How Technology Is Transforming Restaurant Loyalty Programs

By Nathan Sykes, Contributor

Back in the 1700s, it wasn’t unheard of for small business owners to distribute copper coins, or something similar, among their regular clientele. The tokens represented discounts on future purchases — and in so doing, they became some of the earliest loyalty programs.

According to a 2016 “brand loyalty report,” American individuals take part in a total of 6.7 loyalty programs at any given time. Restaurants and other food companies represent a significant portion of these memberships. But we need to take away two things from this number:

  1. Not all of these loyalty programs are “succeeding” in a way that’s measurable beyond “enrolled participants.”

  2. Restaurant loyalty programs might be leaving a lot of money on the table if they’re not taking advantage of modern technologies.

Here’s what you should know about modernizing your restaurant’s loyalty program.

Tech Makes Guest Loyalty More “Visible”

Tech makes restaurant loyalty programs more visible to guests

You don’t have to own a smartwatch to appreciate the appeal of “closing the rings” or “checking the boxes” or whatever other “gamified” mechanism gets people away from their desks and couches throughout the day. Your restaurant needs to make the process of earning loyalty rewards just as fun and accessible as playing a game.

How can technology make an intangible quality — loyalty — more visible for patrons and restauranteurs alike? It’s things like:

  • Restaurant-branded mobile apps that show meals purchased, dollars spent, and progress made towards known goals — like free appetizers and drinks.

  • Instead of a phrase like “Earn a free dessert with every 50 points earned,” customers can see strong visuals of what they’re actually working towards.

There’s more to know about creating a great loyalty program than just building the app and launching the program. Here are some other suggestions, along with how technology can help get it done.

Cryptocurrency or Points?

Should restaurant loyalty programs use cryptocurrency or points?

Household names in blockchain-based currencies, such as Bitcoin, have a significant number of lesser-known currency “forks.” These alternative monies sometimes abide by different control protocols. In other cases, they’re a way for companies and brands to issue “equity” to shareholders and loyal customers. Think of them as a kind of high-tech loyalty points program.

Of course, old-fashioned points are just as good, and they still provide an appealing source of encouragement for guests to walk through your doors again in the future. Whether you plan to build your points system on crypto technology or not, here are some reminders to keep in mind:

  • The points took too long to accrue” is the most frequently cited reason among Millennials who’ve quit a brand loyalty program. Remember not to string your customers along forever without a payoff.

  • Another common reason people quit loyalty programs is because they come to feel pestered by emails, notifications and constant calls to action. Be tasteful about how frequently you send messages — especially if your program uses a mobile app.

Customers want to know they’re working towards something that’s actually within reach. And they don’t want to get another unwanted hard sell every time they turn around. If you want to be more intelligent about getting customers to buy from you again, implement abandoned shopping cart reminders and send occasional emails when an item they’ve looked at goes on sale.

People want to earn points and rewards. But the tech you decide to use should make that process easier and less frustrating — not more.

Loyalty Programs Get a Boost from Mobile Payment Options

Mobile payment tech boosts restaurant loyalty programs

The current plethora of mobile payment options is a positive result of advancement and competition among big tech companies. Apple Pay felt like an inevitability when it was announced, but it seems like every other tech company and even retailers are launching “contactless” payments of their own.

Some of the implications for loyalty programs could be extremely lucrative. Customers often cite the “difficulty” of or the “many steps required” for completing a checkout online and especially on mobile platforms. In turn, failed checkouts mean missed customer attempts to make qualifying purchases in loyalty programs.

But retailers and brands that do the bit of footwork required to natively implement PayPal or Apple Pay checkout directly into their apps reap the benefits of having a one-stop location where customers are:

  1. Already logged in

  2. Already equipped, via their device, to complete a qualifying purchase

  3. Already aware of the prize or goal they’re working toward.

A Few More Ways Loyalty Programs Benefit from Technology

Given how much of a blank canvas mobile and web apps can be, you’re limited largely by your imagination. Nevertheless, you can remember these basic principles and advantages of building a loyalty program on a strong technology platform:

  • Most consumers prefer online dashboards and mobile apps over easily-lost punch cards and other loyalty tracking tools.

  • Some point-of-sale systems provide APIs and other tools for building in-house loyalty programs that eliminate a lot of the intermediate steps. When a customer pays their bill at the end of their meal, your system knows who’s making a purchase, their current rewards balance and whether they’re eligible for discounts or freebies, and how many points the current purchase is worth.

  • Mobile-first loyalty apps can be a great way to maintain customer relationships and communication. You may also consider incentivizing customers to use your app to report bugs, make suggestions or give feedback on your products or services.

  • Loyalty programs can be a treasure trove of customer insights and actionable data if you have a system in place that can organize and analyze it. Expect to learn about customer likes and dislikes and other meaningful patterns in their spending.

A great loyalty program built on technology is visible, accessible, fun to use, and, when it needs to be, a two-way line of communication between brands and fans. Your restaurant — or chain of restaurants — has a lot to gain by bringing your loyalty program into modern times.

About the Author
Nathan Sykes writes about how businesses are impacted by modern technologies online. To read his latest article check out his blog, Finding an Outlet.