How to create a customer loyalty program
A growing business eventually needs to find a way to keep its guests coming back
From copper tokens in the 1700s and green stamps in the 1800s to frequent fliers in the 1900s and now cards and apps, today’s customer loyalty programs have evolved into a variety of systems with the goal of paying back and rewarding patrons for the value they invest in the brand. Restaurants, in particular, are the most common establishments to utilize a loyalty program in hopes of determining consumer behavior and spending habits. They know that there is importance in retaining existing customers and implementing a system to specifically build customer loyalty. But how do you go about making your own loyalty program? And what do food businesses need in order to start?
FIRST THINGS FIRST
As mentioned, a loyalty program is an effective way to understand the behavior and habits of your consumers as well as to allow businesses to optimize awareness and campaigns. As a business, you should know and prioritize your goals before venturing into a customer loyalty program. Do you want to increase customer visits? Spending? Engagement? This will determine the rewards mechanics suited for your objective.
The most common types of mechanics include points for increase in expenditure, punch-card for increase in frequency, and instant gratification for engagement. Regardless of what you choose, the redeemable rewards must be enticing enough to make customers feel it’s worth availing.
For instance, The Bistro Group recently launched its Bistro Frequent Foodie (BFF) app developed by Globe Digital Ventures to complement their existing BFF card. The program offers discounts on food and beverages in any of the participating restaurants; e-vouchers for a minimum amount purchase; complimentary drinks; and seat reservations. In the process of creating the app, Raquel Hizon of The Bistro Group says, “Choose a reputable brand that has leverage and a strong company network that can also be a resource for the group. Make sure that they have a loyalty solutions programs with a strong business model and a module prepared.”
It will be even more difficult to come up with a rewards program if your brand does not have a solid guest profile and staying connected with them is not a frequent activity.
THE WORST KIND
Rewards programs that require customers to spend a fortune to earn a single point will never be profitable, according to Stephanie Kubota, product manager of Globe Digital Ventures. “Businesses often forget that repeat customers spend more in every return, so if organizations begin to calculate the profit earned from every increase in basket size and the minimal loss from small compensations, then they’ll be able to gauge how much they’re willing to offer in a sustainable rewards program.” It will be even more difficult to come up with a rewards program if your brand does not have a solid guest profile and staying connected with them is not a frequent activity.
Meanwhile, choosing a medium for the program has its own pros and cons. A card is a tangible medium that caters to the non-smartphone and non-tech savvy market; whereas an app is a more convenient medium for anyone who’s basically on the go—though both can be interwoven. “To be able to supplement this with a mobile app or point-of-sale, integration connects dots to an omnichannel and seamless customer journey from offline to online,” says Kubota.
In the competitive and crowded restaurant business space, a loyalty program could be the answer to stand out among the rest and have your customers stick around your brand. Though there is no guarantee that any loyalty program will be successful, it is better to come up—or in The Bistro Group’s case—partner with a program that will serve as a platform to empower the business to create, manage, and monitor their custom-made loyalty program and use it to its full potential.
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