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January 5, 2024
The December 2023 episode of the Kitchen Obsessed podcast featured an interview with Craver CEO Amin Yazdani. The episode covers a lot of ground related to customer engagement technology for small and medium businesses and is worth a listen. However, if you’re short on time, we’ve summarized Yazdani’s best tips on how to implement a successful loyalty for your restaurant.
On the surface, choosing to participate in a loyalty program seems like a purely financial decision. If I buy from this brand I will earn points and get something for free. However, whether consumers realize it or not, a big part of brand loyalty is emotional, not logical. It’s a little bit like remaining committed to a sports team even when they perform poorly. You have memories about the team that have helped you form a personal, emotional connection. The same can be true of restaurant brands. A one-size-fits-all loyalty program might be a smart financial move for a customer, but it does little to create a long-term connection between the guest and the brand. Adding personalization to your loyalty program, such as offering a special reward during the guest’s birthday month or targeting a discount for a product you know the guest enjoys, can make your loyalty program stand out from the crowd. It will make your brand more memorable and build lasting loyalty.
One proven way to “gamify” your rewards program is to offer random rewards, where the guest doesn’t know when or what reward they are going to receive. The psychology behind this is the same thing you see in slot machines. When playing slots, each time you spin you know there is a chance you might win big, but it’s totally unpredictable. If you don’t win, you immediately want to play again because you know on the next spin you might win big. Loyalty programs that only have predictable rewards are less exciting to the consumer compared to loyalty programs that incorporate random rewards. And, if you make the random rewards personalized, that’s even better!
In today’s omnichannel world your guests may order from your restaurant in various ways. The most successful loyalty programs allow guests to participate in the program consistently across all channels. This means they can “earn” both when they dine in and if they order online, and they can redeem rewards through all channels. This doesn’t mean you always have to offer identical earning and redemption options for all channels. You can always tailor the program to incentivize customers to order in ways that make sense for your restaurant. For example, if you want to encourage more mobile app orders you can offer a special reward for first time app users. But you also want your loyalty program to meet customers where they are, and that includes making sure they can stay a loyal customer across all channels.
Understanding your customers’ behavior and how it drives repeat visits is key to having a successful loyalty program. Rather than shooting in the dark, modern ordering and loyalty platforms can analyze your restaurant’s data to find patterns that matter. For example, at one pizza chain Craver was able to determine that if a new guest ordered again within two weeks they would end up spending $350 more over the next year. Armed with this knowledge, Craver was able to use push notifications and discounts to encourage more new customers to become repeat, loyal customers. Partnering with a loyalty provider who understands how to mine your data for nuggets of information like this is the best way to use data to improve your loyalty program performance.
With all that said, don’t worry if your restaurant’s loyalty program isn’t perfect yet. The most important thing is to start a loyalty program of some sort so you can engage with customers in new, meaningful ways. Once you have a solid foundation you can look for ways to iterate and improve the program over time.
