How a Personalized Loyalty Program Can Increase Restaurant Sales

Restaurant owners can analyze the data gathered from their POS system, including buying trends and customer demographics, to build an effective loyalty program that will resonate with customers.
By Mo Chaar, Chief Commercial Officer, Givex - 8.2.2022

Following the peak of the COVID-19 pandemic, customer loyalty has never been more important for food service brands, especially those looking to boost revenue and speed up post peak-pandemic recovery. An extra 5% of customer retention can increase profits by 25 to 95 percent, and it costs five times less to keep a current customer than to land a new one.

What’s more, loyal customers spend more, with 15 percent of customers who are loyal to a brand generating anywhere from 55 to 70 percent of that brand’s total sales. Restaurants not tapping into these opportunities to strengthen customer retention and optimize marketing are leaving money on the table, which is why loyalty programs are a must-have in today’s restaurant landscape. But operators need to have the right technology before successfully launching a winning loyalty program.

Utilize a Data-Driven POS to Create a Loyalty Program

87 percent of Americans are willing to give up personal data to get more personalized rewards and brand experiences. Thankfully, an omnichannel POS system constantly captures valuable customer data — including buying trends, demographics and average spend per sale. Restaurant owners can then analyze the data gathered from their POS system, including buying trends and customer demographics, to build an effective loyalty program that will resonate with customers. A successful loyalty program is simple, streamlined and straightforward, making it easy for customers to keep coming back time and time again while also saving them money.

Restaurant owners can incentivize customers to use their loyalty program to receive special offers and discounts if they order directly through the restaurant’s online ordering portal. Utilizing their loyalty program in this way gives the restaurant owners greater access to new customers that they may otherwise lose engagement with on third party delivery platforms.

Leverage Real-Time Data to Maximize Revenue

While loyalty programs create a direct path to increased sales and higher customer retention, they also offer an opportunity for restaurants to hone their understanding of their customer. Restaurant owners should use loyalty programs to ensure that they continually offer promotions and products that attract and resonate with their target customer base. If owners notice a drop-off in sales, it may be time to tweak the program and offer new incentives to bring back customers who may have begun to falter.

Remember: loyalty isn’t one-size-fits-all. For example, while a points-based program may work for some brands, others may find that customers respond best to discounts on top-selling menu favorites or free add-ons during certain hours. While it may take a few attempts to find the program that works best, restaurant owners will benefit in the long run and walk away with an in-depth understanding of their specific customer base.

Target Top Customers With Personalized Rewards

When it comes to retention, restaurant owners should keep a close eye on their top customers in particular and ensure that they are crafting enticing promotions to keep them coming back. Recent polling shows that 75 percent of consumers favor companies that offer rewards, and 56 percent of customers stay loyal to brands that provide them, so it’s in a restaurant’s best interest to capitalize on this trend.

Monthly newsletters and e-blasts, for example, provide a simple and effective way for restaurants to share their newest offerings with VIP customers and ensure that loyalty members are always the first to hear about exciting new promotions or limited-time offers. An effective loyalty program allows for a conversation between a restaurant and its customers to not only share news of exciting menu additions but also to receive feedback from valued customers.

Powered by POS data, a loyalty program is one of the most effective tools a restaurant can use to increase overall sales while allowing customers to build a stronger sense of connection with the brand.

Since joining Givex in 2007, Mo Chaar has helped the company expand its North American footprint. He began his tenure as a Business Development Manager before becoming Vice President of Sales for North America, and then moved to his current role of Chief Commercial Officer. In this role, Chaar oversees commercial strategy and development worldwide in addition to managing the sales teams within North America. His experience in gift card, loyalty and POS has played a pivotal role in the success of some of Givex’s largest partners. Chaar received a Business Administration Diploma from Sheridan College and prior to joining Givex, served as a Location Manager for Jiffy Lube International. Givex is a global cloud-based operations management solution designed to streamline business efficiencies and generate valuable and actionable customer data. Since its founding in 1999, Givex has provided operational intelligence across a wide variety of industries, from restaurant and retail to hospitality and the service sector, offering a fully integrated suite of customizable products, including gift cards, loyalty, point-of-sale (POS) and analytics.

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