loyalty program

Getting your loyalty program up to date

With the continued inflation and restaurant costs, does your loyalty program still offer value to your customers and make sense for your business? As your customers’ and your restaurant’s needs change and evolve, so, too, should your loyalty program. And while those changes are not always well received initially, it’s important for restaurants to maintain their margins while managing their members.

If you are considering making a change to your loyalty program, there are a few steps you can take to make the transition more seamless.

Communication

Many loyalty programs have gotten a makeover in recent years, adapting to a model that maximized margins better, but some have been met with backlash by members. In 2022, Starbucks upped the requirements for the number of stars it took to earn rewards, and with over 16 million members, the change was unfavourably received. Dunkin’ Donuts had a similar experience in 2022 when they adjusted their program to give members more choices but changed the way rewards were earned. This type of negative reaction often deters restaurants from making the changes they need to protect those margins, but the key is communication, transparency, and the knowledge that this backlash is often temporary.

Value

Part of the issue of “right-sizing” your loyalty program may be that the perceived value is diminished, angering customers and discouraging them from participating in your program. This can be addressed by really zeroing in on value, offering your guests a more personalized experience, extra points for a limited time, early access to promos, the opportunity to enter into a tiered program, and more. Your program has to fit the needs of your business and can certainly up your profitability, but the perceived value needs to stay high for maximum customer buy-in.

RELATED: How can you boost enrolment for your loyalty program?

Data

Tracking the performance of your program will allow you to make adjustments that make sense. Paytronix recommends using these 6 key performance indicators (KPIs) to analyze the successes and opportunities for your loyalty program: penetration rate, conversion rate, enrollment, visit frequency, retention, and average cheque. One of the best benefits of your loyalty program is that it provides real customer insight you can use to make decisions and tweak your program so that it performs at its best for your restaurant and for your members.

Your loyalty program should be a win-win, but that does not mean that you can just set it and forget it.  As customer preferences change and the industry evolves, it’s worth the time and effort it takes to take a look at your program and adjust it where needed so it encourages repeat visits and customer loyalty over the long haul.