The National Restaurant Association’s 2012 National Household Survey suggests that restaurateurs generally find maintaining loyalty is a difficult task with a majority of restaurants. It is reported that it would was more challenging in 2012 than in 2011. The good news: Chicago-based foodservice consulting firm Technomic, Inc. reported this year that nearly 80 percent of customers would join a loyalty program if it was offered at the restaurants for which they frequently visit.

1. Benefits of an effective
loyalty marketing program
How restaurants and customers benefit - Rick Zambrano

2. What is loyalty marketing for restaurants?
A Loyalty Marketing program is a set of business activities
dedicated to identifying and rewarding loyal customers and
also creating new regular customers. It’s a discipline centered
around existing customers.
Increasing frequency of visits and check averages (and thus
sales) are the main benefits of such a program and can lead
to incredible ROI.
Although loyalty marketing is much broader, for our purposes
we’ll use it in the context of a frequent diner program
identifying loyal customers through cards, apps, or some
personal identifier, such as a phone number.

3. Overall benefits and goals
● Increase visits
● Increase transactions amounts (tickets)
● Reward and identify most loyal customers
● Develop direct customer contact list
● Create an improved experience for guests
● Improve intelligence around offers
● Other benefits tailored to your restaurant

4. Increase visits
The case for loyalty starts here with increased visits and developing a return
on investment (ROI):
● Loyalty is about growing frequency and bringing some differentiation to a
restaurant
● Eighty percent of customers say they would sign up for a loyalty program if
offered at the restaurant they most frequently visit**
● Doubling visits by just 10 percent of customers can have a significant
impact on profitability:
○ What if a restaurant takes in $2M per year, then for simplicity if 10
percent of customers represent $200K, one could double the # of
visits and spend, then that eatery would take in an additional $200K in
sales. The beauty of those sales is that they are more profitable than
the first $200K and could result in as much as $80K in additional profit
to the restaurant.
** According to foodservice and research firm Technomic, Inc.

5. Increase ticket amount (avg. check)
Whether you as a restaurateur uses plastic cards, apps, phone
numbers or key tags, the next goal should be the same: to raise
the amount of spend.
This benefit requires more effort but is very much attainable.
Ways to increase spend per visit (average check):
● Based on personal preference, customers can be enticed to
“upgrade” favorite products with targeted incentives
● Rewards for reaching certain dollar amount or point-total of spend,
induces additional purchasing per visit
● Customers can be rewarded higher % of free product or “dollar-
offs” with higher level of spending, e.g. $5 for $25 spent vs. $10 off
$35 spent (20% vs. 29% reward).

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Who are your most loyal customers?
Loyalty marketing
● Provides additional “perk” to
customers
● Creates a differentiator between
you and the “shop down the
street”
● Tracks your most loyal
customers & provides additional
ways to make them feel like VIPs
● Helps create a new channel for
identifying potential “brand
ambassadors” and ultra-loyal
customers

7. Building a direct connection to customers -
the email tie
Customers who register provide their email address, so this
allows you to
Create newsletters to inform customers of weekly specials
and tell the story of your food
Send special event announcements
Announce rollouts
Invite to your social media channels

8. Building a direct connection to customers -
the email tie
Having emails also allows you to create special events
around VIPs (loyal customer/loyalty members).
Also let VIPs know first about special promotions,
discount codes, menu items and offers.
Also let VIPs help create product names and suggest new
menu items or limited-time offers.

9. A differentiated experience
● Much like the way that social media engenders a sense of
community, a loyalty program can bring that same experience to
your loyal customers
● Treating people the way that you would want to be treated or better
is a hallmark of hospitality - loyalty marketing can help you treat
your customers in a special way
● By identifying your VIPs, you then can create local-market events
and experiences that showcase your brand and your hospitality in
different ways
● You are likely spending thousands or more on new customer
acquisition. Why not allocate resources to building the relationship
with customers, bringing them in more often and keeping them for
life?

10. Hallmarks of a good loyalty program
When choosing a company that produces the cards and software for
loyalty frequent-dining programs, look for:
● Ease of use: Customers should be able to use cards, key tags,
apps, or personal information like phone numbers; or all of these.
● Support: Provider should be known and highly-rated for service.
● Email program: The provider should allow you to access customer
data to build and make it easy to create email marketing
campaigns and templates.
● Intelligence: The provider should provide an easy-to-use
dashboard to track how many customers are using the loyalty
program, spending and track per visit and weekly spend. Programs
should also track rewards earned and redeemed to create a picture
of your ROI.
● Extensions like gift cards and e-gifting, which increases the number
of potential customers that can opt in to your loyalty program.