Pro tip: If you want to go a step above this, your loyalty program can reward existing customers for referring new customers to sign up.
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Your customers are the ones that keep your doors open. They were the ones who went out of their way to support you during the pandemic and lockdowns. Despite the 1 million+ restaurants in the United States, they keep coming back to your establishment.
In addition to great food and service, how can you show your customers you care?
One way to show your consistent customer some love is through restaurant loyalty programs. The most well-known form of customer loyalty is the paper punch cards (chances are you probably have a few unfinished ones in your wallet right now!).
While punch cards are the classic solution to customer loyalty, they are often lost and forgotten about. Instead, restaurant loyalty software can provide a more streamlined and engaging experience for your customers. Restaurant loyalty software refers to any type of program that is used to track customer purchases and reward them when they reach a certain number of points or a goal.
Loyalty software can be purchased on its own, but some POS software includes this as a feature. Most software can be customized to integrate into your current operations seamlessly.
There are many reasons why customer loyalty programs increase customer engagement and retention. Source: Software Advice, 2021
Nearly half of all diners use at least one form of a loyalty program. If other restaurants are using loyalty points and programs to draw in customers (and you are not) you are losing out on repeat business. A loyalty program may not seem like a key component of restaurant management, but it can be absolutely crucial for developing a loyal base.
When customers are rewarded for their purchases, they actually tend to spend more - making it a clear win-win situation! On top of this, there are plenty of other benefits (read below for more). Restaurant loyalty programs sound like a great investment, right?
Benefits of Restaurant Loyalty Programs
Although setting up a customer loyalty program is extra work, it’s certainly worth it. Here are a few reasons why your restaurant should consider it:
1. Reward programs build a loyal customer base.
A reward program offers an incentive to return, and 69 percent of customers said that loyalty platforms bring them back to a restaurant. Drawing in new customers is exciting, but your restaurant should also commit to customer retention and growing a loyal base. In terms of building a long-term relationship between your restaurant and customers, 76 percent of consumers reported that loyalty programs are a major part of their relationship with brands.
2. Loyalty programs can increase sales.
After joining a loyalty program, 49 percent of consumers agreed that they spend more.
For the customers who are typically lower spenders, researchers found that they were incentivized to spend more than they normally would when they were a part of a loyalty program. Overall, loyalty programs change consumer habits for the benefit of your restaurant.
3. Get valuable customer data.
Data is gold, and loyalty programs can gather data on your customers such as ordering history, dietary preferences, age, location, and even their birthday. With this data, your restaurant can provide a more customized experience when it comes to offering rewards. Also - who doesn’t love a freebie or special deal for their birthday? If you are looking for specific customer information, consider creating an in-app or email survey (and offer reward points as an incentive!). With the right data and contact information, your restaurant can develop personalized marketing for your customers (like SMS notifications, email promos, and more).
4. Loyal customers bring new customers in.
One of the best forms of marketing is word-of-mouth marketing, and this is especially true for restaurants. Raving reviews and solid recommendations from existing customers is a sure-fire way to bring new customers through your door. If your restaurant already provides an excellent experience and offers perks for coming in regularly, this will get your customers talking. When you have loyal customers, this is exactly what happens. The best part? This type of marketing is totally free!
Restaurant Customer Loyalty Program Software Examples
Like all other restaurant software, there are a lot of choices when it comes to loyalty program software. All restaurants and food service operations will have different needs, and luckily, most loyalty programs are customizable. Two key things to consider when doing your research are functionality and fees. Compare the main features, as well as different monthly pricing, and if the program charges any type of transactional fee. Most will run between $45-$150 per month. Remember, some other forms of restaurant software will offer a loyalty program (like an online ordering system or POS system) so be sure to check on this first.
Beam Impact is a unique form of customer loyalty that easily integrates into Lunchbox. With its loyalty program, customers can choose what nonprofit they would like to donate 1 percent of their purchase. Customers can track their impact towards specific goals and see how much has been raised total for certain causes.
Beam Impact allows its users to choose which charity they would like a percentage of their purchase to go to. Source: Beam Impact, 2022
Punchh offers a loyalty and engagement program for restaurants, retailers, and convenience stores. Using AI technology, Punchh’s platform allows brands to create smart campaigns, offers, and strategies catered to their customers. Over 275 brands and 185 million loyalty members use the platform.
Toast offers an easy-to-use (and setup) loyalty program where guests can simply swipe their credit card on a POS system, choose to opt-in with an email, and then start earning points right away. This is a point-based rewards system where you can offer customized sign-up bonuses, redemption rates, and birthday rewards.
With Upserve’s program, your guest’s credit card acts as the loyalty card so a punch card or mobile app is not needed. When completing a purchase, guests can sign up via email or text. With less hassle for your restaurant and diners, this improves the sign-up rate.
