Everyone loves free things, and customer loyalty programs give customers exactly that. With loyalty programs, optimal customer retention is possible. Technology such as loyalty apps and loyalty software have grown in popularity in recent years. Most popular retail stores have loyalty programs, such as Kohl’s and Nordstrom. However, loyalty programs are rare in restaurants, especially if they are upscale. Restaurants need to draw in and retain customers, and what better way to do that than to implement a loyalty program? 

Loyalty programs have many benefits for establishments. For one, they help forge a connection with the customers. While many customers visit for the food itself, they feel more valued when the restaurant takes extra steps to show appreciation. Loyalty programs provide exclusive deals that make customers want to return. Additionally, special deals for each customer, such as birthday coupons, personalize the experience even more. Restaurants who give customers a unique experience through loyalty programs have an edge over competitors. 

With increased customer retention comes more revenue as well. Since customers have to make multiple purchases at the establishment in order to obtain the deal, they will end up spending more. According to 2016 Accenture Initiative research, per year, revenue from loyalty members is 12 percent to 18 percent higher than that from non-loyalty members.  

Besides rewards, restaurants can send information about new dishes or offers that persuade customers to make additional purchases. Regular customers, satisfied with the loyalty program, are likely to refer the restaurant to others or bring in new customers. All of these effects increase revenue. 

This word-of-mouth referral is an effective marketing tactic that also aids in establishing the brand’s identity. A good loyalty program creates more loyal customers, who then share the restaurant and boost its popularity.  

Restaurants can also engage in targeted marketing tactics with loyalty programs. One way to do this is to have customers fill out a profile that asks them for their preferences, spending habits, age, and more. With this data, restaurants can provide specific deals to certain groups of customers. For instance, if a customer lists pasta as their favorite food, a restaurant can give them a discount on a pasta dish of their choosing. 

Loyalty programs can take a lot of planning, money, and time to craft. However, the effort is worth it; the customer experience is the most important aspect of dining, and restaurant loyalty programs ensure that each customer feels valued.