How To Create A Customer Loyalty Program That Works, Increases Revenues And Keeps You In Business


I’m going to share with you how to create a unique and kickass customer loyalty program that’s simple enough for your customer to remember to choose you when they’re deciding to dine out.

But before I do that, I need you to understand that

Gone are the days when your customer was loyal to you; today, you need to be loyal to your customer’s needs.

Loyal customers amount to 40% to 50% of the customer base for most restaurants.

But in a recent study, Deloitte, one of the worlds biggest consulting firms reported that that number is dropping very fast. (That’s not good)

On the other hand, according to QSR magazine, just a 5% increase in customer retention can produce as much as a 100 % increase in annual profit. (That’s a lot more money in your pocket)

So what’s the best way to retain your customers?

Offering F&B discounts just doesn’t cut it anymore. Today’s customers have evolved, and the option to switch to your competition is easier than ever.

A Customer loyalty program that actually works at getting your customers back, again and again, is the most cost-effective way to increase revenues.

But many loyalty programs don’t really work in enticing your customer to choose you when they’re hungry or thirsty. In fact, today, as a customer, I’m part of 10 or more food and drink loyalty programs.

So how do you create a loyalty program that trumps them all, one that your customer will choose to use first when he/she decides to eat or drink outside their house?

You need to

  • Design a loyalty program that’s relevant to the needs of your customer and add value to their experience.
  • And you gotta make it easy for them. It needs to be ‘Low effort and high delight’. They need to make less of an effort to get more of a delight using your program because when earning rewards takes effort, many of your customers will ultimately stop trying.

Let me show you how.

1. Your Top Priority: Collecting and Analyzing Relevant Data

Collect relevant data from your store, online and from your associate partners, and leverage that information to customize offers for your customers.

Doing this is one of the most powerful steps to getting your existing customers to come back and spend more often with you.

Most restaurateurs know they need to collect data; The real challenge lies in gathering factual, relevant, and appropriate data.

Solution: Remember to be data savvy. Don’t get overwhelmed with the quantity of data.

Instead, understand the goal of the loyalty program first and decide to focus on the next 90 days only and then use the data accordingly. It’ll become easier to monitor your efforts and achieve results.

2. Get Clear About What Makes You Special

Take a note from the Bible – ‘Ask and it will be given to you’.

Ask your customers what do they really want, desire and value?
Why do those who currently come back often, keep coming back often?

Walmart understood this. They know their customer wants the lowest price on items from food to shoes. In their business, the low price component is THE main focus of every decision they make. Think about it. When you’re looking for something at a low price, who comes to mind? Walmart. They are very clear what their customer wants and will keep coming back for.

Once you know what your customer really wants, you just keep giving it to them in ways they like. This is where you can be really creative and out-do the other loyalty programs out there.

3. Get Your Employees Involved By Selling Them The Loyalty Program First

It’s your job to get your restaurant employees engaged in educating your customers.

A loyalty program without your employees supporting it is an empty promise. Get your employees involved. Spell it out for them, show how data collection and other loyalty mechanisms help your business.

If they see the benefit of the program and how it benefits them, they’ll become fans and push it themselves.

Don’t ignore this step. Train them well, so they can make it a success.

Tip! On getting employees engaged to promote your program: It’s a good idea to create loyalty cards for your employees explaining the program so they don’t forget how to explain the program and its benefits to your customers. And get your employees to constantly remind your customers of the loyalty program. It will increase the likelihood of your customers actually redeeming your offers.

4. Inside Out, Outside In Method

The Inside Out/Outside In approach syncs your online, offline, and social media efforts into one cohesive effort.

Inside Out: Collect data in-house by leveraging everything starting with the restaurant table reservation lists. This will allow you to gain insights into your customer’s likes and desires.

You can then improve the experience to both add value for existing loyal patrons and discover different segments of your market to target as “loyalty niches.”

As per, diners say that complimentary extras (69 %) and seating preferences (65 %) would go far in increasing customer loyalty.

Outside In: Get out there and engage with your customers and prospects. An active social media presence, for example, can allow you to turn current loyal customers into unofficial (or official) brand ambassadors, spreading positive online word-of-mouth about your establishment.

Tip! on increasing revenues: A recent survey by Rosetta Consulting found that engaged customers are 5 times more likely to buy only from the same brand in the future.

5. Focus on Customized Experiential Loyalty Programs

One-size-fits-all loyalty offers are passé.

What’s the point of only having one price for a Sunday brunch when not all your customers are looking for such a discount? Not to mention this type of scattergun approach will lead to losing out on the additional revenue you could earn from those customers who are happily willing to pay full price for a’la carte but land up paying much less. (why would you want that? :))

Tip to bring your customers back that may not have come otherwise: Create experiential loyalty programs that are relevant and add value. A recent survey by Epsilon, a global research company states that 80% of customers are more likely to return if the business offers them personalized experiences.

6. Find Out What’s Working (And What Isn’t)

Your loyalty program should exist in a state of constant evolution.

Testing and tracking are imperative for getting an existing customer to buy more often, increasing redemption rates, poaching other companies’ customers, and raising profits.

Recording retention rates or churn rates isn’t enough. What if you tracked customer cash flows ($ spend per loyal customer), the lifetime value of each customer, net promoter and net promoter value scores, and network values of loyal customers? Do you think that data might hold valuable lessons?

Of course, it does.

Giving yourself the power to use relevant information for business decisions is like turning on the light in a dark room.

Remember! tracking the data and not using it is a waste of time, so be strategic

7. Be Sure to Let People Tell You How You’re Doing

A two-way communication between you and your customer is an invaluable dynamic for engaging with your customers.

Don’t make it inconvenient or cumbersome for them.

Make it easy for them to email you, call a toll-free number, or send an SMS letting you know their thoughts, leave you customer complaints, as well as expressions of gratitude because these are highly representative of how well you are doing at winning your market over.

Tip! Old fashioned customer feedback cards at the end of their meal are a great way to get them to start talking to you. If you want to know how I used them to eliminate my customers biggest complaints, increase customer loyalty and increase my revenues by 296% in under 3 years. Check it out here: An Easy Technique To Keep Your Customers Coming Back

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