5 Loyalty Program Examples for Restaurants Just Starting Out
What are Loyalty Programs?
A Loyalty Program is a customized marketing program meant for targeted customers. It includes attractive benefits like cashback, points earned on the bill, donations, discounts, gift cards, and more. In return, companies earn a customer's loyalty, secure better sales, and consistency that helps with brand-building.
There are 4 primary types of loyalty programs-
1. Points program- A customer earns points for every purchase. They can redeem these points on their next purchase, or receive free gifts in exchange for points earned.
2. Tier system- It is a rank-based loyalty program where a customer's reward depends on their spending power. Based on this metric, they are placed into different membership categories, such as bronze, silver, gold, or platinum. Driven to climb the rank system, customers end up spending more.
3. Paid programs- This subscription model has customers shelling out a certain amount of money to gain benefits and access to VIP events, sales, and discounts. Customers can even Get Free gifts! According to market research, consumers end up spending 60% more on a brand once they avail themselves of subscription benefits.
4. Value programs- These programs aim to give back to society by donating some percentage of total sales to social causes. They do not offer rewards or points to their customers but spend a few dollars earned from sales on social causes. This is a great way to connect emotionally with customers, assuring them that the brand shares their beliefs and values.
The restaurant industry, with the help of loyalty software, is able to know its customers better by tracking their order history. By gaining detailed insights into customer behavior, restaurants can target frequent visitors. They can then offer them a Personalized Customer experience, with free gifts or meal vouchers. Software like ziployalty.com help build such personalized customer reward programs.
How Can Loyalty Programs Help a Small Business?
Besides offering customers a great ambiance and dining experience, loyalty customer programs are great marketing platforms. They typically provide access to exclusive events like menu and wine tastings, food festivals, discounted meals, and free merchandise in exchange for reward points. A study by Software Advice Business Model claimed that over 6% of restaurants globally recenlty adopted customer loyalty programs for the first time. They were probably inspired by restaurants that sailed through the Covid pandemic, only because of the support they received from loyal customers though their loyalty programs.
On the other hand, the average spend on customer loyalty programs by businesses that were already running such schemes has increased by 23%.
A small business with budget constraints may not have a huge marketing budget. But they can make a few changes to their existing loyalty program to further customer acquisition. Some of these measures are-
- Adoption of digital methods- Higher customer retention is only possible with better communication. By building a user-friendly mobile app you can solicit feedback, products reviews, launch a refer-a-friend scheme, offer loyalty points on orders placed through the mobile app, and provide special offers exclusive to mobile apps. This way, customers can make a purchase while on the move and still reap the benefits of patronage.
- Providing personalized experiences- According to consulting firm, Gartner, in the future, 80% of all revenue will derive from a small percentage of loyal customers. It's more important than ever, therefore, to increase customer retention. The best way to do this is by making better offers to your customers. By giving them discounts or special vouchers on their birthdays and anniversaries, you can make them feel important and special. The customer values such gestures and feels more connected to the brand.
- Train employees to sell loyalty programs- Sometimes, point systems may seem like a complicated number game to a customer if it's not explained to them in simple terms. Small businesses must provide special training to their staff, helping them understand the math behind the point system, so they can in turn break it down for their customers. A quick and easy chat, with an instant free redeemable voucher, can grab the customer's attention immediately, compared to a lengthy explanation that intimidates or bores the customer.
Loyalty Programs Change Consumer Behavior: Consumer-centric loyalty programs are the best marketing tool, and they're here to stay. A freebie on a gloomy day can lift a customer's spirits, or a chance to practice a good deed by making a donation. Loyalty programs do all this, and more.
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Ben & Jerry's Loyalty Program
A well-executed loyalty program can become a long-term revenue-generating Marketing Platform. It doesn't only guarantee a customer's devotion, but also helps the business contribute to the Success Stories of the food business. Having created one of the best loyalty programs in the industry, Ben & Jerry's is now a case study for other entrepreneurs looking to make a mark.
Although 2020 was a year of setbacks for the foodservice industry, Ben & Jerry's sailed through. The company increased its brand loyalty by 20% in the year 2020!
Their loyalty program definitely hits the sweet spot. It's not an incentive-driven, but a mission-driven program, driven to social welfare. The ice-cream company is known to donate huge sums of money to social causes from proceeds earned from the sale of a particular ice-cream flavor, for example. They also donate from their earnings on free cone days, when customers get free cones with their ice-creams.
Ben & Jerry's takes customer feedback very seriously. This is what drove them to produce vegan ice cream, after 28,400 supporters signed a petition asking the brand to make vegan ice cream for people who do not consume dairy products. Actions like this make customers feel loved by the brand, and they reciprocate the love in turn.
