Loyalty programs have been around seemingly forever (Sperry and Hutchinson Co. launched “Green Stamps” in 1896!) Yet restaurants lack far behind other service industries with high competition and buyer frequency — like grocery stores, hotels, and airlines. Restaurants & Institutions talks about some of these user stats here:
“Chicago-based consultancy Technomic indicated that while 8% of diners currently participate in frequent-diner programs, two-thirds of customers surveyed said they would likely increase their visits to a favorite restaurant if it offered a reward program.”
Why is it the case that so few restaurants offer loyalty programs? According to Direct Magazine, it’s often due to the cost and complexity of implementing a program and system. Sometimes too, it’s the feeling by a restaurant owner that a loyalty program is just a glorified coupon program —
“The purpose of a loyalty program is not points or rewards or plastic cards or discounts. These are just means to an end. It’s rather to discover who the restaurant’s customers are, and to track their behavior, find out their preferences, cater to those preferences and keep two-way communication going. The result should be an ever-stronger relationship with customers that increases frequency, per-check revenue, marketing efficiency and competitive advantage.”
In this age of “drive-by Internet reviews“, a properly designed loyalty program that couples an in-store component with an online component can even help reduce the feeling of increasingly anonymous user-generated drive-by reviews, by building engagement and conversation between the restaurant and the diner.
With that in mind, my company BooRah has a loyalty program for restaurants that seeks to provide these loyalty program benefits without all the complexity — by making use of the Internet. If you’re a restaurant owner interested in trying this out, sign up for the free 30-day trial.