marketing-strategies | 8 mins read

5 Fundamental Features All the Best Loyalty Programs Possess

5 fundamental features all the best loyalty programs possess 1647012801 7629
Archita Wagle

By Archita Wagle

What is Customer Loyalty?

Customer loyalty can be described as a consumer choosing a restaurant over its competitors. Customer loyalty is about liking the company products and trust in the brand. When a customer prefers a company's product, it is not easy to have them switch by offering better price or products. They are willing to spend more on the company product for the quality and service they know and trust. A study on customer preference found that 83% customers were loyal to a brand due to their trust in the brand.

What Good Does a Customer Loyalty Program do?

A company or a restaurant can decide to reward customers who decide to engage with them repeatedly via a Marketing Platform like customer loyalty programs. A company may give loyal customers points, rewards, coupons, early access to new products or perks such as free shipping via its customer loyalty program to keep customers coming back. A Loyalty Program is also crucial in providing information about customers' spending habits and choices.
Listed below are the benefits of opting for a customer loyalty program-
Customer retention- A customer loyalty program will make sure that a customer will keep coming back to the restaurant. According to statistics, 84% of interviewed customers said they will remain with the company if offered a loyalty program. A loyalty program also ensures customers are receptive to email marketing and rewards based loyalty schemes.
Brand loyalty- If a company offers perks like personalized rewards programs, gifts and incentives like free shipping, customers are likely to return. If the customers enjoy the benefits of the customer loyalty program, then they will refer it to others. Repeat customers bring in more revenue and will also advocate the brand.
Cost efficient- A customer loyalty program is an efficient way to keep customers coming back. It costs a company more to get new customers but repeat customers bring in sales and profits at a reduced cost. A loyalty program also increases customer lifetime value (net profit earned through a customer).
Promotion- Loyalty programs keep customers happy and then they will give good reviews on social media. A long term association with loyalty program customers will give a brand a competitive edge.

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5 Essential Features of a Customer Loyalty Program

5 essential features of a customer loyalty program 1647425965 7990

One way to create the best Customer Loyalty scheme that suits your unique business needs is to check out the various loyalty programs that have been implemented by other similar businesses. There are several key components to ensure that the rewards program you pick is the best loyalty scheme for your business.
Here are some key points to consider while creating your unique loyalty program-
1. Keep up with the tech- As per statistics, 61% of surveyed consumers said they would like a tech based loyalty program. There are providers who can set up a digital loyalty program for your business. This also makes it easy for a business to connect the loyalty program to a central access point and the customers are also not restricted to shopping at one location.
2. Opt for a points-based rewards program- A customer loyalty program should be easy to understand. Point based reward programs are the best customer scheme or loyalty program examples. A business can incentivise collecting points to urge customers to purchase more as data has shown that 66% will change their spending habits to earn points for a rewards program.
3. Keep tiered loyalty programs- The best way to engage a customer is to incentivise them to attain more benefits. A customer who has earned all rewards in a loyalty program may get bored and not engage any more. But if there are steps or tiers to reach, then the customer's interest is kept alive.
4. Don't just offer company products- When offering a customer loyalty program to your consumers don't just stick your company products as rewards. If you run a restaurant business, you may opt for reward ideas like tickets to food fest, special members discounts at affiliates, cooking lessons and other ideas.
5. Personalise the rewards program- Offering personalised rewards or experiences such as a free meal on birthday will endear a loyalty program to the customers. Data shows loyalty programs with high levels of personalization are 6.5 times more likely to gain more customer spends to maximize loyalty points.

