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  • Writer's pictureSophia Brading

Maximising Customer Loyalty: What Restaurant Owners Need to Know

Understanding Loyalty Programmes: A Key to Customer Retention


As a restaurant owner, attracting new customers is always a priority, but recognising the value of your existing customer base is crucial. Research indicates that existing customers have a 67% higher average order value compared to new customers. Moreover, acquiring new customers can cost five to ten times more than retaining current ones. The bottom line is clear: retaining customers is invaluable.


One of the most effective ways to increase repeat visits and build meaningful relationships with your customers is through a personalised loyalty program.


Why Does a Loyalty Program Matter for Restaurants?


Loyalty programs are extremely popular among UK customers. A survey revealed that 81% of consumers currently engage in a loyalty program, with an additional 8% having participated in the past. This indicates a strong consumer preference that your restaurant can leverage.


Customer loyalty programs are a valuable resource that can improve customer retention, increase average spending, and provide a wealth of customer data. Personalised rewards and instant gratification are key motivators, with 72% of consumers finding loyalty programs effective, according to a 2018 YouGov survey.


The Impact of Economic Challenges on Customer Loyalty


The current cost of living crisis is leading to notable transformations within the hospitality sector. With escalating costs, many restaurants pass on these extra expenses to their customers. The Office for National Statistics reveals that restaurant and café prices surged by 8.8% in the twelve months leading up to October 2023.


In a 2022 survey, 56% of participants stated that they have been forced to give up on brands they were previously loyal to due to inflation. This clearly shows that inflation is significantly impacting customer loyalty in the UK, particularly among younger people and those with lower incomes.



The Power of Personalisation in Restaurant Loyalty Programs


Personalisation has emerged as a potent loyalty booster. By tailoring experiences and communications to individual preferences, you can forge a deeper connection with your customers. Nearly half (49%) of UK guests seek personalised local experiences tailored to their previous booking history.


Offering personalised recommendations, exclusive offers, and targeted rewards not only enhances the overall customer experience but fosters a sense of appreciation and recognition, encouraging repeat visits and long-term loyalty.


Leveraging AI for Enhanced Customer Engagement


Restaurants are increasingly turning to the transformative capabilities of artificial intelligence. AI-powered chatbots and virtual assistants are becoming common, providing 24/7 customer service and instant responses to guest inquiries.


Machine learning algorithms continuously refine customer segments and engagement strategies. AI-driven loyalty programs can also integrate gamification components to enhance customer satisfaction and engagement, making your loyalty program more engaging and effective.


Using Data-Driven Insights to Boost Customer Loyalty


A restaurant customer journey starts well before the meal, with a website visit, reservation, or a click on an email link, and ends after the visit with a review or a customer survey. Along this path, several touchpoints can generate a goldmine of data.


By gathering and analysing data from various sources, you can gain valuable insights into customer behaviour, preferences, and habits. This information can then be used to personalise marketing campaigns, improve customer service, and ultimately drive revenue growth.


Effective Marketing Strategies for Your Loyalty Program


Building a remarkable loyalty program is only half the battle; the other half is ensuring your target audience knows about it.

Email marketing can produce 174% more conversions than social media. Social media campaigns and personalised email outreach are effective strategies to enhance the visibility of your loyalty program and connect with your target audience.


Proven Strategies for Effective Restaurant Loyalty Programs


- Keep it Simple: A loyalty program that requires a complicated process will discourage engagement. Streamline behaviour registration and reward distribution for seamless interaction.

- Exclusivity: Gaining something not accessible to everyone else increases the perceived value of the reward. Add extra points or vouchers on special occasions like birthdays.

- Little and Often: Small, frequent rewards are more motivational than large, distant ones.

- Full Visibility: Visibility of accumulated points and rewards encourages engagement. Maintain this with online systems such as an app.

- Consistency: Regularly remind customers about the program with automated emails.


Creating a winning loyalty program involves understanding and leveraging the latest trends and technologies to foster deeper connections with your customers.


By focusing on personalisation, digital convenience, and data-driven insights, restaurants can build effective loyalty programs that drive repeat visits and increase customer satisfaction.


By implementing these strategies, you can not only retain your current customer base but also create a loyal community that keeps coming back, ensuring sustained growth and success for your restaurant.


For 5 Genius Examples of Big Chain Restaurant Loyalty Programmes and How Smaller Restaurants Can Implement Them (click here)




Sources:

Forbes - The Value of Customer Loyalty - https://www.forbes.com

Harvard Business Review - The Value of Keeping the Right Customers https://hbr.org

3. Statista - Loyalty Program Engagement https://www.statista.com


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