Loyalty, factor success for restaurants

Loyalty is now key to success. And the restaurant industry is no exception.

 

Loyalty programs in the restaurant industry are becoming increasingly popular and sought after by consumers. Over the past few years, our team has seen significant growth in the number of new programs in the industry. Many new restaurant programs have been created while others have been revamped and improved.

While this trend is very pronounced in the U.S., it is also happening here in Canada. In fact, in our annual LoyalT 2021 Canada-wide study, four new restaurant programs were added to the analyzed list: Pizza Pizza, Panera Bread, Chipotle and Domino’s. In five years, the number of programs evaluated in the sector has increased from 2 to 12.

Many restaurant chains have realized that a loyalty program and the use of customer data must now become a cornerstone of their business strategy.

This growth can also be seen in the resources and technology solutions available to restaurant owners. On one hand, several partnerships with delivery companies (UberEat, Skip the Dish, DoorDash, Tacit, etc.) can be developed. On the other hand, mobile applications offer more and more features that improve the customer experience and promote engagement: order preparation tracking, notifications, choice of options, allergy management, payment, calories calculator, etc.

Today’s consumers are convenience-focused and digitally savvy — and those key characteristics influence how and where they choose to dine. Loyalty program usage is strong, but consumers’ interest in participating in such initiatives may be mitigated by how easy participation is and whether find the overall ordering process frictionless. – Digital Divide: Minding the Loyalty Gap

Perceived generosity

Restaurant programs are perceived to be more generous than those in other industries, retail being an example. Remember that the notion of generosity is very important in loyalty. The LoyalT study showed in 2021 that there was a direct correlation between the perceived generosity of the program and the ability of a program to modify the purchasing behavior of its members (more frequent visits and annual purchases).

In addition to being very generous with rewards, restaurant programs are also very effective at creating engagement with their members. Various engagement tactics and strategies match perfectly with the restaurant industry:

• Games, contests or quizzes
• Personalization of orders
• Gamification
• Personalized offers
• Content strategy
• Mobile application with multiple functionalities

Discover: 6 restaurant trends

Profitability and success guaranteed

Despite the last two years of pandemic, investing in loyalty is a sign of success for restaurant owners.

The majority of well-designed restaurant programs are proving to be highly profitable according to program data we have developed as well as recent articles analyzed from the United States.

The tremendous success of loyalty programs at restaurants like Starbucks, McDonald’s, Panera Bread, Chipotle and Taco Bell prove that investing in loyalty pays off big. And it’s worth noting that this success can just as easily be achieved by smaller restaurant chains; even a 5 or 10 restaurants operations can benefit from a loyalty program.

Generally speaking, as the infographic below demonstrates, loyalty programs are very effective in :

• Generating additional visits
• Increasing the average bill
• Increasing total revenues

Text transcript of the infographic Loyalty as a success factor in restaurants

• The most requested feature from restaurant customers is a loyalty program
• 43% of customers are more likely to patronize a restaurant that offers a loyalty program
• 57% of restaurants in the U.S. offer a loyalty program
• 64% of Americans are members of more than one restaurant loyalty program
• Members of restaurant loyalty programs spend nearly 2X more monthly than non-members
• 61% of millennials and 63.5% of Generation Z are restaurant loyalty program members 
• 60% of fast-food program (QSR) members use the mobile app. That percentage is 50% at table service restaurants
• Starbucks Rewards members account for 51% of the banner’s total sales and spend an average of 21% more than non-members
• MyMcDonald’s Rewards members visit 10% more frequently than non-members
• 50% of Panera Bread’s transactions come from loyalty program members
• Chipotle’s membership increased by 40% in 2021
• Taco Bell members spend 35% more annually than non-members

 

You would like to know the profitability of a loyalty program for your restaurant chain? Contact us, we will present you our approach and how we can help you!