Put your restaurant on the fast-track to success
Rethinking restaurant customer loyalty
A 5% increase in your restaurant customer loyalty can produce as much as a 100% increase in annual profit.
Restaurant loyalty programs are being used to encourage customers to return and make further purchases. After all, it’s 6–7 times more expensive to acquire a new customer than to keep existing ones.
76% of customers perceive loyalty programs to be an extension of their relationship with a brand/company. Developing a longstanding relationship with existing customers will help you fill tables and establish a strong customer base which can be grown instead of chasing after new customers.
From “Diagram 1” below, we can see the importance of loyalty programs. Most restaurants have a customer loyalty program in some form (eg. a member card, reward points app or a coffee stamp card).
Loyalty programs are used to influence customer purchase decisions. In Australia, almost ¾ of customers over the age of 14 have a membership to at least one loyalty program. But if a customer has a reward card for each restaurant then there is little or no incentive for the customer to pick one restaurant over the other. It is as if they have no reward cards. With the growing number of competitors and the loyalty programs, how does a restaurant maximise the value they get? The following ideas will help to keep your customers loyal.
Know what customers want
The concept of a loyalty program is great but many of them lack “substance”. We define “substance” as the ability to do something actionable such as offering relevant offers to people with a high rate of redemption.
Today, customers often need to fill in a form to join in a cafe/restaurant’s loyalty program. After that, businesses send promotional emails in hopes to attract customers to come back or in attempt to “communicate” with them. But the latter really ends up more like a continuous stream of spamming. Do these promotions really bring people back or are they just ignored or sent to the Spam folder?
A research report showed that only 1.25% of customers click-through to read an email. This means that you will either need to send approximately 100 emails for each customer to read one email or 1 in 100 customers will see one email. In addition to that, if the emails are not relevant to the person then, like “ad blindness”, there’s a pretty good chance your emails will be ignored as well.
There is a much better way to engage your customers than cluttering their inboxes them with lots of irrelevant and unthoughtful emails from your loyalty program.
Going back to our point about “substance” above, if the loyalty program could “paint a picture” about each customer (see Diagram 2, right side), then this would help restaurants to provide a more relevant and personalised experience to each customer.
With a system like Atumio, your wait staff can easily determine the names of each customer and have visibility to their preferences. This empowers your wait staff to give each customer the special treatment that each of them deserves. We all secretly enjoy feeling “special” when dining out especially if you’re with a group of friends.
Like many industries, the foodservice industry can benefit from technology and the internet. We can already see that social media plays a big role in the online marketing of a restaurant/cafe and people’s dine out experience with online reviews and reservations. The internet can also be used to amplify the way restaurants provide service within their venue. A digital online menu can capture what dishes your customers are interested in vs what they order and purchase. An online photo menu can also be used to place orders or order additional food providing seamless opportunities to collect customer emails through a relevant action (eg. send them a receipt). You can then also send customers relevant promotions (eg. your 10th breakfast this month is on us). This is a more effective way to engage your customers long-term.
Let’s take a deeper look at how a digital online menu can empower your business:
- Keep your customers’ attention. Customers love new. They also love novelty. A digital menu will bring your customers back, for a fresh and welcoming experience. When customers search for restaurants online, something new in or at your restaurant will likely get their attention over the others options that keep doing the same thing.
2. Experiment with new dishes and adjust prices of dishes more often to suit demand. Smartphones bring a new life to restaurants. A restaurant’s menu can change as frequently as the chef experiments without a worry about being slowed down by boring, static paper menus. A digital menu allows you to show high-quality, attractive photos of each dish and perhaps a promotional video like an Instagram story. This enables customers to have a realistic view of what they could experience and eat at the restaurant, cafe or bar. For those creative or unfamiliar dishes, a digital photo menu makes communication of these dishes simpler and attractive at the same time.
3. Use real-time data to run targeted and relevant promotions. By combining a loyalty program with a digital menu, this enables businesses to analyse a customer’s behaviour. For example, if Sam spends more time looking at the chicken dishes, you may send him a promotion notification about a new chicken dish or special. If you use a digital menu to order online, this will make the analysis of your customer’s interests even more accurate. As a result, your promotions will be less intrusive as they are relevant to your customers which will naturally bring them back to your restaurant more often.
Centralised your products
Today, we can easily find information about a restaurant whether it is on social media (eg. Instagram) or on a delivery product (eg. UberEats). These technologies help a restaurant gain more exposure and they each have their own way of creating loyalty. But here lies the problem. Now customers are part of several loyalty programs instead of just one or two. How does the customer keep track of their rewards? Will the customer ever be able to earn enough rewards to exchange it for anything useful? As a time-poor business owner, how many loyalty programs do you have to manage and keep interesting?
If you had your own online menu, things will be a piece of cake. Let’s take a look at why:
1.Make it easier and faster to update the menu across multiple websites. If you don’t want to be a poor host online, you have to go to different websites to update your menu. When it changes, whether it’s a menu for the new season, a daily special or just a typo.
Having an online menu will make your life easier by managing your menu from one place and have it automatically stay up-to-date across multiple websites (see Diagram 4). If a dish has just sold out, it’s super easy to update that online instantly. This will save your customers from disappointed and make your restaurant or cafe more desirable because they missed out on the dish.
2. Build stronger relationships with customers by using your own menu website. Today, 8 of 10 restaurants have a Facebook page and Instagram. Your competitors can do the same on these popular products. Facebook may also recommend your competitors to your customers based on their likes or because your competitors did a paid promotion. To remove the distraction, it’s better to have your own online interactive menu, not the PDF one. Plus this also to make tracking the data about your customers easier because your restaurant’s data isn’t split across multiple systems/tools. Imagine if customers could browse your digital online menu and it could automatically recommend some dishes based on their ordering history or known preferences? Your customers would be happy to keep checking your menu knowing there would be something new or daily special for them. This kind of menu will help you get “intimate” with your customers. They won’t just be your customers but friends who enjoy visiting your venue for the experience, not “acquaintances” just like your social posts.
Loyalty programs are rapidly growing in popularity. Although their purpose is to continuously bring customers back to your restaurant, they only seem to do half that job today. A loyalty program that just spams people with offers, too often, and is not personalised to each customer will quickly become irrelevant. The customers may just not come back at all.
So how do you truly keep your customers loyal? As a restaurant owner, you should use a system that makes it quick and easy to understand your customers. With this information, you can provide a service that delights each customer whether it’s an offer for their favourite dish or a free breakfast because you know they have just finished a long night shift. As a result, it will increase their loyalty and keep them coming back, hopefully with more friends each time.