The rapid growth of technology has facilitated the ease of starting culinary businesses or restaurants. However, the proliferation of businesses has resulted in intense competition. To survive and remain favoured by consumers, entrepreneurs must implement targeted strategies, one of which is the implementation of a customer loyalty program.
According to the book “Customer Loyalty Program” by Aang Curatman, Agus Suroso, and Suliyanto, a customer loyalty program is a marketing strategy designed to stimulate customer behaviour, encouraging them to repeatedly choose products or services from a particular business by offering various rewards. These rewards are portrayed as a form of appreciation for loyal customers, with the ultimate goal of creating a sense of value and fostering a strong, enduring relationship between customers and businesses. For restaurant and culinary entrepreneurs, this program can transform a transactional relationship into an emotional and experiential one.
The Benefits of Customer Loyalty Programs for Consumers
Who doesn’t enjoy receiving bonuses or rewards? The effective distribution of rewards encourages consumers to enrol in loyalty programs. Businesses typically offer various benefits to consumers, including:
- Joyful Experience
Loyalty programs often incorporate gamification elements, providing additional advantages to consumers. For instance, some brands create programs where customers accumulate points after each purchase. The more they spend, the more points they earn, leading to increased benefits. This creates a sense of joy for consumers.
- Feeling Valued with Personalised Experiences
Leveraging data collected through loyalty programs, businesses can offer personalized recommendations and promotions based on individual customer preferences. Additionally, consumers often receive extra benefits, such as discounts, on their birthdays.
- Cost Savings
The most appreciated benefit for consumers is often the opportunity to receive discounts, redeemable points, and other advantages. Loyalty programs help consumers save money on desired purchases.
Benefits of Customer Loyalty Programs for Restaurant
The rewards and incentives mentioned above can have a positive impact on consumers. Satisfied customers may become brand advocates, offering positive reviews and recommending a brand to others. This is a crucial aspect for businesses, as the voice of the customer is a highly effective marketing tool, influencing others to consume goods or services from a particular brand. Consequently, businesses can build consumer trust, reduce marketing costs, and increase return on investment (ROI). The results of these strategies can be assessed through tools such as Customer Relationship Management (CRM) applications.
Various forms of rewards, such as discounted meals, souvenirs, cash, or upgraded services, are provided to consumers. Typically, businesses issue loyalty cards or memberships to track and record consumer purchases. Consumer data obtained from membership registrations becomes a reference for businesses to personalise rewards for each customer.
Types of Customer Loyalty Programs
According to Loyaltylion, there are four common types of customer loyalty programs commonly implemented by businesses. These types can also be applied in the restaurant or culinary industry:
- Subscription-Based
Subscription-based loyalty programs allow consumers continuous access or purchases over the long term. Consumers usually pay an upfront or recurring subscription fee to gain access to exclusive benefits offered by the business. Classic examples include Netflix and Spotify, where members pay a monthly or annual fee for streaming services and more.
- Value-Based
Businesses often offer loyalty programs based on the value consumers bring to the brand. This value is not necessarily monetary but can be in the form of brand reviews, social media engagement, or downloading the brand’s app. For example, McDonald’s often gives free food or drink options to consumers who download their app.
- Points-Based
Points-based loyalty programs allow consumers to accumulate points based on the value of their purchases. These points can be exchanged for various beneficial rewards or discounts. Starbucks is a common example, offering points for purchases that can be redeemed for free drinks or food items.
- Tiered
Tiered loyalty programs offer rewards and benefits that increase as consumers spend more. These programs are excellent for encouraging repeat business and higher spending. However, they can be complex to manage, requiring businesses to ensure that higher tiers offer genuinely enticing benefits to motivate consumers to move up the ranks.
Tips for Crafting a Best Restaurant’s Customer Loyalty Program
To ensure the effective planning of a restaurant loyalty program that appeals to consumers, consider the following key steps:
- Set Clear Goals and Define Target Consumers
Clearly define specific goals, such as increasing customer retention or attracting new customers, and understand the preferences and expectations of the targeted consumer base.
- Choose the Right Program Type Based on Goals and Consumers
Select a loyalty program type that aligns with the restaurant’s objectives and consumer characteristics. Common types include points-based, tiered, value-based, or subscription-based programs.
- Determine Rewards for Consumers
Identify attractive rewards for consumers, such as discounts, free items, exclusive access to future promotions, or personalized offers. Ensure that the rewards resonate with the brand and are appealing to the target audience.
- Select an Easy-to-Use Platform
Choose a user-friendly platform, whether it’s a mobile app, physical loyalty cards, or a web-based system. Make it accessible for consumers to participate and track their rewards.
- Effectively Promote the Loyalty Program
Develop a robust marketing strategy to promote the loyalty program through various channels, including social media, email marketing, in-restaurant banners, and the business website.
- Evaluate, Adapt, and Improve the Loyalty Program
Gather feedback from consumers and be open to adjusting the loyalty program based on their suggestions. Continuously seek ways to enhance the program and stay relevant to changing consumer expectations.
The Importance of POS and CRM Applications in Maintaining Customer Loyalty
Integrating a loyalty program with Point of Sale (POS) and Customer Relationship Management (CRM) applications is crucial for easy tracking of purchases and reward redemptions. This integration ensures accuracy and convenience for both consumers and businesses.
By connecting the loyalty program with POS and CRM applications, businesses can regularly monitor the program’s performance, analyse data on customer participation, redemption rates, and overall impact on sales. An example of an application that can be utilized is Bleudine by Rideum. This application not only helps businesses increase productivity but also aids consumers in becoming loyal customers through its CRM management.
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In conclusion, good planning and execution of a customer loyalty program for restaurants can strengthen relationships with customers, encourage repeat business, and distinguish the restaurant in a competitive market.
