Operators find well-designed loyalty programs help to shape consumer behavior, return business.
Loyal customers are bread and butter for restaurants. They generate repeat visits and spread word-of-mouth advertising. Building a strong loyalty program is a key marketing strategy for operators who use a variety of methods to track and reward customers — from email clubs to mobile apps.
“Our [best] loyalty customers come in three times a month, minimum,” says Scott Goodrich, chief operating officer of Uncle Maddio’s Pizza. “Of our stores that have been open for two years or more, 50 percent is done by the loyalty customer.”
The better loyalty programs help operators identify their customers and measure frequency, buying patterns and spending, says restaurant consultant Dennis Lombardi.
“To get the maximum value out of one of these programs, it really has to be managed,” Lombardi says. “Somebody should be significantly involved in managing it and looking at data to convert into action steps.”
Here’s how some restaurant operators are driving traffic with customer loyalty programs:
Make it add up
A strong customer loyalty program will encourage more visits — thereby increasing transaction — but also will boost check averages, says Patrick Virana, vice president of marketing for the Atlanta Bread Company, the Smyrna, Ga.-based franchisor of 35 bakery cafés.
Atlanta Bread is launching a new customer loyalty program that allows patrons to accrue a point for every dollar they spend, whether on sandwiches, salads, paninis, coffee or bagels. Once they accumulate enough points, they can exchange those points for different items. For example, 50 points for a cookie, 100 points for a soup, 150 points for a half-and-half deal, such a soup and salad or salad and sandwich. The more a customer purchases, the more points they accrue.
“Rise Rewards provides an incentive for customers to visit their store more frequently and potentially increase check size upon each visit,” Virana says.
Rise Rewards tracks customers with just their phone number, and the system is incorporated in the store point-of-sales systems.
“The key for our operators is that the franchisor can then provide a managed service to the franchisees that is integrated with our additional marketing efforts,” Virana says. “The pitfalls of such [customer loyalty] programs typically revolve around the provider not utilizing the data to its fullest or providing a program that is too weak and devaluing the relationship with the customer.”
Make it easy to understand
Uncle Maddio’s Pizza, Atlanta-based fast-casual pizza concept with 41 units in 13 states
“The most important thing is for a loyalty program to be easy to see and understand,” Goodrich says.
To make it easy, Uncle Maddio’s Pizza uses a cloud-based information system in conjunction with its point-of-sales system to track customers in its loyalty program. Customers need only give their telephone number to the cashier to earn points toward a free entrée.
The program is marketed as being as easy as “1-2-3.” Patrons visit the Uncle Maddio’s Pizza website, click on the “rewards” link and register for the program. Then they receive a free entrée after purchasing 10 meals.
The loyalty program has been growing by 10 percent per month this year, Goodrich says.
Present different reward options
E & O Kitchen and Bar - Upscale casual-dining restaurant in San Francisco
Customers who join the loyalty program accrue points with the swipe of a loyalty card. Points are redeemed at different levels for such rewards as a free appetizer, free drinks and gift cards.
“The program has been around for the last six or seven years,” says general manager Akop Paronyan. “We have a very loyal following, but having that card still serves as an enticement for customers to come back in.”
Know your customer
Rusty Bucket Restaurant Group - Columbus, Ohio casual-dining chain with 23 locations in five states
Some of the Rusty Bucket’s most loyal customers are bookworms under the age of 10. The casual-dining concept launched its Bucketeer Bookworms reading program a few years ago, offering a free kid’s meal to children who read at least five books. Servers hand out bookmarks to interested children. The bookmarks also are available at local libraries and partnering elementary schools. Parents write the names of competed books on the back of the bookmarks. Families bring them in for the free meal when the bookmark is completed.
Rusty Bucket averages 395 redemptions per week, approximately 2.3 redemptions per store each day.
“It’s become a staple for us,” says Gary Callicoat, chief executive and chain founder. “It drives parents to bring their kids in, and kids want to come. And it’s a way to give back to the community and help the cause of literacy.”
Keep it relevant
Gyroville, Fort Lauderdale, Fla.-based fast-casual concept with eight outlets
Gyroville locations passed out some 10,000 scratch-off coupons in summer 2016 that were redeemable after National Gyro Day on Sept. 1. Within a month, more than half of the coupons had been redeemed as customers came in and scratched off the mark on the coupons to win such prizes as free drinks, a free combo-meal and $1 and $2 discounts.
The program was so successful in generating customer loyalty Gyroville plans to do the scratch-off again this September, and also promote old-school punch cards that offer a free entrée after eight visits, says chief operating officer David Kurlander.
“We’re told loyalty programs have to be digital, on a smart phone, that no one wants to carry anything,” Kurlander says. “But that’s not true.”
Make it rewarding
Wing Zone, Atlanta-based chain with more than 100 locations across the country
Online ordering has more than doubled since Wing Zone launched an online customer loyalty program a few years ago, says Dan Corrigan, director of marketing for the fast-casual concept.
The program awards customers points for the amount they spend. For every $10 order patrons receive one point, and after they accumulate five points they receive $5 off an order. Customers also can opt to continue to accrue points for greater prizes, such as glasses, coolers with built-in speakers or tailgating chairs.
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