Operations – Marketing: Loyalty Programs

By Daniel Thor, Bellissimo Foods

On average it costs between 8 and 10 times more to pick up a new customer than it does to keep an existing customer coming back. So what can we do to keep those existing customers happy? Fan club’s or loyalty programs are a great place to start. Loyalty programs create a bond between the customer and your establishment, and will entice them to keep coming back. Here are a couple of things to think about before starting a loyalty program of your own.

A loyalty program has a lot of benefits to both the restaurant and the customer, the most important of which is the relationship that is built between the parties. _is relationship will make the customer feel special every time they enter your establishment. Building relationships will turns one-time guests into regulars and friends, not to mention increasing your average check size.  A report from technomic published in 2013 states that 58% of restaurant goers will opt for an establishment where they earn loyalty points.

When designing a loyalty program of your own, you need to consider what your ultimate goals are, and what you want to accomplish. Strong return customer bases, positive word of mouth, positive association towards purchases, are all good places to start. We suggest that you first decide which customers are most important for your business and design the program around them.   The top 10% of your customers should be the ones that benefit the most from a loyalty program. Next determine what will be offered to the customers through the program; points towards free meal, free drink, discount on every purchase? You will need to calculate a program that makes sense for your unique needs.

Once you have determined the program that you want to implement, determine how you want to track the program. Punch cards, a mobile app, your website?  They are all possibilities, although some carry a larger price tag than others. Shoot to have a program that pays off between 3 and 6 months so customers can and do take part in the promotion. And when they do take part, make sure you recognize them. It will pay offwhen they recognize you to friends, on social media, or though some other means.

Also, if you do track the promotion, make sure you take the opportunity to gather useful information about the customer, birthdays, anniversary, menu preferences, favorite sports teams, etc.  This is important for any cross promotions or up-selling you might want to do in the future.

Lastly, claiming a reward should not be complicated. The process should be fairly painless to try and get the customers to positively associate the restaurant with the reward. Once again, if a customer earns a reward, make sure to recognize them for it. Do not make it a routine event; make it special. If you need help creating a loyalty program please contact your Delco Sales Representative.

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