Day 38 – The Puzzle – Restaurant Loyalty – How To Drive Sales Increases

Loyalty marketing for your restaurant, let’s talk about a deeper WHY and HOW to use it correctly. 

First – Loyalty programs apply to a very small, but powerful segment of your customer base.  Research shows that only about 15% will become members of your loyalty program and within that group of customers 50% of the members will make the vast majority of the spending. 

Second – Your going to see a HUGE spike in signups when you start, massive momentum in months 1-3 and then THE BRAKES!  Loyalty programs early members are your best customers.  They are commonly called “early adopters” and the bad news you run out of them fast.  PLUS your staff loses excitement to get new signups and 

Third – The second point above leads to the biggest reason restaurant loyalty programs fail, lack of consistent traffic.  Your program is like a Ferrari, but just like every other car…IT NEEDS GAS!  At the end of this blog post we’ll talk about that more in depth. 

Forth & todays main topic – Loyalty programs should NOT be used to push discounts and promos.  It should be used to push your best customers to spend more money per visit and visit more often.  They should be incentivized to support you in more ways than other customers.  And COUPONS are not the right incentives.

The screen shot above tells a really cool story.  The right side of the image is a report dashboard inside of Repeat Returns Smart Offers system.   Smart offers are a segment of the loyalty program within Repeat Returns, and honestly one of most powerful parts. 

Smart offers are designed to take the very best customers and get this to take a VERY specific action.  In this case, a dynamic email was sent to a segment of the loyalty members.  

DYNAMIC EMAIL = This is an email sent to a list of customers that is DIFFERENT for each segment of customers. Meaning, this email had a segment of customers who typically spend under $30 and a segment that spend under $40.  The “spend bump” incentive that each of them saw was different, it was based off of their past. 

SPEND BUMP = The email for the customer that spends $30 would have said “When you spend $40 or more this week get double points.”  Whereas the email for the customer that spends $40 normally had the incentive bumped up to $50.  The idea behind this type of loyalty email is to get them to buy something on their next visit that they may not normally buy, like an appetizer.  That gets them to a higher spending thresh hold, which then gives them their “bonus loyalty points.”  PLUS you’ve now introduced a new menu item that you hope they really enjoy and start buying more in the future, which drives up your check averages. 

In the example above the Repeat Returns Smart Offer got 94 customers to visit that week (2 came twice) and $3,810.  These EXACT customers normally would have spent $1,700 on the same visits, but with this new incentive they now spent $2,121 MORE!!!!

That my friends is LOYALTY!  

We drove our best customers into the restaurant to spend more than they normally would and WITHOUT A DISCOUNT!

That $2,100 is aprox $1,500 in net profit to your restaurant. 

Now last but not least, I mentioned I’d talk about gaining more traffic to your loyalty program. I want you to imagine that this same restaurant had DOUBLE the members it currently does. Common sense says we would have gotten double the net profit.

That my friends is why you must have your 8 restaurant funnels running, so you can put gas in this Ferrari. 

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