The restaurant industry is highly competitive, and restaurant owners must do everything they can to ensure their customers keep returning for more. Whether you run a fast-food joint, a fast-casual restaurant, or a fine-dining establishment, setting up a restaurant loyalty program could be a great way to encourage repeat business.
Loyalty programs in restaurants benefit regular customers and provide incentives that could entice new customers into your eatery. It’s estimated that up to 47% of U.S. diners use at least one restaurant loyalty program — consumers love them.
But what exactly is a restaurant loyalty program, and how can you implement one in your food business? We’ll answer those questions and more in this handy guide to loyalty programs for restaurants.
Customer loyalty programs in restaurants offer perks to increase customer retention and improve the overall customer experience. Customers earn freebies and rewards like coupons or gift cards in exchange for purchases made at a particular restaurant or restaurant chain.
Many loyalty programs in restaurants work with a points-based system — customers collect points for each purchase and exchange those points for free items or money-off vouchers.
Many of the country's most popular food and beverage chains use rewards programs to encourage customers to order again. Some examples include:
Starbucks Rewards
DD Perks at Dunkin’ Donuts
MyPanera at Panera Bread
Chipotle Rewards
Chick-fil-A One
These systems offer various rewards to customers based on the number of points or visits a customer makes. The specific rewards can range from small (a free coffee or free dessert) to large (such as a free entree or free appetizer), depending on the number of points collected.
Many loyalty programs also offer a free birthday reward to customers — it’s a great way to encourage visitors back for another visit!
There are several reasons why you might decide to set up a loyalty program in your restaurant.
The main reason restaurants use loyalty programs is to give existing customers a good reason to return for more. If you offer freebies to your diners, they’re more likely to become repeat customers who return frequently.
Loyal customers can also act as a free marketing tool. Research shows that over 85% of loyal customers will recommend a brand they like to others. By encouraging brand loyalty in your existing customers, you’ll be encouraging them to spread the word about your restaurant to potential new customers too.
Loyalty programs in restaurants can also encourage new customers. Restaurateurs can offer bonus points to new customers upon signing up for their rewards system.
Many chain restaurants offer sign-up bonuses to further incentivize new visitors to join the program. For example, Chipotle often provides free chips and guacamole to customers signing up for their rewards plan. This is an easy way to bring new customers in and encourage sign-ups.
Restaurants can also use loyalty programs to promote new items on their menus. You could offer additional points if customers purchase a specific item or offer new items as a freebie when customers collect a certain number of points.
Setting up loyalty plans to promote new items is an excellent way to boost sales of limited-edition dishes or collect valuable feedback on new flavor combinations.
Restaurant loyalty programs also let you collect valuable data about your customers. You can use their rewards program history to see what menu items they order most regularly and what they may spend more money on in the future.
You can then use this information to curate personalized offers to encourage return visits — just ensure you include data collection in your reward program’s terms and conditions so your customer knows what they’re signing up for.
With loyal customers and more new diners coming to eat at your restaurant, it’s highly likely that you’ll be processing more orders and increasing your profit margins.
What’s more, by setting up an effective rewards program, you’ll have plenty of opportunities to upsell. Customers will be keen to earn an extra stamp or enough points to get them a reward. You could, therefore, receive more high-value orders, improving your restaurant’s bottom line and boosting your profits.
There are a few ways to set up a successful reward system in your restaurant. The best restaurant loyalty programs are easy to use for both staff and customers. Keep it as simple as possible for customers to encourage them to use it at each visit.
A stamp or punch card-based restaurant loyalty program is easy to use and cheap to set up. Customers simply present their punch cards to a cashier when making a purchase, who will then stamp or punch the card. You can base the number of stamps on the amount of money spent, the number of items purchased, or the number of visits made.
The downside of punch cards is that stamps or punches can easily be forged. Purchase an unusual hole punch or a personalized stamper so your customers can only collect rewards from your staff.
A more advanced solution is to link customers’ email addresses to a loyalty program.
Customers use their email to sign up and provide this email address each time they make a purchase at your restaurant. Loyalty points are associated with specific email addresses, so customers can quickly check their rewards points from home or while on the go.
An email-based system is an excellent option for many small and medium-sized restaurants because it works with various restaurant order systems. Many restaurant point-of-sale systems (also known as POS systems) have reward program integrations, meaning you can set up your rewards program quickly and easily.
It’s even possible to use email loyalty programs with self-service kiosks such as KioskBuddy. Customers simply use the app’s interface to enter their email addresses and collect points on their orders.
Email systems can also integrate with in-person orders and online ordering systems to ensure customers collect points on all orders.
Plus, a customer doesn’t have to remember to keep their loyalty card on them, so they won’t miss out on collecting reward points.
The most advanced options for organizing rewards are providing a points card to your loyalty program members or setting up a mobile app.
Loyalty apps provide customers with a QR code or barcode for your front-of-house team to scan when the customer pays. This will instantly add the correct number of points to the customer’s profile.
You can also use a loyalty card system. Customers receive a card (the size and shape of a credit card) with either a magnetic strip or a barcode to store their data. They then swipe or scan the card to collect or redeem points when paying for their food.
Loyalty cards and app-based systems are easy for customers to use. It’s also faster for customers to checkout with a card than it would be for them to enter their email addresses.
However, if a customer forgets their card or doesn’t have their phone, it will prevent them from earning rewards. Also, it’s a larger and more complex system to set up, meaning restaurant managers will have to invest more time and money to ensure it’s working.
The best loyalty programs in restaurants are those that customers actually want to use. Keep things simple for customers but ensure you’re not going over budget.
A good choice for small and medium restaurants is an email-based reward program set up directly on the POS. Email systems like this are simple to set up and have great functionality without the need for additional software. Email-based rewards programs also work with self-service kiosks like KioskBuddy.
KioskBuddy provides an effective way to set up self-ordering kiosks in your restaurant. Customers can place and pay for their orders with just a few taps. They can also collect loyalty points on the tablet by inserting their email address.
Sign up for KioskBuddy and enjoy a 30-day free trial to see how it fits into your restaurant business.