Food & Beverage

What you need to know about restaurant loyalty cards

Thursday, March 8, 2018

Customer loyalty is worth its weight in gold. Not only do loyal customers keep your books ticking over during the quiet times but they are also highly effective brand ambassadors and provide a foundation on which to optimise marketing efforts.

Setting up loyalty cards

When you start looking at how to create a loyalty cards scheme for your restaurant there are some important factors to take into account:

Simplicity – if it takes a maths boffin to follow your formula to calculate the actual benefit then the appeal of the scheme will be limited. Keep it simple and make the reward easy to calculate.

Your customers’ values – what do your customers value and what is their sense of worth? Grow your loyalty scheme around offers and opportunities that mean something to your customers.

Motivation – for loyalty schemes to work, customers need to feel motivated to take part, so make sure the rewards match the customers e.g. if you’re targeting families then free tequila shots all around for Level 1 rewards probably won’t motivate many!

Tie the rewards to your business – there are two elements to this: firstly, offer rewards that reflect your brand values and tie in with the restaurant themes. Secondly, be smart and use the rewards to boost any parts of your business that are suffering. For example, if no one is eating desserts, offer double points on pudding purchases. Do not reward people for things they are already doing - reward for behaviour change.

The different options available

You can structure a loyalty card system in a way that works for your business using a combination of some, or all, of these proven-to-work scheme structures:
• A points system – customers accumulate points and get a discount or a freebie as a result.
• A tiered system – small rewards for being part of the loyalty programme and then a sliding scale of increasing benefits for the more purchases made.
• VIP benefits – charging an upfront fee for access to value-adding VIP benefits, e.g. priority booking, champagne for birthday celebrations.
• Games and contests – adding a competition or game element to your loyalty card system can make it engaging and fun and more appealing than your competitors’ offerings.

Why loyalty cards offer more than discounts and coupons

If you’re trying to decide between discounts and loyalty cards you might want to consider this:

• Repeated discounting can devalue your business. Brands such as Apple, for example, never do discounts and their reputation benefits from it.
• Discounts can be difficult to support in a business where the margins are already very small.
• Discounting can bring customers through the door but often only once – loyalty schemes create customers loyal to the restaurant, not the discount.
• There is evidence that loyalty cards work and provide positive results. Whitbread UK, for example, has shown their loyalty programme brought a +1.5% growth year on year and grew covers up to +6% year on year with those restaurants who had over 50% reward club members.

Take a look how to price up your menu without upsetting your regular customers.

Increasing the prices on your menu is all part of running a successful restaurant. Whether you’ve realised some dishes are just not profitable, or you’re reacting to an increase in the cost of produce, sometimes it’s necessary to increase prices. If you have regulars, you can guarantee that they will notice if their carefully budgeted dining out experience suddenly goes up in price. So, how do you adjust the prices on your menu upwards without upsetting those who regularly support your business?

Sweeten the deal

You can decrease the sting of paying more – and increase your chances of keeping your customers – by adding a little sweetener at the same time. Perhaps your prices are going up across the board but you’re introducing a new loyalty scheme for regulars. Maybe there are discounts or coupons for certain combinations of dishes. If you introduce a treat at the same time as the price increase it should have less impact.

Add more mid-priced dishes

If you’re increasing all the prices on your menu then add more dishes at the affordable end so that customers who don’t want to pay top dollar still have plenty to choose from.

Consider reducing dish sizes instead

If you’re already serving minimal haute cuisine this might not work; but if your portions are a pretty decent size you could consider reducing them, rather than raising the price. With fewer ingredients used per dish, you’ll make savings. The other alternative is to swap out more expensive ingredients in a dish for cheaper, seasonal ones.

Grow your customer base

If all else fails and your regulars are not coming back then you may need to look to grow into a new customer base. Create a new marketing strategy targeting a slightly wealthier demographic in your area – to them you may represent great value even with the price increases, so you could establish a whole new customer base that way.