Customer retention is easier than customer acquisition. In other words, going after new guests is harder than retaining your loyal ones. Keeping customers happy and coming back for more is the ultimate goal.
The secret sauce? Restaurant customer loyalty programs.
We’ll talk all about it in this article: from retention strategies to real life examples. Your restaurant will be flooded with repeat customers! While you’re at it, try a booking management system. It’ll make your life easier.
Alright, let’s roll!
What are customer loyalty programs?
A restaurant customer loyalty program 🍽️💳 is a system where diners earn points or rewards for regularly eating at the same restaurant or chain. These rewards can include free meals, discounts, or special offers, designed to encourage repeat visits and increase customer loyalty ❤️.
Imagine a world in which customers keep coming back to your restaurant, not because they have to, but because they genuinely want to. That’s what customer loyalty programs are all about. They are a marketing strategy meant to retain guests for the long-haul.
According to Harvard Business Review, acquiring new customers can cost anywhere between 5 and 25 times more than simply retaining existing ones. It’s way more cost-effective! So how do we make our customers come back for seconds, thirds, and beyond?
Let’s see together the types of customer loyalty programs your restaurant can start using today.
Types of customer loyalty programs
There are several different types of customer loyalty programs and they all depend on your goals, business model and location. Also take into consideration your restaurant’s target audience and type of cuisine. These factors all matter when choosing what’s best for your business.
Here are some types of customer loyalty programs:
- ✨ Points-based system
- 📈 Tiered loyalty program
- 👊 Stamps-based cards
- 🛂 Membership programs
- 💸 Discount offers
- 🎁 Freebies and gifts
- 🎉 Special promotions
- 🎂 Birthday deals
- 🎮 Gamification
- 🤝 Referral programs
✨ Points-based loyalty program
How it works:
Customers earn points based on how much they spend at your restaurant, unlocking a free meal, a drink, or a dessert.
💡 Example: In the US, Starbucks’ stars can be exchanged for drinks. More stars equal more expensive drinks:
- 25 stars = customizable drink
- 100 stars = Brewed hot or iced coffee or tea, bakery item, packaged snack
- 200 stars = handcrafted drink
- 300 stars = Sandwich, protein box or at-home coffee
- 400 stars = Starbucks merchandise up to $20
Starbucks grants twice the starts to customers who pay with it instead of cash or debit/credit card. This means that instead of the usual $1 = 1 star, $1 = 2 stars. This way, the coffee franchise promotes their own app and customers gain stars faster. Win-win.
📈Tiered based loyalty program
How it works
You establish a set of tiers with different rewards and benefits. Customers progress through them based on their spending levels or loyalty. You can have bronze, silver and gold tiers, or tailor the names to your restaurant’s concept.
💡 Example: Chick-fil-a tiered customer loyalty program is divided into 4 tiers:
- Member
- Silver member
- Red member
- Signature member
With each tier, customers earn more points, receive different benefits, such as birthday rewards, the latest news and insider information, or even backstage tours to their location’s office. Pretty cool, right?
👊 Stamps-based cards loyalty program
How it works
Each customer gets a physical or digital card which gets stamped or marked with every purchase. After a certain number of purchases, they receive a free item, gift or meal!
💡 Example: Domino’s digital punch card offers 10 points for each order. After 6 orders, customers get a free pizza! Of course, you don’t have to add points to the mix. If you offer standard meals, you can count meals instead of points and give the 10th one for free.
🛂 Membership loyalty program
How it works
Customers subscribe to a monthly or yearly membership and enjoy a special set of exclusive benefits at your establishment. Benefits can include privileged bookings for events, special discounts, or an exclusive meal, just for your prized members.
💡Example: Gordon Ramsay’s restaurants offer networking opportunities, a special 20% discount and exclusive rates for private events. Memberships are especially useful in B2B contexts as companies think of their budget, needs and quality of service.
If your clients are mostly businesses, perhaps memberships can help your own establishment grow with a steady customer base.
💸 Discount offers loyalty program
How it works
Discount offers are very straightforward. Customers receive discounts on their total bill, encouraging repeat visits. According to this study, it’s one of the loyalty programs that customers look for the most.
