the secret recipe of best-in-class restaurant loyalty programs

The Secret Recipe:Best-in-Class Restaurant Loyalty Programs

Just-in

Winking at us

Warming Up

Going Steady

Losing Interest

Lost

First visit

Been in a couple of times

Chatting with the owner and staff

a Regular Customer

Less frequent visits

The Restaurant Business is Like Dating

What is Loyalty Marketing?

the effort to identify, maintain and increase the yield from best customers through long-term, interactive, value-added relationships

What Restaurant-Goers Do Now... (and what they would do)

Source: Technomic, Market Intelligence Report, 2013

36%

Have Joineda restaurant loyalty

program

80%

Would JoinIf their favorite restaurant

had a program

58%

Would VisitAGREE: “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.”

The Power of Loyalty Marketing

35%Increased Visit FrequencyDue to restaurant rewards program

Source: Loyalogy, Loyalty Pulse Study, 2013

Would Recommendto friends, if the restaurant has a good loyalty program.

65%

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

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?

5 Good Restaurant ProgramsLet’s see why they are effective...

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

Why the First Redemption Matters

Earn Rates Increase by up to 8XAfter claiming a first reward

Source: LoyLogic, the Loyalty Guide 6, Section 1.4, pp. 25-26.

8X

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

Black Tier members and a guest are also invited to an annual VIP catered yacht ride around the New York harbor.

An app is a great way to create even deeper

engagement.

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.

Members are rewarded for posting about White Csstle on

social media.

New members get two free hamburgers (called “Sliders”) for signing up.They also earn points for completing activities online.

OK – Let’s Summarize...

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

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

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

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.

Let’s explore the possibilities!

Jim Griffin

jim.griffin@lassuloyalty.com