Loyalty programs are so ubiquitous today that most consumers belong to at least one—and they’re likely to sign up for more than a dozen. But research shows that they’re not always pulling their weight: A late-2018 analysis by Cambridge, Massachusetts-based Forrester Research reported that “nearly half of U.S. 18- to 35-year-olds admit that programs influence what they buy and how much they spend,” but they also require “an emotional component that programs often fail to satisfy.” In fact, only 41% of consumers report that programs actually make them feel more loyal to a brand.
With so many programs clearly missing the mark among consumers, it’s crucial to make yours stand out—while ensuring it runs smoothly and pulls in key information you
can use to ramp up business for the future. Read on for some easily implemented tips that will help make your loyalty program a success.
Expert: Dave Cesaro, executive director, vertical marketing, Valassis, Livonia, MI
Key takeaway: Use data to personalize the customer experience.
The key for successful loyalty programs, besides ease of use and bonus achievements, is understanding where, how and what each customer purchases. That allows brands to craft messages and incentives to inspire incremental visits, increase ticket sizes or try new items. Best-in-class restaurant loyalty programs include giving the most loyal members sneak peeks at new limited-time offers or developing a tiered point system that rewards incremental visits or app downloads. But restaurants looking to establish loyalty programs must be aware that offering free breadsticks on someone’s birthday won’t be enough to inspire action. With customer loyalty fading, pizzerias cannot simply rely on their top customers to drive traffic and sales in 2020. Promotions will remain a key driver for loyal, lapsed and new consumer activation, with true loyalty being earned through quality food and solid operations.
Expert: Toni Clem, CEO, Scoppechio, Louisville, KY, and Cincinnati, OH
Key takeaway: Focus your acquisition strategy on the lifetime value of a client, not just one visit.
Tip #1: Restaurants often rely on heavily discounted acquisition offers to grow their database quickly. Unfortunately, this results in guests who want a quick deal but never come back. Therefore, pizzeria owners need to reach beyond that first visit. Incorporate zone messaging strategies, ease of signups, and local advertising to acquire loyalty program members.
Tip #2: Segmentation often starts with recency (how long ago they last visited), frequency and monetary models to determine the loyalty of guests. However, looking only at monetary values can be flawed for restaurants that compete in high-frequency, low-cost meals. Instead of looking at monetary values, focus on recency and frequency, and then layer on occasions (such as party size and time of day) in place of monetary to monitor guest behavior.
Tip #3: Your best customers likely aren’t going to change their behavior with special offers. We see a lot of burnout with offers and rewards; customers simply expect them now. Instead, reward your customers with something tangible rather than simply another coupon. For example, unique merchandise rewards are a way to go beyond the transactional and build a relationship with your best customers.
Expert: Ray Clopton, CEO, Wilbur, Broomfield, CO
Key takeaway: Streamline the process from start to finish.
Today, with so many options available, consumers are very selective about the loyalty programs they join. They are more likely to be loyal to brands that respect their personal privacy, and they don’t necessarily want to join a loyalty program that asks for too much data. They also want convenience when it comes to loyalty programs and do not want to carry a card in their wallet or download another app on their smartphone. Restaurants and pizzerias that make it easy for their customers to participate will have the best response. By using a cardless, phone number-based approach to loyalty programs, customers no longer have to remember a card; they can simply provide their phone number at the end of a meal to receive rewards. Giving rewards to your customers, no matter how simple or small, can make them feel appreciated and valued; keep them engaged with and loyal to your business; and encourage a stronger connection so they recommend you to their friends.
Expert: Stacy Caprio, founder, Accelerated Growth Marketing, Chicago, IL
Key takeaway: Add the element of surprise.
Creating a loyalty program that offers surprise rewards at random intervals when people come back a certain number of times is a great way to make people excited to keep coming back to your pizzeria. Create surprise in the intervals and types of rewards, and people will want to come back just to see what rewards they will get—and when!
According to Forrester Research in Cambridge, Massachusetts, loyalty customers expect more than a brand’s best discount; they also want to feel special and look for perks that are relevant to the companies they’re buying from—and 80% of loyalty program members want to receive special treatment not available to other customers. For example, Forrester compares the perk of cash back, which provides only positive reinforcement in the moment, vs. status tiers, which create more valuable feelings of anticipation and extended gratification.
Big-name brands are certainly taking note of findings like these. Last year, Nation’s Restaurant News reported that Jackson, Mississippi-based Newk’s Eatery, with more than 120 locations in 16 states, was experimenting with a program that allowed customers to “cut in line during peak hours, get ‘prime’ seating or receive free samples of new menu items.” In the same article, Seattle-based MOD Pizza, with more than 465 locations nationwide, was noted for finding inspiration in airlines for its own loyalty program, but with an altruistic twist: Customers can now “pay it forward,” donating their accumulated points to Generosity Feeds, a nonprofit that feeds children in need. Alternatively, McDonald’s unveiled a different type of pay-it-forward program that allowed members to pass on free coffee to other people for a limited time.
The key takeaways here? Think outside the box. Ask your customers what’s most valuable to them. Monitor how well each program structure or perk works for your business—and don’t be afraid to make tweaks along the way!
Tracy Morin is PMQ’s senior copy editor.