If you’re a restaurant owner, you know that one of the most important things is to retain your patrons and one way to do that is to offer subscriptions and loyalty programs.

What are restaurant loyalty programs?

Who doesn't like a little extra something, a complimentary dish, a free dessert or a side of fries to go with the beer? I would say everyone! However, it is not feasible for a restaurant business to offer freebies to anyone and everyone who walks in through the doors and orders a meal. So, how do you select and choose who to give these rewards to and who all need to be retained? Loyalty programs are the answer to this question.

Restaurant loyalty programs are a way of retaining customers by offering them bonus points, discounts, exclusive access to special meals, previews and more. When you offer a little extra something to a customer, they feel rewarded and appreciated for their regular purchases and repeated visits. And as a business, you must be already aware of how hard it is to retain a customer than gaining a new one. Customer loyalty is not something that can be bought, it has to be earned and loyalty program is a means of achieving just that.

Apart from the customer loyalty factor, these programs also help businesses get access to large volumes of data regarding the customers who are signing up. These data sets then go on to help the businesses better market their products while also offering specific products, meals and services according to the preferences of the patrons. Ultimately, it is only the cash registers that are bound to see the uptick thanks to the rewards program.

What’s the need of a loyalty program?

A recent report by Paytronix and PYMNTS has found that 47% diners in the United States now use at least one loyalty program. The report has further found that the younger generation of diners are looking to get incentivized with rewards programs and they are signing up for these in large numbers. In fact, in the post-pandemic world, this has given rise to a number of new loyalty programs while the old timers have also been forced to refurbish their existing programs to compete with rivals.

For example, Chipotle's rewards program that was launched in 2019, has managed to gather 23 million members in only a few years. The company has said that the program has helped them better engage with their patrons while also drive the frequency of purchases. Do you see how these programs are reaping benefits for restaurant businesses? Let me tell you more-

Another survey by Rewards Network has found that 47% people consider loyalty programs even more important after the pandemic. With demands for dining out steadily going up, business is seeing an upward curve and so are restaurants vying for the customer's attention. And what better way than a fulfilling rewards program that gives the patrons a little extra?

Moreover, with many layoffs, economic slowdown and the doom of a recession, customers are even more on the lookout to get the maximum benefits for their buck. A good loyalty program promises to give them that. In such a scenario, restaurants should find a way to reward customers who are spending their hard-earned money on their offerings.

Apart from driving loyalty and repeated sales, rewards programs will also help you gain access to a large data bank on the customers. This will help you understand their behavior, purchase patterns, meal preferences and special days, which you can use to your benefit and improve your marketing efforts.

Do small businesses also need loyalty programs?

Who doesn't appreciate loyalty and returning customers? I am sure small restaurants would like this even more. And if they do, rewards programs or loyalty programs is the way to get it. Consider this, you have started a small food truck at the corner of a busy street that already has a number of eateries. How do you plan to get yourself noticed? You can start with rewarding each customer that buys a bagel, a coffee or a sandwich. This will make them appreciate your business and remind them of your food truck every time they have a craving for a bagel. Also, when you register their details in your database, you get access to their contact number, birthdates and anniversaries when you can offer more rewards and give them a nudge to come back every time.

You can also introduce tiered loyalty program systems in which you reward your customers with points. With every bill, they will earn points and after crossing a certain level (say 100 points), you give them a free coffee or a dessert. Upon reaching the highest tier, you can offer them a free meal for being a true loyalist who has consistently brought their business to yours and also spread the word about your little truck.

Few loyalty program tricks you should know

We all know about the great stories people have to tell about the Starbucks rewards program or the Panera Bread program. We have taken a few notes or two from the most successful rewards programs and come up with some best practices to follow while you run your own loyalty program. Here goes-

1. Referrals

Honestly, this is a goose that lays golden eggs. You reward your existing customers to get their friends and family to enrol in your rewards program and gain new customers. While they benefit from your rewards, you keep getting new customers who will be loyal and returning thanks to the reference that came from their trusted source and not a sales executive.

2. Free delivery

Introduce the free delivery scheme for your customers who sign up for the rewards program. It is a known fact that most people do not like to pay an additional $1 for delivery. As online ordering grows leaps and bounds, the promise of free delivery can work wonders.

3. Special menu

Promise an exclusive menu or food items to your loyal customers. While the existing members will feel special and appreciated with this, it will also entice new customers in signing up for the program. The promise of exclusives always work in gaining new business.

4. Preferred seating

Give table preferences and prior reservations to the member customers. No matter how crowded your restaurant is, you should be able to squeeze in a seat for your loyalists. This will make them feel appreciated and keep them coming as they'll know that even if no other restaurant lets them in, you will have a table reserved for them.

5. Freebies

The promise of freebies has always worked in any service sector business and especially the restaurant business. You can introduce a welcome dessert, birthday treats, free drinks or a coffee. All freebies work to keep them coming back. When you place a special birthday cake at the table of a customer without them asking for it, it is sure to bring a smile to their faces. They will also remember the gesture.