Article contributed by TouchBistro
In the current economic landscape of steep inflation, consumers are largely pulling back on restaurant spending. However, there is an exception to this trend: loyalty program members. Not only are loyalty program members insular to the macroeconomic landscape, but power users of loyalty programs are the most resilient when it comes to price increases.
The good news is, loyalty membership is on the rise according to Paytronix’s 2023 Loyalty Report. Implement these strategies to capitalize on customer loyalty and build a customer base of power users.
What Defines a Loyalty Power User?
Loyalty power users are the most active and highest spending restaurant loyalty program members. According to Paytronix, half of all loyalty visits come from the most active 10% of loyalty members.
Even more impressive, these power users make up 44% of visits to and 50% of spending at quick-service restaurants (QSRs). They also make up 44% of visits to and 48% of spending at full-service restaurants (FSRs). Moreover, power loyalty users spend 33% more per visit at restaurants than other loyalty members.
With loyalty members already outspending non-loyalty members by approximately 5% month after month, power users are spending significantly more. In other words: power loyalty users make the biggest impact on your business and your bottom line.
How to Build an Audience of Loyalty Power Users
Take advantage of restaurant reward program memberships to create more power users and maximize revenue, with these tips inspired by the most successful restaurant brands.
1. Adopt a Digital Loyalty Program
The first step to boosting customer engagement and loyalty is creating a program that’s highly accessible. Having a digital loyalty program, therefore, is non-negotiable.
Punch cards are a relic of the past. They don’t give your restaurant a way to collect customer data. Plus, customers tend to forget them at home, which creates paper waste and doesn’t do much to incentivize repeat visits.
Consider creating a customer web app for your loyalty program to help members easily track and redeem their rewards without downloading an app. A web app isn’t just convenient for customers; it also lets your restaurant collect customer data, which you can use to fuel your marketing efforts.
Take inspiration from the Starbucks Rewards app, a hub from which members can add payment info, place orders, and track rewards, all from the convenience of their phones.
2. Up the Stakes
Customers expect more than just birthday rewards for their loyalty. Gamify and incentivize loyalty engagement and spending by offering bigger and bigger rewards members can work towards – like exclusive opportunities and secret menus – to ensure you’re consistently offering more value for more loyalty.
Subway’s MVP Rewards program, for example, uses a tiered gamification technique to incentivize loyalty engagement. As customers spend more and advance from Pros to Captains to All-Stars, they earn more points per dollar spent, bonus points on certain days, free chips with purchase, and access to exclusive merchandise.
If your restaurant has multiple locations like Subway does, use rewards to encourage customers to branch out beyond their go-to location. You could create a special loyalty tier for customers who regularly visit more than one location. This incentive could encourage customers to make a habit out of visiting the location that’s not only closest to their office, for example, but also the one closest to their home, kids’ school, and gym.
3. Tailor Your Offers to Different Generations
Paytronix’s 2023 report found that the average QSR loyalty member is between 36 and 45 years old, while the average FSR loyalty member is between the ages of 36 and 55. Because you’ll have members of various ages in your program, it’s important to create one that’s customized to different generations’ spending habits.
For example, members with more mouths to feed at home will probably be enticed by a buy-one-get-one offer that offers more bang for their buck, while younger members will probably enjoy access to secret menu items that they can brag about on social media.
Data collection is key to driving customer engagement and ensuring long-term loyalty. The more you know about your loyalty members, the better you can target them with relevant offers.
Take inspiration from My Chili’s Rewards which offers personalized rewards, ranging from free kids meals to appetizers and desserts. A member with children will likely receive free kids meals as an incentive, while members with other demographics will be more likely to receive different rewards.
4. Leverage Data to Optimize
Your customer relationship management (CRM) system collects and stores data about your customers, making it one of your most valuable assets. Leverage your CRM’s data to make adjustments to your program and increase loyalty engagement.
Paytronix found that QSR loyalty members are more habitual, frequent daytime and weekday restaurant visitors, while FSR loyalty members tend to spend more at the end of the week and in the evenings. Insights like these can help you optimize your program to target those power users when they’re most active.
Dunkin’ Rewards, for example, offers 100 bonus points to members who order ahead via their app on Wednesdays. This data-inspired QSR reward incentivizes habitual visits on weekdays.
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As prices rise and consumer restaurant spending ebbs and flows, loyalty power users are critical to maintaining and boosting revenue. Look for a digital loyalty platform that lets you design a program with tiers, personalized rewards, and subscriptions.
Learn the latest technology information and trends on loyalty at https://www.touchbistro.com/loyalty/
