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Five Steps to Building a Loyalty Program that Drives Revenue

December 16, 2016
by Margaret Link

This article was originally published in RMagazine. To read the full article, click here.

Loyalty programs get a bad rap because they’re overwhelmingly… well, underwhelming. They exist in the form of punch cards, email clubs, and poorly-maintained apps that demand customers scan QR codes whenever they visit. At best, they have a neutral presence, not disturbing the experience enough to detract loyal customers so restaurants can collect valuable data. At worst, they actively repel customers from participating by impeding the experience, placing hurdles in front of loyal customers by asking them “sign in” or “check in” or surrender some type of personal information every single time they visit.

So why do brands still invest in loyalty? Because there’s a strong business case to back it up — every dollar invested in customer retention goes 7X as far as a dollar invested in acquiring new customers (source: Harvard Business Review).  Restaurants know that this is the way to go, but they’re often stuck using outdated programs with negative — or worse, untraceable — ROI.

As we head into the new year, it’s time to start thinking critically about the failures of traditional loyalty programs, and make it a resolution to leave them in the past where they belong.

Invest in bringing your restaurant technology up to speed — including your customer information database. From there, you have the foundation to build a loyalty program that identifies, engages, and retains your best customers… all while creating new banner-waving loyalists for your restaurant. Here are five steps to building a customer retention and loyalty program that drives real revenue.

1. Map out a loyalty experience worthy of your customers

Your best customers are the ones who will be using this program… what type of experience do you want them to have? How should rewards accrue, what does communication look like, what steps do they have to take in-store to earn progress towards rewards? Bad loyalty programs think about the customer experience as a means to an end (“I’m going to set up a program so people come in more!”), rather than an integral part of how customers perceive your brand (“I want the loyalty program to be easy and delightful for customers.”). Ultimately, a great experience will drive higher participation, more customer data, and more revenue for your business.

Read more here.


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