Originated from the streets of Seattle, Starbucks is a pioneer in serving exceptional coffee procured through sustainable practices. Today, the brand serves millions of people the exact same tasting coffee worldwide. The coffee brand has its presence in 83 countries, with more than 30,000 retail stores.
Starbucks' tiered loyalty rewards take the form of a gift card, known as the Starbucks Rewards Program. This is a successful loyalty model that offers freebies and festive discounts to its customers. With every purchase, the card gets a fresh infusion of loyalty star points, and on every dollar spent a customer can earn up to two stars. These stars can be redeemed for complimentary items on the menu.
Here's the break-up-
25 stars can get you a complimentary espresso shot, or an extra additional flavor for free.
50 stars can get you a complimentary hot brewed coffee, tea, or baked goods.
150 stars can get you a complimentary beverage, snack item, or hot breakfast.
200 stars can get you a complimentary protein box or a salad box.
400 stars can get you complimentary Starbucks merchandise or packaged coffee items, like coffee beans, packaged almonds, etc.
It has become part of people's daily routine to grab a Starbucks coffee on their way to work. Even the movies glorify this practice. This makes every Starbucks buyer a brand ambassador, flaunting their Starbucks-labeled coffee cups in hand.
Chick-fil-A-One Loyalty Program
Known for their chicken sandwiches, Chick-fil-A is the biggest fast-food restaurant chain in America with over 2,400 restaurants. In 2020, when many restaurants shut down permanently, Chick-fil-A pulled in $13.7 billion in sales. According to their representatives, the reason for such enormous sales can be attributed to the company's loyalty reward program. It offers benefits like convenient takeaways, free treats, and exclusive rewards to their best customers. What's more, the Chick-fil-A marketing team has been able to gain insights into their customer base from their use of the nifty Chick-fil-A app. This helps them offer their customers tailor-made experiences based off of that data.
Chick-fil-A offers a tiered loyalty program with four categories based on customers spending power-
1. Regular member- For every dollar spent, a customer receives 10 points.
2. Silver member- If the customer earns more than 1000 points in a year, they are eligible to earn 11 points on every dollar spent.
3. Red member- If the customer earns 4,000 points in a year, they are eligible to earn 12 points off every dollar spent.
4. Signature member- This is the most premium category, accessed after earning 10,000+ points yearly. Customers earn 13 points on every dollar spent. They are also eligible for perks, like choosing a favorite free entree on their birthday, and other personalized customer experiences.
Besides the point system, there are other perks that encourage customers to engage with the brand. These include birthday specials; the option for silver, red and signature members to transfer their reward points to family members; and so on.
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Chipotle Reward Points
Chipotle is one of the most well-known Mexican fast-food chains. It sources its ingredients responsibly, uses organic vegetables, avoids artificial colors, preservatives, additives, and so on. It's no wonder the brand is a favorite worldwide.
The Chipotle rewards program is one of the company's best marketing tactics, increasing sales and customers. Through the Chipotle app, customers can track their loyalty points and redeem them for a free gift. They're engaged from the moment they download the mobile app, receiving free chips and guac on signing up. The rewards keep pouring in, as they make more purchases through multiple platforms like online, in-restaurant, third-party pickup, takeaway, or through Chipotlane, their dedicated digital order pickup outlets.
Their loyalty program allows patrons to redeem their points for food, goodies, or to make donations.
- Food points- A customer can redeem points for free food and drink. 325 points can get them free chips and salsa, while 600 points can earn them a bottled drink.
- Swag points- By redeeming 2,500 loyalty points they earn $10 worth of vouchers. This money can be used to buy Chipotle merchandise.
- Donation points- The customer can redeem 485 points to make a $1 donation towards National Urban League, Farmlink, and other non-profit organizations.
Within a year of launching their loyalty program, Chipotle has managed 8.5 million enrolments. These numbers reflect the love and trust people have for the brand.
McDonald's Rewards Program
McDonald's has been encouraging customers to take their business online by offering them freebies for downloading their app and signing up for MymcDonald'sRewards program, the QSR's loyalty program. When placing an order through the app for the first time, customers can get free food like hashbrowns, vanilla cones, or a McChicken burger.
Based on every order placed through the app, customers will receive points automatically. These will be updated in their account. This point system can be turned into a tiered loyalty program with four categories, based on points earned. 1500+, 3000+, 4500+ and 6000+ points are the four benchmarks that contain various free items to choose from.
With thousands of fast food outlets and millions of customers around the world, the McDonald's mobile app gathers customer data in one place, providing the company with accurate and vital customer information in the simplest form.