It’s one thing to attract new customers, but smart operators know it’s even more important to keep them. In addition to providing the basics of food, service, and ambiance—and doing it again the next day, and the day after—building loyalty through formal and informal recognition programs is key.
According to the 2015 COLLOQUY Loyalty Census, U.S. consumers are more invested in loyalty programs than ever, holding a total of 3.3 billion memberships spread among the retail, financial services, travel and various other economic sectors, or about 29 per household. The real statistic of interest, however, is the fact that users are only active in a dozen of them.
Most restaurants have some form of a loyalty program, from punch cards or membership cards, to iPad scan systems to vouchers. Restaurant loyalty program memberships rose 107% to 55 million in 2015, although that’s down from 171% growth in 2013.
Digital makes the difference, especially the mobile kind. The technology has allowed restaurants to build loyalty programs through different tiers, from traditional loyalty cards, to mobile apps and location-based services. This omni-channel approach allows brands to increase the amount of information they can collect about their guests, which in turn allows them to provide repeat customers with a more personalized experience.
Even the availability of digital serves to build loyalty among fans, even if there isn’t a rewards component.
Always at the forefront of just about any trend you’d want to examine, from game-changing new menu items to marketing, Taco Bell has been extremely aggressive about mobile, all of it designed around the current-generation premise that “ease is the new loyalty.” Last year, the Live Mas app began allowing users to customize, order and pay from their phones—an industry first—and has reportedly been downloaded almost 4 million times. In the process, the chain discovered that customers who use it tend to order about 20% more than those who order in person. A gamified loyalty component is planned for later this year, via an app update. There’s even a Taco Bell emoji. Now a new website, ta.co (“ta-dot-co”), expands that capability to desktop computers and tables; a publishing channel called The Feed features curated content about the brand. It’s all Taco Bell, all the time for the chain’s many loyal followers.
Not surprisingly, many quick-service and fast-casual chains are using apps to build followings, usually through ordering and payment capabilities. The new wrinkle, however, is integrating rewards and other bonuses. Panera’s app taps into the success of its longstanding rewards program. The My Starbucks program, which has more than 10 million members, is now linked to a mobile application that allows the user to pay in stores with their smartphone or a pre-loaded card. LYFE Kitchen’s new app tracks purchases and confers rewards.
But while digital marketing may have forever changed the mechanics of tracking guest behavior and managing loyalty programs (especially in multi-unit operations that target younger, wired-in diners), it’s crucial to remember that nothing will ever replace the personal, human touch.
This is especially true for independent and upscale restaurants, and even more so for established places where the competition of newer openings represent a particular draw for customers.
Case in point: The Angus Barn, in Raleigh, NC, which has been a paragon of hospitality—not to mention top-quality steaks—since it was opened in 1960 by Thad Eure Jr. and Charles Winston. Now under the direction of Thad’s daughter Van, the restaurant has kept up with the times and added event space, music in the lounge, a Chef’s Table and more contemporary menu items, but the core appreciation of customers has never changed. Regulars in the Wild Turkey Lounge have their names engraved on plaques above the bar, kids can come into the kitchen to help build their own ice cream desserts, and servers have business cards so that guests can ask for them by name. As Van puts it, “We’re in the business of making memories.” No wonder so many guests are also second-generation.