Recipe for Success: Local Restaurants and Cryptocurrency
Why discount loyalty programs don’t work for small local restaurants
With 1.5 billion inactive loyalty program members and $154 billion in unredeemed discounts sitting on the books of many restaurants/retailers in North America, the current structure of loyalty programs do not work for local independent and small chain restaurant owners. Yes, there are some brands that have been a success using this model such as Starbucks and Chick-fil-a but for small local restaurant owners, this model has been costly and highly ineffective.
Between the monthly fees from third-party loyalty systems and the discount offerings, local restaurant owners are spending millions of dollars every year on a model that does not help build loyalty, especially amongst Millennials. Many local restaurant owners are sacrificing profitability on a loyalty/customer retention model that has proven to be ineffective.
The current loyalty program models require that businesses provide large discounts to customers in order to gain their loyalty, but the model only works if you are a national chain restaurant that has the capital to absorb the deep discounts needed to drive customer traffic to your store. For example, on average, restaurants net income represents 6% to 10% of gross sales. In 2018, McDonald’s company-wide revenues were $21B. For small restaurants, the average gross sales revenue is about $350,000 to $700,000 per location. This difference prevents many small restaurants from offering the deep discounts needed to drive customer traffic to their store.
Recipe for Success:
There are a few main ingredients in every recipe that makes a dish bold and flavorful and this is true with any loyalty program. The main ingredients that make a great loyalty program for restaurant owners are stable point values, flexibility, and usage options.
With millennial consumers leading the way, consumers want to acquire points faster with the flexibility to earn and use points with minimum restrictions. By listening to consumers and restaurant owners alike, we created Now Open App Rewards. A multi-restaurant rewards program (blockchain) that provides consumers with the ingredients they want in a loyalty program while relieving the need for restaurant owners to issue discounts, via cryptocurrency, to attract and retain customers.
Why is Cryptocurrency Important to Local Small Restaurant Owners:
The utilization of cryptocurrency in the local restaurant space provides the following benefits:
- It allows business owners to provide an alternative reward to customers without impacting restaurant owners’ profitability;
- It provides an incentive for a new generation of customers that are interested in cryptocurrency to engage with their establishment; and
- It also provides restaurant owners the opportunity to have a marketing advantage over national chains that are not accepting cryptocurrency.
To learn more about our rewards program visit www.nowopenapprewards.com or follow me on LinkedIn or do both.
