Loyalty Programs: One of Your Smartest and Most Powerful Marketing Tools

The restaurant industry can be cut-throat, especially in an economy that encourages people to save money and spend less on things like eating out.  These facts make restaurants the ideal places to create loyalty programs.  In fact, in almost every sector of the industry, loyalty programs increase customers, increase the number of times those customers return to the establishment, and increase the likelihood that they will buy more when they are there. 

So why don’t more restaurants have them?  Well, the simple answer to this is that many restaurants don’t know enough about loyalty programs, particularly how to establish them and how much they will cost.  This creates scenarios in which restaurant owners have misconceptions about loyalty programs and how to administer them.  Many might think that a loyalty program will be too expensive, won't work for their particular clientele base, or will be too much hassle to create and administer. 

The simple fact is that a restaurant loyalty program will significantly increase the frequency and spending of your most loyal customers.  While the number of repeat and loyal customers for most restaurants is typically one-third of the total sales that restaurant makes, you can increase that number dramatically with loyalty program incentives. 

One mistake that many restaurants make in establishing and administering loyalty programs is they offer discounts to their most loyal customers.  This is a mistake because in most cases, customers will be loyal to your restaurant because they like the taste of your food or the quality of your service—not because of the price discount.  This means that your loyalty rewards should be menu items rather than discounts, as customers will be more attracted to this type of reward than they will be attracted to discounts you might offer. 

Establishing a loyalty program is a simple, low-cost way to increase the number of times your customers return to your restaurant.  It isn’t difficult to administer, especially if you use cards that the customers can swipe each time they visit.  You will find that a loyalty program is a smart way to encourage repeat business, as well as a great way to offer free tastings of new menu items that might become available as your menu grows and changes. 

I have a new restaurant and want to focus on "first things first" when it comes to marketing. How do i do this?

The Importance of Satisfying First Time Customers

First-time customers have a lot of potential for any restaurant that is focused on effective marketing.  To begin with, first-time customers don’t know what to expect, so it is easy to impress them with small details related to customer service or food/service quality that other restaurants don’t provide.  Additionally, first-time customers will immediately compare your restaurant or services with other restaurants that are similar, so it is a good opportunity to surprise them with something that they might not receive from more established or chain restaurants.  

The appeal of the “new” is a strong human emotion.  In fact, when we experience something new that we haven’t experienced before, the simple “newness” of it is exciting within itself.  People enjoy breaking out of their routine or mold, even if just for a meal, and the enjoyment of that experience can be multiplied easily with a few simple things that set the experience apart from others.  

First-time customers are also more likely to share their experience with others.  Take, for example, the couple who decides to go somewhere new to celebrate their anniversary.  They will likely share their dinner date plans on Facebook or Twitter, including information announcing their anniversary.  They are also more likely to “check in” somewhere on FourSquare, or some other GPS enabled application.  This means that their post and “check in” will be announced to all of their friends on these social media applications, which becomes very effective (and very free) marketing for your restaurant.  

The expression “first impressions are the most important” holds true, especially when it comes to growing a customer base.  The first impression that someone has of your restaurant will be the main impression they take with them when they leave, and will color their opinion of your food and services despite how this impression might change over time.  If someone has a good first time meal experience at your establishment, they will always remember it, and will be more likely to return in the future—especially if their first time was to celebrate an important occasion in their lives. 

How Your Present Customers Can Increase Your Business

Restaurant Marketing 101 includes the understanding that the customers you have at your tables right now are the ones who are your best salespeople to draw in more clientele.  Their experience at your restaurant is something that you can be assured will be shared with others, including their friends, family, co-workers, and even strangers they meet who might ask, “where’s a good place to eat around here.”  

That is why it is important when trying to grow yourrestaurant business to focus more on your present customers than the customers you don’t have.  When you do everything possible to listen to their feedback, ask for their suggestions, stay in constant contact with them, and get them on your mailing list or loyalty program, you will find that your restaurant grows exponentially through their word-of-mouth reference.

One way to do this is through social media.  With social media communication, not only will you have a direct link with your present customers for valuable feedback and for advertising promotions—you will also have an easy method at your disposal for asking them to pass on the word to others in their social network.  Applications like Facebook and Twitter have made it incredibly easy to invite others to “like” a page or to “re-tweet” a promotion.  Making it easy for your present customers to refer you to friends and family is as simple as setting up a Facebook or Twitter page for your restaurant and passing along promotions or discount coupons through it.  

Another easy way to use your present customers to increase your business is to set up a loyalty program in which present customers will receive discounts or free food items after multiple purchases.  Loyalty programs encourage your present customers to return more often, ensuring that your tables are full on days that might otherwise be slow.  These types of loyalty programs and incentives are easy to implement and the return on them often triples business from your current clients, who will then have incentive to return more often to the restaurant that they enjoy visiting already. 

Should I use a loyalty program to increase revenue in my restaurant?

Snail Mail in 2012—Should Restaurants Even Bother?

When was the last time you received a handwritten letter, note, or other piece of correspondence via postal mail?  If you’re like most people, it has likely been quite a while.  In fact, “snail mail” is really a dying art.  With technological advances like email, texting, instant messaging, and even electronic cards or “e-vites,” most people no longer take the time or effort to send anything via postal mail.  

There are certainly pros to this.  Electronic mail is free and easy to send, especially when you have a large mailing list.  What once took businesses hours to do can now be done within a few short minutes, especially with database services that allow all communication and client contact lists to be streamlined in one easy software package.  These types of services have been proven effective in staying in constant contact with your customers and can be managed easily on a low marketing budget.  

However, it is important for restaurants to understand that while electronic communication is a great way to market to clients, the benefits of traditional mail in restaurant marketing shouldn’t be overlooked or ignored.  The primary reason you should continue to use traditional mail in restaurant marketing is the same reason that “snail mail” catches your eye when you receive it—it stands out.  

Most people’s email inboxes are full of mail on a daily basis, forcing them to sift through spam constantly.  Not only does this get annoying—it can become overwhelming.  For this reason, many people set their spam filters to keep out any mail that isn’t from close and personal contacts, which means that the email you might be sending for your restaurant’s marketing has a high likelihood of being unread or ending up in someone’s junk email folder.  

So don’t give up on the idea of traditional mail in marketing your restaurant.  While it isn’t something you’d want to send as often as email, it can be highly effective in making sure you get people’s attention.