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Seven ways to run an effective loyalty program

Seven ways to run an effective loyalty program

Tim Brown, senior director, sales consulting for food and beverage EMEA Oracle Hospitality, shares the results of a recent survey conducted by the hospitality technology solutions company on restaurant loyalty schemes.

A loyalty program can deliver a number of important benefits to restaurants, pubs and hotels. It provides operators with a way to reward customers and encourage repeat business. It is also an effective, measurable marketing tool – by gathering details about your guests, such as their e-mail address and location or date or birth, you can target them with promotions to help grow your revenue.

However, today’s millennial generation is looking for more than e-mail promotions: they want frictionless, personalised service. To help food and beverage operators understand what guests are seeking in a loyalty program, Oracle Hospitality has conducted a global consumer survey to discover the essential ingredients for a restaurant loyalty program.

1 Set up a loyalty scheme
Not every restaurant or cafe has a loyalty program but there is a demand for them. If you don’t have one then it’s worth looking into. UK customers are more receptive to loyalty schemes than those in other countries. Only 6% of the UK population say they never join a loyalty programme, compared with 11% in Germany and 14% in the US.

2 Diners like getting something for free
Offering a free product, such as every 10th coffee free or a complimentary glass of champagne, is an effective form of loyalty in the UK restaurant industry. 71% of UK diners say free products are the most attractive rewards, compared with only 64% of people in France and 38% of people in Japan. 72% of UK customers also want a discount on every purchase, compared with 64% of people in the US.

3 Make rewards relevant and easy to redeem
The relevance of a reward is the most important thing for customers, followed by them being easy to redeem and use. A reward program should also be simple to use and easy to understand, as this is the third most important factor for people when choosing to sign up to a scheme. 30% of people will not join a loyalty scheme if the rewards are not attractive or relevant to them.

4 Make it mobile
An app that enables mobile payment is one of the most important aspects for a loyalty scheme among UK diners. Over half of customers aged 18-50 years old want restaurants to offer loyalty programs via a mobile app.

5 Offer something different
Customers have become tired of the standard loyalty offers that have been used by the larger restaurant chains in the past. Only 33% of UK customers say they would like a scheme to provide birthday and other celebratory offers, compared with 61% of people in Japan and 47% in the US.

6 Keep rewards active
Rewards expiring too quickly is the main reason for people leaving a program. The longer rewards remain active, the more likely customers are to take advantage of them.

7 Don’t get too personal
Asking for too much personal information can be very off-putting for people, although UK customers are more willing to part with this information than others. 22% of UK diners say that asking for too much personal data would make them leave or not sign up to a program, compared with 35% of people in France.

Oracle Hospitality delivers software, hardware and related services to customers in the hospitality industry. Information in this article is based on its report Recipe for Engagement: Essential Ingredients for a Restaurant Loyalty Program. Download the full report here