Restaurant loyalty apps are not the solution to increasing restaurant sales.
It is valid to assume that with a restaurant loyalty program, customers will flock into a restaurant. People love rewards, so you invest in a loyalty program for restaurant customers to keep them returning.
In reality, when not appropriately strategized, restaurant loyalty apps can actually cost a restaurant more without bringing in paying customers to make up for all the investments.
The Big Question: Is It Enough to Reward Restaurant Customer Loyalty?
Restaurant loyalty apps are built using human psychology – that people who are rewarded will come back for more.
Satisfied customers become loyal customers. When customers are loyal to you, they immediately become advocates for you.
They rave about you and invite people to try you out. More people are coming back, and more people are coming in.
You’re determined to create that loyalty program because you can’t wait for people to come to you and become converted!
But here’s the big question: does loyalty really exist in a restaurant space?
If you’re looking for a customer loyalty app for restaurants, here are a few important questions you need to ask:
● Why are we getting a restaurant loyalty app?
● What is the end result that you are looking for? Is it to increase revenue?
● Is it to learn customer behavior? If so why is that behavior important? Do you know how to monetize the customer data if you had all of your customers’ data today? Or is it simply to do it because everybody else is doing it, and you are following the herd?
It’s crucial to ask these questions before setting up your restaurant loyalty apps or loyalty programs to ensure that your customer loyalty programs are in the right direction.
Does Loyalty Really Work in Restaurants?
Perhaps a comparison will answer this rhetorical question more clearly.
Let’s compare airline loyalty to restaurant loyalty.
If a person is flying from the West Coast to the East Coast with four stops in the middle, chances are that person will fly the same airline for every leg of that flight because there is no saturation. However, that very person will not dine in at the same restaurant for breakfast, lunch, and dinner. So, are they not as loyal to the restaurant brand as they are to the airline?
There are so many questions about the implementation of loyalty apps for restaurants.
Traditionally brands have argued that to increase sales and revenue, you need to know your customer and that the only way to do that is to learn customer behavior through the implementation of a restaurant loyalty app.
However, there’s a catch – setting up a customer loyalty app won’t automatically drive customers into your place no matter how attractive your offers are.
Read on to find out how to make customer loyalty apps work for your restaurants.
The Three Important Steps That Make Restaurant Loyalty Apps Successful
Step 1: Implementation of Your Loyalty Apps
The implementation of loyalty apps within the restaurant will not always have the desired outcome one may expect.
Rolling out a loyalty app is not as easy as releasing an app and all of a sudden, you will have a line of people waiting to download the app. In the current environment, many customers are not willing to give an email or download yet another app that they will use maybe once a week in order to get a $5 discount.
Let’s face it, a restaurant loyalty app is nothing more than a digital coupon book, you give me your email, and I will email you a coupon every time we have one available.
The next challenging implementation of a loyalty app is to ensure you get a complete picture of the customers’ data. This means your loyalty app must communicate with your POS, online ordering, customer feedback, and the many other systems within your restaurant, otherwise, the data is incomplete and therefore not actionable.
Step 2: Marketing
The next step is convincing customers to join your loyalty program.
Once a loyalty program has been implemented, the hard work begins. Without proper marketing, your loyalty app will just simply be a flop. Assuming you are Starbucks and you have hundreds of millions of dollars to spend on your loyalty app and you will only just convince about 25% of your customers to join your loyalty program.
If your goal was to learn your customers’ behavior in order to monetize it for profits, you just missed out on 75% of your customers. You do not ignore 75% of your customers who walk into the door simply because they are not loyalty members, so why would you do that digitally and ignore the 75% who are not part of your loyalty app?
Bringing in more people to try your customer loyalty program can give you more insights that can give you cues on what to do to increase more sales.
Step 3: Monetization
Now that you have a mere 25% of your customers data, how will you monetize this information to increase your sales and profit? Are you going to take the traditional approach that every other brand takes by utilizing mass marketing and communicating the same message to every customer?
If you want to have an advantage from your competitors, you can use the data provided by members of your loyalty program to help you make more personalized, segmented marketing.
3 Mistakes to Avoid When Implementing Your Loyalty App
1. Devaluing Your Brand
A loyalty app should not be about discounting, couponing and devaluing your brand. Remember that there is a time and place for everything including coupons and discounts, I think of any of 80 ideas that you would want if you were the customer of your own restaurant. For example if you are a difficult restaurant to get a reservation for, an excellent loyalty app will allow those high spenders to bypass typical Reservation blocks.
2. Mass Marketing
With today’s technology, mass marketing is absolutely unacceptable. As mentioned before, put yourself in the shoes of your customers. If you are a vegetarian and you consistently get meat specials, how long would it be before you unsubscribe and leave that loyalty system?
The idea of implementing a loyalty app is to learn the behavior of your customer and target your messaging with the right content that resonates with the recipient.
3. Ignoring Input from Your Frontline Staff
Another major mistake that brands make, is closely guarding that customer data and they do not put it in the hands of the Frontline workers where it can be used to make an impact on customers’ experience.
A great example is when a brand is aware of a customers peanut allergy but they do not make that information available to the hostess using a waitlist and reservation app
Make the Most Out of Your Loyalty Programs with Milagro
A loyalty app is a small piece of the overall picture in operating the restaurant. Any source of data gathering must be transactional and even more importantly it must be actionable.
Milagro has solved the complex problem of implementing a loyalty app on top of all other systems running within the restaurant to give you a complete overview of your customers while making that data available to those making the decisions.
Get all the insights in the blog post loyalty customers are not so loyal to your restaurant.