Loyalty Gator offers loyalty programs for both employees and customers, as well as a gift card program. Each program is customizable, with the option of going cardless or using a card. This web-based program can be integrated with thousands of other applications.
Paytronix offers loyalty programs for both restaurants and convenience stores. Multiple styles of loyalty programs are available, and customers can sign up via a point-of-sale system, SMS, in-app, email, or online. With Paytronix, you can use your customer’s personal activity and tastes and offer custom promotions and offers.
A brand called Yesway uses Paytonix’s loyalty program. In a case study, Paytronix used credit card analysis (using more than a year’s worth of historical data) to see how much the loyalty program increased Yesway’s customer’s spending habits. Source: Paytronix, 2022
RoboRewards aims to put your restaurant’s rewards program on autopilot. Customers earn reward points for purchases, visits, and actions inside their member profiles. Additionally, the automated marketing funnel feature brings back customers more frequently & keeps them spending.
Belly allows businesses to get rid of paper punch cards and run a customizable, digital rewards program. Customers can sign up on your iPad, and check their rewards accrual here. After a customer’s first visit, this loyalty program collects the customer’s info to keep them engaged and coming back.
Spoonity is an adaptable digital loyalty and gift platform that does more than just track points. Its ROI-focused analytics helps businesses understand where the highest potential is for customer retention and growth. Spoonity boasts 8,123,000 active accounts and 35,733,592 completed transactions.
Examples of Restaurant Loyalty Programs
As you can see, no matter what loyalty program you choose, all are crafted to improve the customer experience at your restaurant. The best restaurant loyalty programs offer first-time purchase discounts or freebies, special rewards for referrals, bonus points campaigns, and coupons and gift cards for birthdays. If you know your customers well, you should know what perks they are looking for - a free dessert or an appetizer after a certain number of points is a good place to start!
Some of the restaurant chain loyalty programs with the highest number of users. Source: CNBC, 2021
Starbucks, Dominos, McDonald’s, Chick-fil-A, Dunkin’, Panera, and Chipotle are chain establishments with some of the most used and well-developed restaurant loyalty programs. For example, Starbucks’ loyalty program has 20 million users, offers a Starbucks Card mobile app, and created new models in gamification for rewards.
In addition to these megachains, independent establishments and chains have also developed their own loyalty programs to suit their customers. Here are a few loyalty programs from Lunchbox customers:
Wing Shack offers its own app that hosts online ordering and a rewards program. Those who sign up to be members of the Wing Club get exclusive deals, event announcements, and limited-time offers. The loyalty program ensures that it is “Pro-chicken and anti-spam”; meaning customer information will never be shared, and users can unsubscribe at any point. See how Wing Shack averages 100+ weekly downloads here.
Wing Shack has a custom app (developed by Lunchbox) that offers online ordering and rewards for customers who sign up. Source: Wing Shack, 2022
Summit Coffee offers an app-based rewards program for iOS and Android with an easy sign-up. Once signed up for the app, customers can start earning on their first mobile order and continue to build points with each purchase on the app. Points never expire and can be used for drinks, treats, merchandise, or coffee. Check out their case study here and how they average 100 new guests per month.
Anytime a customer uses Clean Juice’s app to order, they receive 1 point for every $1 spent. When purchasing in-store, customers can scan the app QR code or enter their phone number. Once 2,500 points are earned, customers reach VIG status, which means they’ll receive a swag box, better birthday rewards, and more. See how Clean Juice has over a 90% repeat customer rate here.
Foxtail Coffee offers its own mobile app on the Apple App Store and Google Play Store. Waiting in line for coffee can take forever, but customers can order on the app, skip the line, and earn rewards. Customers with the app will have access to exclusive offers, and points accrued over time can be used to purchase cafe drinks and treats.
Moonbowls allows its customers to join either on its loyalty app or the first time they place an order. Free bowls are just a tap away - for every $1 spent, customers earn 1 point. Those a part of the program receive exclusive menu items plus invites to tasting events, grand openings, and VIP focus groups. Additionally, Moonbowls offers Double Rewards days and special offers to help its repeat customers earn quicker.
Customers can be encouraged to sign up for a rewards program by offering a percentage off an entree or order upon signing up. Source: Moonbowls, 2022
Restaurant Loyalty Programs Keep Customers Coming Back
Your customers that show up to your establishment on a regular basis should be celebrated, and using a loyalty program can do exactly that. When it comes to restaurant loyalty software, you have many options to choose from, making it possible to accommodate the goals of your restaurant when it comes to customer retention, as well as your customer preferences. In addition to tracking points and providing rewards, loyalty programs can be a form of restaurant marketing by sending out personalized texts and notifications to customers. A successful restaurant uses software and technology - and a loyalty program should be a part of this.