May 3, 2016 | Customer Loyalty News

How Restaurants Can Use Mobile to Make Customers More Loyal

by  Margaret Link — Marketing at Thanx

Thanx CEO, Zach Goldstein, and Dewey's Pizza Managing Partner, David Igel, discussed how winning loyalty progams differ from the status quo. In order to retain and engage customers long-term, a loyalty program must add value — not additional steps and confusion — to the customer experience. Here's how Dewey's developed a restaurant marketing strategy bold enough to fuel growth, while staying consistent with their focus on hospitality and experience. 

Background: Dewey's is a premier pizza restaurant brand in the Midwest.

We had the pleasure of speaking with David Igel, Managing Partner of Dewey's Pizza, about how he selected a loyalty program that stayed true to the Dewey's brand. 

Dewey's is an upscale, full-service pizza concept with fresh, unusual takes on pizza (try "Ryan's Inferno" for a spin on buffalo chicken pizza). In addition to delicious pizza, one of Dewey's core values is — and always has been — hospitality. As their brand continued to grow and evolve, they wanted a better way to communicate with their guests. Providing amazing service and having a strong neighborhood presence is at the heart of how Dewey's differentiates their restaurant marketing strategy in a highly competitive market.  

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Beautiful brick buildings + delicious pizza = a winning combination

As they approached 23 locations, it became less feasible for David and the Dewey's management team to keep that "pulse" of what was going on at each location. They didn't want to lose the connection with their guests; gone were the days of being able to know exactly who every customer was as they walked in the door. David knew that he needed to figure out a scalable way to gather customer data in order to stay smart about Dewey's guests. That's when they realized that they needed a great loyalty program in order to retain these valuable customers. 

"After 18 years, we simply wanted to give back to our customers who had helped us grow our business." -David Igel

They wanted to know how much their customers were spending, how often they were visiting, what they were purchasing. They wanted to invest in a program that could support their growth while staying true to their roots: great pizza and world-class hospitality. They wanted to keep their best customers tied into their brand. 

"We saw huge value in developing a deeper understanding of [our customers]." -David Igel

The things is, Dewey's  isn't unlike most growing brands. Watch the webinar (available here!) to get the full story, but here are the most crucial takeaways for all multi-location business owners looking to scale their marketing operations, identify and retain their best customers, and create profitable lines of communication with their guests:

Point #1: It’s infinitely easier and more profitable to market to people who already know and love your company.

Modern customers are promiscuous, and loyalists are quite loyal. The importance of your loyal customers has never been greater. For restaurants (and other businesses) the majority of revenue is generated from a very active minority of your customers. However, 70% of your customers will visit once and never return

 

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Being able to successfully identify your best customers and act on that intelligence is the key to growing your business. David Igel mentioned that when Dewey's was a 2-location business, he knew most of his loyal customers by name. He was aware of when they had fallen out of their schedule of regularity and that knowledge gave him the ability to reach out to his best customers and cultivate those relationships. As Dewey's grew, this type of communication became impossible; David's time was split between multiple locations, and he was no longer able to "touch the tables" in the way he once was. However, David knew that it was critical for him to continue identifying these "VIP" customers in order to retain their business.

This lines up with what we're seeing across the industry: the importance of VIP customers cannot be overstated! 25% of customers make up about 65% of revenue at most restaurants. When a small group of loyalists comprises most of a company's revenue, the stakes are higher. That's why loyalty programs are so valuable for companies like Dewey's - they're able to identify and reward those customers who have a huge impact on their business.

 

Point #2: Loyalty programs must prioritize customer experience in order to work long-term; nothing that takes away from the experience can be tolerated.

Dewey's wasn't willing to sacrifice the dining experience in order gather data on their customers; for a company that prides itself on atmosphere and customer service, this was non-negotiable. David Igel mentioned that he wanted his guests to be able to live "in the moment", enjoying their food and the company of their friends and family— NOT rifling through purses and pockets, trying to procure their phones in order to "check in" or scan a QR code. 

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(How many of these plastic cards can you fit on your keychain? This is clearly NOT what Dewey's wanted.)

They needed something that was going to be simple for both staff and customers. Dewey's prides themselves on hospitality and experience, and they didn't want a loyalty program that detracted from their vision — they wanted a loyalty program that enhanced the customer experience.

However, they had a hard time finding something that matched their high standard of service. The traditional loyalty "solutions" on the market are fraught with hurdles for the customer (not to mention, I.T. nightmares for the merchants): plastic cards, punch cards, "enter your phone number here", "scan this QR code here", expensive hardware... it's no wonder the average consumer has 29 loyalty memberships, but 60% of them inactive. When you ask consumers to jump through hoops every single time they dine, they'll eventually stop engaging. 

This is one of the most powerful things for a company that is looking to balance their need for data and customer loyalty with their vision of the level of service in their restaurants. David inherently knew he couldn't compromise service, which is why he rejected the "traditional" loyalty program. Ultimately, a good loyalty program is one that makes it effortless for customers to participate and stay engaged

Point #3: Beware the "Silent Guest" 

We geek out on customer loyalty daily at Thanx, but it was David Igel who coined this concept of "The Silent Guest". Business owners: I'm sure you're familiar with this type of customer — they come in a few times, eat and leave, and provide businesses with zero feedback. They aren't the type of guest that goes out of their way to write a review, and when something goes wrong with their dining experience, they don't stick around — competition is fierce, and they've moved on to the next restaurant. 

This is incredibly dangerous to restauranters; one small mistake can cost you this customer, and you have no way to track that they've disappeared (let alone win back their business). For this reason, David is a huge fan of the Winback tool, where he's able to target lapsed customers and reengage them with relevant offers delivered directly to their mobile phones. Beyond the value of a highly-targeted restaurant marketing strategy, Winbackaddresses problem of The Silent Guest. 

 

Conclusion: Customer loyalty is a growth machine for restaurants, but ONLY if it's done right. 

Dewey's has been uniquely successful in the highly competitive pizza restaurant space because of a committment to building great relationships with their customers, even as they expanded beyond two stores in Ohio. From identifying their VIPs, to implementing programs like Winback, Dewey's has done a great job of making loyalty effortless for their customers. 

To watch the entire webinar, click here: How Restaurants Can Use Mobile and Data-Driven Marketing to Transform Customers into Loyal Brand Ambassadors. 

 

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