Apr 24, 2017 | Customer Retention Strategies That Work

Guide to Restaurant Loyalty Technology — How to choose a loyalty program

by  Margaret Link — Marketing at Thanx

Loyalty programs can operate as the central nervous system for your brand — collecting data, automating marketing, and gauging customer satisfaction. With so many different types of loyalty programs out there, how do you decide which platform is right for your brand? Consider these four points as you narrow down your restaurant's loyalty technology search.

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Customer retention is arguably the most powerful tool in a marketer's arsenal: when nearly 70% of revenue comes from your top 25% of customers, it pays to invest in building loyalty among your top dogs. As a result, the loyalty market is saturated with all types of technology solutions trying to address this profitable group of customers. From the old-school plastic loyalty card to the POS-integrated hardware, restaurants presented with a solution to fit each and every need for your program.
As restaurant operators begin to think more seriously about implementing a customer loyalty platform, there are a few ways to determine which solution is best for your staff, your customers, and your brand. 

Don't forget to ask yourself these questions in order to narrow down your company’s loyalty search and find a solution that both your customers and employees will love. 

 

1. How important is customer experience?

When designing a loyalty program, customer experience should always be the priority — after all, a loyalty program with a poor user experience simply doesn’t get used.

However, most loyalty programs fall ridiculously short in this regard —that’s why most Americans are members of 26 loyalty programs, but only actively use about 10 of them. If you could choose two words to describe how customers see your program, the words should be synonyms of “effortless” and “delightful”.  Any type of program that introduces friction into the user experience ultimately drives customers away: Scanning an app, entering in a phone number, or having to remember an additional “loyalty card” is a recipe for failure. Anything that makes the customer do extra work will not survive long term (remember this: humans are lazy. Your customers are no exception).

2. How much do I care about customer data?
The next priority is collecting customer data that you can actually use. Great customer loyalty programs create complete data profiles of your customers: recency, frequency, spend, and lifetime value are a few things that business operators aim to understand about their guests.

Another thing to note is the QUALITY of the data you're collecting. Data in pieces isn't worth acting on, and most loyalty programs can only provide incomplete customer data profiles. With loyalty programs that require customers to take action every time they transact (scanning QR codes, interacting with hardware, or giving a phone number), customers inevitably stop interacting at some point. Maybe they're in a  rush, maybe the hardware is malfunctioning, maybe the front-of-house staff doesn't know how the program works. Whatever the breakage, the point remains that when loyalty programs aren't collecting the complete picture, it's nearly impossible to send the right message to the right person at the right time.

"Data in pieces isn't worth acting on, and most loyalty programs can only provide incomplete customer data profiles."

 

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3. How am I communicating with my customers?

Once you have customer data, that's just the first half of the puzzle: to make it useful, you actually have to use it.

Customer data can be used to send highly relevant messaging to customers. When your customer loyalty program prioritizes delivering you actionable data, you can have access to information that makes it simple to run powerful communication campaigns (like bringing lapsed customers back in, or sending timely offers and messaging to VIPs). 

Perhaps most importantly, customer data can also help brands better serve their VIP customers, which for most brands represent a significant portion of revenue (for restaurants, retailers, and car washes, typically 25% of your top customers make up almost 70% of revenue). Reaching out to VIPs and keeping them loyal is the most cost-effective way for brands to maintain their base of revenue. Without customer information, there's no way to identify your VIP customers, or to know when these high-value customers start “churning”.  

For example, customers who used to be loyal but are at risk of churning should automatically be receiving outreach to bring them back in (after all, it’s 7X more cost effective to drive an incremental visit from an existing customer than it is to bring a brand new customer in). Customer data makes it even easier to drive more business from your existing customer base. 

In addition to transaction data, collecting customer feedback data is critical for brands who priortize customer experience. Restaurants who use Thanx automatically ask for feedback each time a customer makes a purchase (as detected by the customer swiping their credit card), surveying the customer with Net Promoter Score (more info here) directly on their mobile phone. As a result, merchants using the Thanx platform receive more feedback than any other loyalty platform.

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4. What’s the resource commitment to running this program?

A great loyalty program is as elegant as it is simple. So many loyalty programs make it hard for businesses to run them smoothly. From implementing additional hardware at the POS, to the complex integration across multiple restaurants, to training staff on complex redemption methods, to manually pulling data and trying to interpret it… many customer loyalty programs are simply too complicated to use effectively.

A great loyalty program is as elegant as it is simple. 

While effortlessness on the customer side is key to users signing up and staying engaged, effortlessness on the merchant side helps the program generate real measurable revenue.

To this end, Thanx doesn’t need POS integrations, clunky hardware, or require data scientists to crunch your numbers. Your merchant success manager walks you through how to use your dashboard, and then you’re off to the races with automated marketing programs, unparalleled business intelligence, and happy customers. Now THAT’s effortless.

Want to learn more about Thanx? Talk to us today:

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Want to learn more about building a customer loyalty program? Check out our resource page here: 

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