💡Example: Restaurants with an AARP (American Association for Retired Persons) partnership offer discounts from 10% to 25% off their meals. Papa John’s, Denny’s and Outback Steak House are just a few examples of restaurants with these offers.
Look for a local or national NGO with similar partnerships to attract repeat (and new) customers. Not only that, but your restaurant will also show its commitment to its community, helping it thrive.
🎁 Freebies and gifts loyalty program
How it works
Who doesn’t love free stuff? Who doesn’t love gifts? With these unique offers, your customers will feel appreciated and valued. Merchandise, complimentary items or exclusive samples are all part of this strategy. Merchandise also means free marketing!
💡Example: Chipotle’s members have access to their line of merchandise which includes bags, caps and much more. Upon signing up, customers also get free guac. Yum!
🎉 Special promotions loyalty program
How it works
Are dead times slowly killing your restaurant? Then perhaps a🍹happy hour can do the trick. Customers come in at a designated time and are greeted with a special offer. Bring life to your restaurant and get the most out of dead times.
Think of holiday specials too. Who doesn’t love some seasonal exclusive deals? Think of an autumn-inspired menu, or a cozy winter drink. Don’t forget a refreshing summer dessert and a fortune cookie on New Year’s.
Check your local laws as happy hour is banned in certain US States and the UK when it comes to alcoholic beverages. The ban was set in place to disincentivize heavy cheap drinking, but it doesn’t mean “happy hour” as a concept is overruled.
💡Example: Take the Italian Aperitivo as inspiration. A time after work to unwind and relax with friends at a local café or bar. Much more than drinks, you can have peanuts, olives, pastries and potato chips. The bolder restaurants serve customers with local cheeses, miniature pizzas, puff pastries and different types of bread – only on specific times.
🎂 Birthday deals loyalty program
How it works
Your customers register at your restaurant on your customer program. At this subscription, you ask for their birthday. When that day arrives, offer a drink, a small meal, an appetizer or a discount card on any menu offer. Combine these with your restaurant’s email marketing campaign and you have yourself a winner!
💡Example: Upon signing up to Ben & Jerry’s email list, they ask for your birthday and promise to give you a “a cone-gratulatory surprise”. This strategy adds new leads to the franchise’s email list and customers receive special promotions and offers as well as the latest news.
🎮 Gamification loyalty program
How it works
Incorporate games, challenges and contests into your customer loyalty program to make it more engaging. They’ll be hooked and coming back for more.
💡Example: McDonald’s partnered with Hasbro and together they created the famous McDonald’s Monopoly-based promotion. This campaign has been going on and off for 30 years now. It is very simple: customers bought food at McDonald’s and gained game pieces. These game pieces could have discounts on menus, cash prizes or even cars!
Of course, the odds of winning are low, but the campaign is always a success! According to Forbes, every time the campaign runs, “it increases McDonald’s sales 1% to 6% at their stores.”
🤝 Referral loyalty programs
How it works
Referral programs are great if you want to acquire new customers and retain existing ones. Encourage your current guests to refer your establishment to colleagues, friends and family in exchange for a prize: a free drink or a discount.
💡Example: Shakeshack’s referral program spices things up with a free burger when a customer refers a friend on the app. It’s usually a limited time offer, which leverages customers’ FOMO.
This strategy kills two birds with one stone. It brings new customers into their establishments and into their app. All customers drift down the marketing funnel.
Choosing the right program for your restaurant
As with everything, the programs you set in place in your restaurant will vary depending on:
- The experience you offer – fast-food isn’t the same as casual dining
- Your customers – gen Z might prefer apps and a gamified experience, while older generations might adhere more to a traditional program
- Your objectives – upselling isn’t the same as managing dead times
It is no easy task though, because your customers’ desires clash against best management’s practices. In fact, customers seem to prefer immediate rewards over postponed higher rewards.The latter is, of course, in your restaurant’s best interest to make sure your customers keep returning.
You’ll need to strike a balance between both keeping your customers and your wallet happy.
Above all, remember that providing a valuable service is the best strategy to bring your guests back. Focus on your restaurant’s unique selling point, offer the best experience possible and be friendly.
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