3 Ways a Loyalty Program Can Boost Your Restaurant’s Revenue

By Brad Davis, Contributor

While not all loyalty programs are created equal, a well-structured loyalty program can be highly effective in turning you empty tables into full ones.

A loyalty program aims to encourage repeat transactions by rewarding customers for returning time and time again.

And it works… 

The 2018 Bond Brand Loyalty Report revealed that:

  • 70% of consumers are more likely to recommend a brand that has a good loyalty program

  • 77% of consumers say they’re more likely to stay with a brand with a good loyalty program

  • 63% of consumers say they’re prepared to modify their spending habits in order to maximize the benefits of a loyalty program.

However, here are some of the less obvious ways in which a well-designed and well-maintained loyalty program can help boost guest retention and increase your restaurant’s sales in a big way.

Online Reviews & Social Media Sharing

A well-structured restaurant loyalty program can boost online guest reviews.

Most restaurant owners are well aware that diners are increasingly turning to guest reviews from OpenTable, Yelp and TripAdvisor in order to decide where it is that they’re heading tonight for a drink or a meal.

In fact, these days more than half of all diners read online reviews before deciding where to go out for a meal, and shifting your marketing to cater for Millennials is increasingly important. 

With that in mind, those same restaurant owners are (hopefully) also aware that it only takes a handful of dissatisfied customers leaving bad reviews on these social media channels to severely damage your restaurant’s reputation and dramatically reduce your business.

However, a good loyalty program can have a drastic positive effect on your online customer reviews. If your existing guests are enjoying the occasional free drinks, upgrades or discounts off their meals, why wouldn’t they rave about it to their friends, family and colleagues? 

Boosting Your Restaurant’s Slow Periods

Restaurant loyalty programs can boost slow business times.

 The same way that bars often host quiz nights on Mondays or Tuesdays to get bodies through the door on those slower days early in the week, loyalty programs can be utilised in the same way.

By having a digital loyalty app that guests sign up for with their name and phone number or email address, you can send automated push notifications to all your restaurant’s loyalty members on slow days along the lines of “Come in this Tuesday afternoon and enjoy a free side with any drink purchase!” or even just quiet periods of the day, such as “Swing by tomorrow between 10am and 2pm for a half-price meal!”

These short, sharp messages achieve several things – they offer good deals that are likely to entice people to come in during slower times. It’s also tightening your relationship between brand and the guest; you’re getting in touch with them directly via their device, you’re addressing them by first name, and you’re making them feel special. 

Understanding Your Guests (and Giving Them What They Want)

Data mining from restaurant loyalty programs can help boost marketing efforts.

As a restaurant owner, a well-structured loyalty program gives you an invaluable insight into your customers’ habits, preferences, and general consumer behaviour.

Every time they buy a meal or a drink, or even interact with your brand via social media, this all gets logged in your digital loyalty program – when the transaction was, what they bought, how much they spent, etc.

In turn, this allows you to see how often any given guest comes in, what days they typically eat at your restaurant, what menu items they like, and so on.

Zoom out even further, and all this data allows you to see which of your meals are the best sellers, which beers sell better at which peak times, after how many transactions are guests losing interest and coming in less frequently, and so on…

This information is invaluable, as you can use it to make adjustments within your business that reflect what your guests want.

There are Plenty More Reasons!

While we hope the points mentioned above illustrate the importance of implementing a loyalty program into your restaurant’s business model, these three key points barely scratch the surface of the ways in which a loyalty program can be used to boost your restaurant’s sales.

As loyalty programs are evolving into progressively more advanced tools for customer retention (and to a lesser extent, customer acquisition) they’ve become increasingly essential for any restaurant looking to stay ahead of its competitors.

Brad Davis headshot

About the Author:
Brad Davis is an Australian copywriter who writes content for various agencies and publications, including Stamp Me Loyalty, which provides digital loyalty app solutions for businesses of all shapes and sizes around the world. You can view Brad’s portfolio here.