Customer loyalty programs are available in a ridiculously high number of businesses now — grocery stores, clothing shops, and practically anywhere else you can think of. They’re also hard to avoid, with cashiers asking about your loyalty card every time you try and check out. But the thing is: why would you want to avoid those programs? They can earn you free stuff, and who doesn’t love free stuff?

Businesses implement these programs because they lead to more customer interaction with the business, a deeper customer connection, and ultimately, more business revenue for the company. Customers enjoy getting something back whenever they shop, so businesses with loyalty programs can have a competitive advantage over those that don’t.

Restaurants are no exception to the overall business loyalty program craze. Practically every major restaurant chain has a mobile app now, and they all come with built-in restaurant rewards programs to incentivize customers to purchase there more often, and spend more money when they do.

There’s no real reason for a restaurant to not have some sort of loyalty program built into their business model. Let’s go over a few reasons why.

Increased Customer Engagement

A customer gives a 5-star review on their phone

A restaurant loyalty program gives your business more opportunities to interact with your customers. For the most part, a restaurant’s customer interactions are simple and short — the customer comes in, the server takes their order, the customer receives their food, eats and then leaves. That’s just for full service restaurants. Quick-service restaurants or restaurants with a high volume of takeout or delivery orders have even less chance to interact with customers on a one-on-one level.

There are opportunities for great customer service in a normal restaurant setting, like employees chatting more with customers or managers coming out to ensure that everything is going well with customers, but when a restaurant is serving dozens or even hundreds of customers every day, those extra interactions just aren’t feasible.

Rewards programs can help your restaurant make up for that lack of in-store interaction by allowing you to do it through the program. Many rewards programs also serve businesses as a data collection tool, allowing you to keep track of what food items your customers order the most often. With that information, you can send out personalized promotions and deals to customers on the items they love the most.

For instance, if a customer orders chicken parmesan just about every time they come into your restaurant and they use your loyalty program, your loyalty program’s software recognizes their tastes. It can then automatically send them a 10% off reward for chicken parmesan.

Obviously, a customer is more likely to make a purchase if you offer them a deal on an item they like to order anyway. But beyond that, if a customer feels like the restaurant is paying attention to their tastes and catering specifically to their needs, they’re more likely to continue coming to that restaurant.

Increased Revenue

A visual of a bar graph increasing on an iPad

A study found that up to 70% of business sales come from repeat, loyal customers. That’s why it’s so important to connect with your customers and keep them coming back.

In 2013, Starbucks began a customer loyalty program and saw a 26% rise in their profits. A 2016 retail survey also found that, if all other factors were equal, over 70% of consumers would prefer to shop at a business that had a loyalty program. While this survey doesn’t refer specifically to restaurants, the ability to receive discounts or rewards can be a strong factor for customers in any industry.

Having more loyal customers can also increase the amount of word-of-mouth referrals your restaurant gets. If someone really likes your restaurant and feels like you do a good job of catering to your customers’ needs, they’re far more likely to tell their friends about your business.

Studies have shown that 86% of consumers engage with brands that they’re loyal to by spreading the word about them, and at least 92% trust verbal recommendations from acquaintances more than they trust any other form of marketing.

This means that not only do loyalty programs help you keep your repeat customers coming back, but they can help bring in new customers who might not have tried your restaurant before.. Restaurants often run on razor-thin profit margins, so raising revenue in any way possible is a big win for the business.

Several Ways To Implement Programs

A loyalty program card

There’s no one-size-fits-all loyalty program for restaurants to implement. Especially if you’re running a smaller restaurant, running a customer database with personal data analytics (or even paying a third party to run it) may cost too much to be feasible for you. That doesn’t necessarily mean that you just can’t run a rewards program at all.

Elaborate, data-collecting points and rewards systems can be a great tool for large businesses that can afford to invest into them. But even a smaller-scale, more rudimentary loyalty program can be beneficial — it doesn’t even have to be run digitally.

Many businesses will offer customers small stamp cards that the restaurant can stamp every time the customer visits, or when they purchase a specific item. Once the customer gathers enough stamps, they can turn in the card for a free item, and then start a new stamp card.

For instance, a sandwich restaurant may give a customer a stamp every time they purchase a sandwich. Once the customer racks up 10 stamps, the shop gives them a free sandwich. A system like this wouldn’t require any sort of digital infrastructure, or even any complicated design — just a card with your restaurant’s logo, and spaces for stamps.

Restaurants could also implement more basic email lists that customers can sign up to, and then receive discount offers through email. This method of loyalty program doesn’t require any physical cards, but email lists are relatively simple and inexpensive to implement.

Large, complicated restaurant loyalty programs can be helpful, but especially if your food and your service are great, they’re not necessary to give your customers that extra incentive to come back. Something simple can serve just as well.

Conclusion: Loyalty Programs Can Keep You Competitive

Especially with so many other places adding restaurant loyalty programs to their arsenal of marketing tools, implementing one into your restaurant can help keep your business competitive. If customers have several options to go out to eat and earn rewards, restaurants that don’t offer any loyalty incentives may seem like they offer customers less value.

Even if you can’t afford to implement some grand system into your business, just adding a simple program can show your loyal customers that you care about and value their business.