22 Sep

If we search for the key elements that make a restaurant business successful, you will always find: great food, location, menu planning, guest experience, employee satisfaction, budgeting, marketing, etc.

But one of the most crucial elements that is rarely present in the results is the importance of the customer data and customer retention.

If you dig a little bit further, the real success of platforms like delivery platforms (Ubereats, Deliveroo), booking platforms (The fork, Zomato), discounting platforms (Eatclub, Groupon) is that they gather restaurants’ customer data and use that data to promote their brand, discounts, offers and promote other restaurant recommendations.

That is why the expression “Data is the new Gold” is becoming more and more popular in the tech world. However, looking at the situation holistically, in any industry, including hospitality, having our customers’ names, emails, phone numbers, etc. is GOLD!

Therefore the big challenge and question we all struggle with is “how to mine it?!” How to effectively use this data, for non-techies 🙂

For the hospitality industry, one of the most effective ways to do it is through a suitable loyalty/reward program.

A customer loyalty program is a program that offers benefits to frequent customers, rewarding customers who visit on a regular basis and encouraging them to return frequently; thus, building a stronger bond between the customer and the restaurant.

There are many statistics proving the importance of incorporating loyalty programs to increase customer retention in the hospitality industry. According to the advisory firm Bain & Co., “80% of your future profits will come from 20% of your existing customer base”, and “increasing customer retention by just 5% boosts profits by 25 to 95%”.

Furthermore, according to Forbes, “65% of a company’s business comes from existing customers”, as well as “it is 5 times more expensive to acquire a new customer than to retain an existing one”.

In order to increase customer retention, there are different ways of rewarding your customers: offering loyalty points is one of the most common ways; usually the customer gets points based on their bill amount.

As well, there are different channels to reward them, for example, a membership loyalty credit card, punch cards, automatic reward systems and databases (POS systems), etc.

However, over time, customer demands have changed and therefore the loyalty programs have to evolve in order to adequately incorporate a cost-effective program that will benefit your customers and also your pocket.

There are two main features that we recommend you consider:

1. It is not just about monetary rewards!

It has been proven that giving money back for a certain amount spent or giving points that can be redeemed as a discount in the bill are the most popular and effective rewards, it is definitely a good start.

However, customers are becoming more and more demanding and expect more diverse rewards.

Having different options in your program will give the restaurant more possibilities to engage with your customers and develop stronger bonds.

Ideally, you want a loyalty program that you can customise to enhance the intrinsic and unique value your venue has, turning this uniqueness into a competitive advantage. Do you want to grow your social media presence? Do you want to showcase things such as events, new recipes, key staff members? Do you want to boost customer referrals? Do you want to capitalise on your specific intangible value?

If so, your loyalty program should allow you to do this and more!

2. A clean, mobile and digital reward

The program has to have a digital and mobile solution. Over 70% of customers consider “very important” the ability to redeem their rewards on digital and mobile platforms, and physical reward systems (e.g. membership cards, punch cards) are on the verge of extinction.

The benefit for the restaurant is that through an app, they can gather information and preferences to provide a more personalised solution for their customers.

A loyalty app is extremely convenient for both the restaurant and the customer. So, after understanding the role Customer Data plays in your success and the benefits of a digital reward system, what’s next?

Fortunately, there are technologies that can bring these programs to a whole new level, and Loop is one of those solutions.

The reward program that Loop has created is able to lend a hand to restaurants in this crucial area. Loop’s reward system will help restaurants encourage customer retention, it will also provide relevant customer data and consumer trends and also establish effective communication routes between the business and the customer.

Also, the system will have the flexibility to adapt to your specific needs and help you capitalise on both tangible and intangible assets when establishing your rewards program.

It is worth mentioning that businesses will control their own data, meaning they will have full access to their customer’s information and this data will not be sold nor shown to their competitors (as opposed to what companies like ubereats, zomato, and the like do).

In sum, restaurant owners focus a lot on the key factors related to a hospitality venue such as food, style and service but often underestimate their biggest asset : “their customers”!

It is crucial for hospitality businesses to have access to and control their customers’ data, and implement their rewards/loyalty programs based on that same data. See what Loop can do for you here www.loop.do

Marcela Rodriguez
Loop

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