You Can’t Buy Loyalty
But You Can Reward It
“Anytime you can get someone coming in as a repeat, it’s a grand slam. You’re building that local base.”
- Kevin Danilo, Owner, Batch Gastropub
Your customers check in at your place on Facebook, maybe post a photo of a dish on Instagram or send a Snapchat out from their lunch. You appreciate the attention they give you, so why not give them something back? Loyalty and rewards programs are a great way to, well, reward their loyalty.
From Starbucks and Dunkin’ Donuts to California Pizza Kitchen and Counter Burger, restaurants across the country have ramped up their rewards programs to build a loyal customer base and increase revenue. According to a 2012 National Restaurant Association report, 30 percent of restaurants that had a frequent-diner program did so to build loyalty and 57 percent of adults said they would dine at a restaurant with a loyalty program. What are you waiting for?
“A program helps give a customer who may already be a fan of that brand another level of connection to that brand,” said Jennifer Bell, associate partner and executive director of marketing for Lettuce Entertain You Enterprises [LEYE]. “There always has to be a perceived value for the brand.” LEYE, which is headquartered in Chicago and owns around 100 restaurants around the country, launched its Frequent Diner Club in 1989. People used to sign up with pen and paper and wait two weeks to receive a loyalty card in the mail. Today, the company has 150,000 active members who have downloaded the company’s new Lettuce Eats mobile app upwards of 56,000 times and can get into the program immediately. The app allows people to ditch their card and control their loyalty account digitally. It allows people to see what restaurants are closest to them, make a reservation through it, view their loyalty points and see their rewards dollars — which accrue at a rate of 1 point for every $1 spent and then convert to $10 in rewards when they hit 140 points — all in real time.
“We’re giving them 7 percent back on every transaction,” Bell said. “What makes our program unique is we give them a variety of brands and price points where they can earn and redeem points. Roughly 18 percent to 20 percent of our sales come from frequent diners.”
But what if you’re not a multi-restaurant corporation with deep pockets to be able to afford the costs of an app to build your loyalty program? Get creative! That’s what Miami’s Batch Gastropub did before it opened on New Year’s Eve 2014. Owner Kevin Danilo built a program to reward customers. “Our whole marketing platform was how to get repeat customers,” he said. “We’re a few blocks off the main entertainment strip downtown. We had to figure out how to get people to come down this way to get them in and get them back.”
Batch gives its loyal customers discount drink cards and has five different types of cards:
- VIP: regular customers get 15 percent off
- Locals: people living within a few blocks get 15 percent off
- In the Biz: people in the bar and restaurant industry get 20 percent; if they come in 3+ times a week the discount goes up to 50 percent.
- Hero’s Discount: Anyone in uniform — police, fire, military — gets 20 percent off. If they come in when on duty, the discount gets applied to their food.
- Euro Sport: Encourages European soccer fans to come in and get 15 percent off drinks during games.
“Anytime you can get someone coming in as a repeat, it’s a grand slam,” Danilo said. “Sure, for the revenue, but if they’re coming in multiple times, they also like what you’re doing. That repeat business is monumental. You’re building that local base.”
Driving customers in can be as easy as a new customer texting a code to a restaurant. At Omaha Tap House, a first-time customer can text a number to the restaurant to redeem a free appetizer within 72 hours. After that, the restaurant will sometimes send out a group text to reward those users with special offers, like getting 20 percent off a beer dinner.
At Otto’s Pub & Brewery in State College, Pa., customers can join its Pub Club. A lifetime membership costs $150, but it comes with loads of benefits, like 15 percent off food Monday through Thursday; a free entrée the week of your birthday, $20 off after spending $100 in any given month; a free 12-ounce seasonal beer the day it’s released; and more. The club, which launched in 2002, has 2,800 members.
There are countless ways to go about setting up a loyalty program. You have to figure out what makes the most sense for your business and listen to what your customers want.
“Our loyalty customers have confidence in our brand,” LEYE’s Bell said. “And it’s important to me if you’re investing your precious dining dollars with us, we want to take good care of you.”