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The Secret Recipe:Best-in-Class Restaurant Loyalty Programs
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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
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What is Loyalty Marketing?
the effort to identify, maintain and increase the yield from best customers through long-term, interactive, value-added relationships
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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.”
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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%
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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
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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?
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5 Good Restaurant ProgramsLet’s see why they are effective...
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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
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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
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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
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Black Tier members and a guest are also invited to an annual VIP catered yacht ride around the New York harbor.
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An app is a great way to create even deeper
engagement.
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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.
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Members are rewarded for posting about White Csstle on
social media.
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New members get two free hamburgers (called “Sliders”) for signing up.They also earn points for completing activities online.
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OK – Let’s Summarize...
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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
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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
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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
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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.