5 Examples of Great Restaurant Rewards Programs

5 examples of great restaurant rewards programs 1647425966 8889

Any large or Small Business needs a good loyalty program that can help it retain customers and also gather data on their preferences to better their rewards programs. As we have already discussed the key points to keep in mind while creating a loyalty program, let us now look at different kinds of loyalty programs so that you can customise the best loyalty programs you need-
1. Points based rewards program- Customers can earn certain points for every dollar they spend and then they can redeem the points for free food or merchandise. Starbucks rewards can be an example of point based loyalty scheme where the customer earns 2 stars for a dollar spent and these stars can be redeemed like 50 stars can be redeemed for a hot coffee, hot tea, or bakery item.
2. Subscription rewards program- In this kind of rewards program, subscribers Earn Rewards for certain milestones. For example, Panera has a MyPanera+ Coffee club, which offers members unlimited coffee and hot tea for $8.99 per month but customers first need to join the Paneraloyalty program.
3. Promotional loyalty program- This type of customer loyalty program offers members rewards with expiration dates but they are not tied to specific spending behavior but can be offered as surprise promotions. Dunkin Donuts gives members of its loyalty program limited-time offers to try new items or increase sales during off-peak times.
4. Online Rewards program- Certain restaurants can opt to reward loyalty program customers when they order online by integrating online ordering with the POS system. Bandit Coffee offers rewards for customers placing orders online by offering a free order after placing five orders through the app.
5. Tiered loyalty program- This type of rewards program is used to create steps or tiers in the customer loyalty program. Each step or tier requires a certain spend by customers to get the benefits. Chick-fil-A offers a tiered rewards programs where each member of a particular tier earns different points for a dollar spent. Chick-fil-A even offers special benefits like the ability to gift points to friends and family, or donate a meal to a nonprofit organization.

5 Top Customer Loyalty Platforms for Restaurants

After discussing the benefits of implementing a customer loyalty program, let us now look at the top software in the market that support the loyalty programs and offer Loyalty Rewards to returning customers-
1. PlumPOS by Hubworks- PlumPOS is an app in the Hubworks store which provides a POS system that can create promotions and loyalty programs which can send personalized offers, discounts, gift cards and latest updates via newsletters, simplify online ordering and delivery, offer self-ordering and contactless payments and inventory management.
2. TouchBistro- The POS system offers TouchBistro Loyalty which has a customer relationship management (CRM) tool that allows you to create detailed guest profiles for everyone that signs up. The system also offers menu and table management, Cloud based reports and analytics and technical support.
3. Square- The software offers tools to view customers' points and reward history and provide a more personalized experience with their loyalty program. It allows customers to sign up at checkout by entering their phone number and provides free and paid POS options.
4. Toast- The POS software is well known for its loyalty program features where the customer can join in with a swipe of a credit card and also log in to check loyalty program progress. It also provides features like reporting and analytics, guest feedback and payment processing services.
5. Revel- The POS software offers a customer loyalty program which offers loyal customers exclusive offers and promotions by taking insights from loyalty program data. It also has tools like employee management, customer relationship management and reporting and analytics.

Online employee scheduling software that makes shift planning effortless.
Try it free for 14 days.

How to Select the Right Rewards Program for Your Business

how to select the right rewards program for your business 1647425966 8840

After discussing the benefits of opting for a customer loyalty program, let us now look at the steps to select the rewards program that suits your unique business needs.
Customer profile- Know who your customers are. Keep a track of how much customers spend and how often they spend. Track the profit off repeat customers . Get their feedback.
Establish goals- Establish your customer and target purchase goals at the outset. For instance, if a customer comes back every 15 days for repeat purchase, can you encourage them to buy every 10 days or get existing customers to buy new products.
Budget- Check how much is the average industry spend on customer loyalty programs and then finalise budget for your rewards program. Set aside separate budgets for managing repeat customers and gaining new customers.
Decide on customer base- Decide on the kinds of customers you want to include in your Loyalty Program by taking into account frequency of purchase, purchase volume, ability to purchase, how quickly the customer pays and how loyal customers are.

Customer Loyalty FAQs

What is customer retention?
Customer retention can be described as the metric used to track customer engagement and the resulting sales. Customer retention works to keep customers coming back by providing great experiences and value. Customer retention strategies are developed to provide and get more value from existing customers.

Which are the best loyalty programs?
The best loyalty programs that are currently on offer are DSW, Sephora Beauty Insider, Starbucks Rewards, Amazon Prime, The North Face and REI Co-op.

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