loyalty programs

Understanding loyalty programs in the pandemic age

Several key lifelines emerged for restaurants and other foodservice operations during the worst of the pandemic, from online ordering to curbside pickup and delivery and contactless payments. Another prominent trend was recognition of the importance of loyalty programs.

Loyalty programs not only create a lasting connection between patrons and a restaurant and/or brand, but they also provide tremendous and priceless insights into guest behaviour and preferences, something that has become even more valuable since the onset of the pandemic.

Paytronix data shows that most loyalty programs consistently boost visits and spend by 18 to 30 per cent per enrolled member.

A new report from Paytronix has assessed how restaurants and other brands shifted their approach to loyalty schemes in 2020. The report examined trends across the loyalty landscape, including those involving visits, spend, member demographics, and program types.

Chief among the conclusions were:

  • Loyalty members spent on average six per cent more than non-loyalty members over the course of 2020
  • For eight months of 2020, the top 10 per cent of loyalty members accounted for more than half of all loyalty spend at their favourite brand.
  • Loyalty programs are still most popular with people aged 56-75, although that proportion is shrinking while others, particularly Gen Z (ages 16-25) are growing.
  • Gen Z and Young Millennials (ages 26-35) seem to value loyalty programs the most, enrolling in the programs even if they aren’t able to visit as often or spend as much as more established consumers in older generations.
  • Brands specializing in ice cream and coffee had the most success in 2020, seeing average increases of seven per cent in visits and 26.5 per cent in spend.

RELATED: Consumers demanding more ordering and loyalty options

The report also found that the Bankable Points model took on new life as the most popular Core Program model of the year. That model, notes the report, which now accounts for 31 per cent of all core programs, offers more customer autonomy than any other, including flexibility on when and how rewards can be redeemed. However, the Automatic Conversion model remains the most common core loyalty program type.

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