Once upon a time, Samuel Goldwyn said, “I’ll take fifty percent efficiency to get one hundred percent loyalty.” So what’s up with loyalty lately — specifically in the restaurant industry?
Loyalty programs have grown to become an important driver in creating value for customers of many quick-serve and fast-casual restaurant brands. According to a report by Technomic, 82 percent of loyalty program members ranked the value of the reward as most important, whereas only sixteen percent cited brand loyalty.
The Technomic report was referenced in a recent QSRmagazine.com (QSR) blog post entitled “New Wave Loyalty: Revising a struggling customer loyalty program takes a lot of work, but it can really pay off.”
The post has lots of valuable insights and remarks by a leading loyalty program marketer on what to consider in creating, or perhaps revamping, an effective loyalty program.
The blog drills down into loyalty programs at several quick-service and fast-casual retailers, which we highlight below.
“Customers continue to place a premium on value, and several quick-service and fast-casual brands have found that an engaging and effective loyalty program can be one of the best ways to achieve a value position without simply slashing prices,” writes QSR. “But loyalty programs aren’t a one-and-done process,” they warn. “Not only do they take time to create, craft, and hone, but to squeeze the most out of them as possible and keep customers coming back for more, loyalty programs also require frequent updating, revamping, and overhauling.”
The QSR blog features insights from Pamela Sullins, director of client services at Kobie Marketing. Here are some highlights:
– “The goal when revamping any loyalty program should primarily be to increase revenue and customer retention, while also extending the reach of the brand with guests and fans.”
– “There has to be that brand experience and a pathway from a program perspective to continually re-engage to keep guests coming back.”
– “When revising a loyalty program, brands must incorporate the ability to measure the effectiveness of a program.”
– “While it can be tempting to measure success by how many customers sign up for a program, a high volume of members doesn’t always mean a high program performance.”
– “Brands also need to consider all costs involved in implementing the program —including marketing, IT support, operations, and rewards costs — when calculating increased revenue. If a concept doesn’t track this data, then it can’t determine if the revised program is successfully increasing revenue.”
– “A revamped loyalty program must also be simple enough that staff can easily articulate how the program works to customers. Further, the rewards offered in the program need a good value proposition for customers.”
– “We often recommend that brands start with a typical one-to-one reward program, such as you spend $100 and receive a coupon for $10. Once you have a strong base program, you can build in other offers, such as surprise-and-delights, special offers, or double points.”
– “Many newly revamped programs are now incorporating games into loyalty programs, giving fans the ability to earn points through Facebook or mobile apps, thus increasing customer appeal.”
– “It is important when updating loyalty programs to have a clear value proposition for both short-term and long-term value seekers. Some customers will want to earn rewards quickly, while others enjoy saving up for a larger reward. You should incorporate both customer types in your new model.”
– “It’s also smart to ensure customers aren’t forced to jump through hoops or wait a long time to earn their first reward.”
Building off the company’s mission to make guests smile, the frozen yogurt chain issued its mySmilage plastic wallet card-based program where customers earn a smile for each dollar spent. Five dollars in Menchie’s money is loaded onto the card each time 50 smiles are redeemed.
The program certainly has Amit Kleinberger, Menchie’s CEO, smiling. The more than 3.2 million loyal mySmilage participants spend an average of $1 more than the chain’s non-member customers.
Using the new L.I.F.E. app, fast-casual Zoës Kitchen’s loyal customers can track healthy eating habits, exercise goals, community service, and earn “goodies” for meeting personal goals and by logging purchases from the chain. Interestingly, the app allows guests to share what they’ve earned; for example, give a friend who’s having a tough day store credit for a piece of chocolate cake.
Another capability of the system is to capture survey data at the point where customers upload their store receipt in exchange for loyalty points. This kind of immediate feedback allows for more rapid improvement in the customer experience.
Just as we share our vast point of sale (POS) experience and expertise with startup owners in order to help them make the best decisions from the very beginning, we at Sintel Systems are happy to share articles, advice and commentary about the retail restaurant market.
As the only full-service POS provider — from software development to franchise incubator to ongoing support — part of Sintel’s commitment to our customers and industry is to share ideas and information. Whether you’re a first-time franchise hopeful, a small business owner or an established chain, it’s always smart to stay on top of the latest loyalty program best practices to achieve financial success.
If you are interested in learning more about Sintel’s POS systems and how our knowledge and support can impact your future success, call us for a complimentary phone consultation.
Read the full QSRmagazine.com post here.
Sintel Systems is the only full-service provider of tailored Point of Sale systems across retail, restaurant and service industries, including frozen yogurt shops, pizzerias, sushi restaurants, cafés and retail stores.
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