The Secret Recipe of Best-in-Class Restaurant Loyalty Programs
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Jim Griffin, founder of Lassu Loyalty, shares best practices for design of customer loyalty programs for resuarants. #customerloyalty #loyaltymarketing www.lassuloyalty.com
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The Secret Recipe of Best-in-Class Restaurant Loyalty Programs
- 1. The Secret Recipe: Best-in-Class Restaurant Loyalty Programs
- 2. The Restaurant Business is Like Dating Just-in Winking at us Warming Up Going Steady Lost Losing Interest First visit Been in a couple of times Chatting with the owner and staff a Regular Customer Less frequent visits
- 3. What is Loyalty Marketing? the effort to identify, maintain and increase the yield from best customers through long-term, interactive, value-added relationships
- 4. What Restaurant-Goers Do Now... (and what they would do) 36% Have Joined a restaurant loyalty program 80% Would Join If their favorite restaurant had a program Source: Technomic, Market Intelligence Report, 2013 58% Would Visit AGREE: “I am likely to base my decision about where to dine, based on whether or not I am a member of the restaurant’s loyalty program.”
- 5. The Power of Loyalty Marketing 35% Increased Visit Frequency Due to restaurant rewards program Source: Loyalogy, Loyalty Pulse Study, 2013 65% Would Recommend to friends, if the restaurant has a good loyalty program.
- 6. What about a “punch card”? Easy to implement No contact information Vulnerable to cashier fraud Rewards are routine, boring... basically, a discount No segmentation No communication
- 7. What Do YOU Want Your Best Customers to Do? • Make you their first choice? • Plan their birthday party with you? • Refer their friends? • Rate you on Trip Advisor? • Use you for catering? • Come in during non-peak hours? • Order extras – like wine and dessert? • Order take-out?
- 8. 5 Good Restaurant Programs Let’s see why they are effective...
- 15. Beefeater Program Key Features • Online Activation or via Call Center • 300 Bonus Points for Activation • Rewards Expressed as Tangible Benefits • Notice that First Reward is Possible after Spending 40.00 (equivalent to 3-4 meals.) Mechanics • Earn = 5 Points for every 1.00 Spent • Reward: 500 Points = 5.00 • Redemption is in blocks of 500 Points • Equates to a 5% Reward 300 Bonus + 200 Earned = 500 Reward
- 16. Why the First Redemption Matters Earn Rates Increase by up to 8X After claiming a first reward 8X Source: LoyLogic, the Loyalty Guide 6, Section 1.4, pp. 25-26.
- 19. Hard Rock Program Key Features • Two program levels: FREE and VIP • FREE earns 20 points for each $1 USD • VIP earns 30 points for each $1 USD • New Members Are Entered to Win Great Prizes • (All Expense Paid Trip to Hard Rock Hotel, Orlando, Florida) • Monthly Offers • Commemorative Hard Rock Collectibles for Reaching Member Milestones
- 24. Black Tier members and a guest are also invited to an annual VIP catered yacht ride around the New York harbor.
- 26. An app is a great way to create even deeper engagement.
- 27. This is an Activation Strategy This is equivalent to a free meal. If it’s a party of two, it’s like a 50% discount. The bigger the group, the less expensive the discount will be.
- 28. Members are rewarded for posting about White Csstle on social media.
- 29. New members get two free hamburgers (called “Sliders”) for signing up. They also earn points for completing activities online.
- 32. OK – Let’s Summarize...
- 33. 3 Steps to Get Started (or to get Re-started) 1. Plan • Review overall company business objectives • Benchmarking • Obtain voice-of-customer feedback • Segment based on demographics, lifestyle, needs • Tiering / scoring based on RFM data • Identify target groups • Identify desired member behaviors • Determine loyalty program objectives and KPIs 1 2 3
- 34. 3 Steps to Get Started 2. Build • Create a promotional currency, determine the value • Determine how members will earn and burn points • Ensure that rewards are relevant, attainable and worth the effort • Create a simple enrollment process 1 2 3
- 35. 3 Steps to Get Started 3. Get Creative • Focus on customer relations. Build a mutually-beneficial relationship. • Create tailor-made offers. • Recognize and reward best customers. Create brand advocates. • Use simple, direct communication. Keep offers fresh and exciting. • Imagination creates winning advantage. Technology is merely an enabler. 1 2 3
- 36. Loyalty Planning Framework This need not be a long, protracted process, but it is wise to follow a framework when thinking about customer loyalty, so that important considerations are not skipped over. Doing this produces a more reliable outcome.
- 37. Let’s explore the possibilities! Jim Griffin jim.griffin@lassuloyalty.com
Editor's Notes
- You will notice that there are two participation levels available. The VIP program costs $24.95 USD but that cost may well be worth it for top-tier customers, due to accelerated rewards in that program and other benefits. For customers who are unsure about the value proposition, there is also a free version, which can serve as a funnel for the VIP program. This illustrates loyalty program segmentation, based on spending level. It’s well worth considering.