certain day of the week or a free beverage after every five purchased – can lead to increased sales and customer loyalty. 

4. Being Impersonal (Birthdays, Private Events, Reservations)

Some of the most successful restaurant loyalty programs are used as tools to engage with customers on a more personal level. Birthday and anniversary rewards are two of the most popular methods for connecting with customers. They might also enjoy receiving early access to special promotions or events. Making them feel like they’re in your inner circle is one of the best ways to foster customer loyalty.

5. Failing To Encourage Spending

As a business owner, the end goal of offering a loyalty program should be increased sales. The trick is to find a balance between offering rewards and discounts while also encouraging customer spending. Determining what you can and should offer through your loyalty program requires research into both your financial standing as well as what customers find appealing. Run the numbers and make sure that you can afford the rewards you plan to offer, and then make sure that your loyalty program will encourage repeat customers and increased spending.

6. Failing To Gather Customer Insights

A loyalty program is unlikely to be successful if you don’t listen to your customers. Check in with them from time to time – either during in-person visits or through a survey on your website or push notifications on your mobile app – and ask them what they like most and least about your program. Are there specific rewards they would like to see you roll out? Are they satisfied and likely continue to using your loyalty program? It won’t be successful unless your customers are actually using it, and you can track through dashboards and business intelligence for restaurants.

Building A Loyalty Program Into Your Restaurant’s Digital Experience

Whether you have an existing loyalty program or are interested in launching one, DineEngine® can help you integrate it into your restaurant’s digital experience. A few reputable loyalty & rewards vendors are Fishbowl, Paytronix, and Punchh. We pride ourselves on listening to customers when executing a restaurant owner’s vision. Tell us about your goals and we’ll help you make them a reality.