5 Questions With: How to Use Loyalty Programs to Enhance Restaurant Customer Fandom
Some companies are great at turning their customers into superfans that continue to come back for more.
Loyal customers are loyal for a reason after all. They enjoy what the brand has to offer and this keeps them coming back for more.
I asked Britt Mills, Senior Director of Customer Experience at Mobiquity, to discuss how companies can design loyalty programs to build up a swarm of superfans.
She discusses the evolution of loyalty programs and the key role they play in attracting, retaining and elevating customers to fan status.
1. What are the latest trends with loyalty programs for restaurants?
I've seen many restaurants get creative with their loyalty programs lately in order to stand out among their competitors since it seems everyone has nailed down some sort of digital program at this point. This creativity has led to a trend of offering rewards that aren't necessarily coupons or discounted menu items. For example, Chipotle's latest update not only allows for faster point redemption for their menu items, but also customers can redeem rewards for clothing merchandise or turn the points to cash to donate to Chipotle's nonprofit partners. I think we'll continue to see unique options like these pop up as restaurants strive to be creative and keep those customers they earned during the pandemic coming back.
2. How would you say the pandemic has impacted loyalty programs?
The pandemic led to millions of customers downloading apps for online ordering and they ultimately joined loyalty programs when asked to create accounts for the sake of convenience - i.e. saving payment types, delivery details, etc. The rush to get apps to market didn't always allow for proper piloting and associate training to make sure the program met customer expectations and the benefit of being a loyalty or VIP member was not always delivered (i.e. priority service). Now, as we near the other side, and specific segments of customers are changing their preferred ordering and pickup methods, it is time to reevaluate your program structure and how to successfully deliver an experience that matches the perceived benefits of being a loyalty member. Of course, customers can only actively participate in a finite number of programs, so only time will tell which loyalty programs will be the true winners post-pandemic.
3. How would you describe a superfan and why are they so important?
When it comes to brands and loyalty programs, I would describe a superfan as a customer who is consistently active across your touchpoints and who meets a certain spending threshold.
These superfans are so important because you have sufficient data to define behavior patterns and they should be a centerpiece to your customer experience and marketing strategy with a goal of creating more 'look-alike' customers to fit this persona. It is important to identify these customers and engage them in various CX activities to validate your roadmap and various initiatives. Having them participate in journey mapping activities, user research and design validation is key.
4. What kind of offers are you seeing as being effective and how can restaurants go beyond the "coupon" mentality?
Restaurants have to not only put themselves in the customers' shoes to figure out what offers are effective but create a level of customer experience maturity to bring them into the process. With so many loyalty programs out there these days, each has to offer rewards that are valuable and achievable while also standing out among the rest of their competitors. Basic offers that are effective include instant savings or easier ways to earn points. This is because customers don't want to have to buy 20 sandwiches at a shop before seeing any sort of return. Additionally, restaurants have to get creative with how they are rewarding their customers. They've come up with enticements such as double points if customers order online or if they leave a review on Yelp (a win-win). By having a wide variety of ways to earn and spend points, customers are more likely to see the value of joining these programs. Just make sure your points structure and methods of earning align to your brand promise.
Customers want more than just a random product coupon, they want rewards that reflect their habits and preferences. For example, if a customer always buys a medium vegetarian pizza, they likely won't be interested in earning a free meat topping. But, if the pizza place utilizes personal rewards, the customer will likely come back again and again if every sixth vegetarian pizza is free. Enhancing the convenience aspect and ease of use is also another benefit we see customers craving. Expedited delivery options are a great example of this.
5. How can restaurants best use loyalty apps to expand their existing customer base?
We've seen recently that restaurants are putting QR codes in the windows of their businesses. This gives potential customers a discount code or directs them to the loyalty app quickly. This is a great way to attract new customers as they pass by on the streets and give them a quick perk just for signing up. In addition, restaurants can add a "refer a friend" benefit to these programs. Before technology, people were so used to referring friends via word-of-mouth to their favorite restaurants, so now we're seeing restaurants reward customers for their free promotion by adding discount codes and more as their friends sign up.
Bonus Question: Are loyalty apps really just for the big brands or can independents make them work as well?
Customized apps can be more costly, so we typically see this strategy unfold in larger companies. However, there are some plug-and-play solutions that smaller businesses can use. By utilizing a pre-created app, these independent establishments can quickly launch a loyalty program and reward their local customers. Whatever the case, it is important that you have an achievable strategy that allows you to scale, measure and pivot when needed.