Why Launching A Loyalty Program Increases Restaurant Sales In 2018

Before we dive straight into the matter, let’s preface this article with something worth keeping in mind: selling to an existing customer is a lot easier than selling to a new one. Let’s underscore this statement with a statistic: the probability of reselling to an existing customer nears 60 to 70 percent whereas selling to a new prospect bottom at 5 to 20 percent. In fact, customers who have at one point purchased from you would be 50 percent more willing to try something new and spend 31 percent more relative to new customers. So the question worth broaching is “how do you, as a restaurant owner, keep your customers coming back for seconds, thirds, etc? Understanding the true value of customer service and knowing how to use it to the benefit of your restaurant.

The secret to Amazon’s success

The key to keeping your customers happy, having them return to your establishment instead of the million other available options out there is enhancing customer service. If we’re being totally honest with ourselves, you’re not exactly holding a monopoly in the Food and Beverage industry.  So let’s take a more humbling approach to thrive in this fast-paced, highly competitive environment. Don’t take my word for it; Jeff Bezos, the newly minted richest man in the world, the serial entrepreneur of the biggest e-commerce platform(Amazon) has a thing or two to say about Amazon – appropriately owning up to its moniker as “Earth’s Most Customer-Centric Company: “If you make customers unhappy in the physical world, they might each tell six friends. If you make customers unhappy on the Internet, they can each tell 6,000 friends.” Therefore, it is incumbent upon you – firstly as a restaurant owner; secondly as a business owner in the digital age – to not only recognize the importance of customer service but to make it your priority. With that in mind, what is one tried and tested tool that’ll enhance customer service? The answer: loyalty programs.

Loyalty programs are a fixture of the modern business environment

Loyalty programs, as its name suggests, offers incentives strong enough for a customer to return to your restaurant as opposed to your neighboring competitor – a slight edge beyond what’s already expected(decent food, decent service etc..). If you’re in the business of selling mocha lattes that’ll pass for decent or even amazing, and your competitors within a 5 kilometer radius offers yet similar if not the same array of equally enticing menu items, then one thing that can tilt the scale in your favour is a loyalty program – and by extension, better customer service.

Starbucks is a loyalty program titan of the coffee world

Starbucks, a world renown lifestyle coffeehouse chain, have always taken great pains to fully utilize a loyalty-based system: free coffee order for your birthday; 2 stars per $1 spent, receiving a reward after earning 125 stars; free in-store refill. The scale at which they have managed to attain – global dominance within the coffeehouse sector – speaks to the effectiveness of their signature loyalty program. What applies to a cafe disguised as a lifestyle, customer-focused behemoth applies to your restaurant. What works for them also works for you.

It’s time we flesh out the various reasons why launching a loyalty program can propel your restaurant to new levels.

1. Collect valuable data

It’s become somewhat of a universally acknowledged truth that data and the strategic use of data mining is the new poster boy for the current business landscape. Look no further than Google and Facebook. They’re essentially large-scale data mining companies that collect massive amounts of data for a single unifying purpose: using personalized data(age, name, frequency of visits) to craft strategically targeted marketing campaigns. It allows you to understand who your customers are and how they behave in order to better follow their behavioral patterns.  A customer loyalty program is one viable avenue to collect such data. As luck may have it, 56 percent of customers are open to sharing their data in exchange for better customer service. So you’ll be able to leverage a loyalty program to amass data: name, time of day per visit, the number of times per week, what they ordered, etc. The accumulated data can be mapped out to formulate specific campaigns and products targeted to those specific customers.

2. Elevate customer experience

Did you know that on experiencing poor customer service, 79 percent of customers would flock to their competitors. Exceptional customer support is only a surface level staple that every business should abide by. Going above and beyond the fold, showing your customers that you value their conscious decision to choose you over your competitor is a surefire way to communicate to them that they matter – that you value them, their time, their money spent, and their loyalty. A loyalty program is the perfect medium to communicate just that.

If a customer perceives that what they received out of a transaction was worth more than expected, their perceived value of said transaction becomes that much more glorified. According to persuasion experts, this perceived increase in value – getting more than what they paid for – influences their decision to reciprocate in kind: an instinctive mutual “you do something nice for me, I’ll return the favour” mindset that takes the form of word-of-mouth, return visits, and further purchases.

3. Optimizing brand appreciation/support

Loyalty programs are in many ways a litmus test to tracking and rewarding your most loyal customers. They make up the upper tier of all your customers, the top 20 percent that brings in 80 percent of your total revenue over a long period of time. The more intertwined a customer is and the more exposed they are to with your restaurant, the more likely it is they’ll be driven to promote your brand within their social ecosphere. Returning to an aforementioned quote by Jeff Bezos on the importance of customer service:“If you make customers unhappy in the physical world, they might each tell six friends. If you make customers unhappy on the Internet, they can each tell 6,000 friends. This holds true for the complete opposite as well. If your customer was well satisfied with the service at your restaurant, then they might be inclined to promote your brand to their friends and families through the plethora of social mediums available(Facebook, Twitter).

The known catalyst for shaping customers into brand ambassadors is stellar customer service, the kind where they experienced far more than what was expected from a transaction, the type of exchange where they ordered a pie but instead got said pie with a cherry on top. It isn’t just about getting an additional item so much it’s about how it made them feel appreciated. Even the smallest of gestures go a long way. A personal recommendation from a family member or a friend is 10 times more effective than other advertising vehicles.

Conclusion

At the cost of sounding like a broken record, Amazon Prime, for lack of a better word, is a prime example of what can be expected from a truly dedicated loyalty program, a program that delivers far beyond what is expected and is continually evolving. When it began, free shipping was available at the cost of $99. Now, there is so much more for exactly the same price. For precisely $99, you’d be afforded not only free shipping but also movies, TV shows, photo and video storage, live streaming music and much more. When an establishment far exceeds expectations, its customers will reciprocate in kind.

A loyalty program – a customer service mainstay – can only benefit your restaurant. It makes your customers feel special and appreciative of the minute details you put in(they will take notice of it). Good customer service is the boat that keeps you afloat, the wind that propels you forward and it starts with data.

 

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