Restaurants see a lot of loyalty programs: cards, apps, coupon systems, you name it.
All have the goal of customer retention, thereby turning a one-time $15 check into 3 or 4 $15 checks every month.
Businesses Must Show Loyalty Before Expecting Loyalty
Do you have a handful of loyalty cards in your purse? My wallet was stuffed: grocery stores, Starbucks, Panera Bread. So many. So many I ended up feeding the barcodes into an app because there were so many. You'd think if I had loyalty to one supermarket I'd only have that one supermarket's card and never another. But to me, it's just a discount card, so I have 4. Just in case I'm outside my local neighborhood and need to pick something up at the store.
A person joining your loyalty program for a discount doesn't show loyalty. It shows thrift.
Don't run a discount program, run a loyalty program. But it starts with you.
Email is very permissive. Your guests are "opting in" to be a part of your restaurant's community, so make sure you are taking every opportunity possible to thank them for that permission and provide them with a positive experience. Email is not as frequent as Facebook and Twitter; also, it is very much a push marketing tactic. So, you need to put significant thought into the campaigns you are going to promote via email.
Start with the welcome message. This may be the most important communication you send to a new email subscriber, as it is the first and only chance you have to reinforce the message you used to get the guest to sign up in the first place. Your welcome message should go out immediately after the guest signs up, and it should have a strong value to encourage that guest to return to your restaurant soon.
Discounts Aren't Enough
Any customer can sign up for Groupon, Living Social, Restaurant.com, and they'll get plenty of offers. Is offering a $5 discount on your next visit, or $10 off $25 really generating the type of business that you want to capture for your restaurant? Promoting the same type of offers through your email list is just adding your message to the mix, not rising above the crowd.
You don't have to give away the house here, but 2 or 3 times a year, use your email program to truly thank those guests who have given you the permission to engage them via email. Think "gift" not "offer". The results will amaze you.
Make it stand out by making it exceptional. And by exceptional, make it a no-strings offer. BOGO, "free appetizer with the purchase of two entrees" - these are strings. Offering a free bottle of wine or entree on the next visit will get attention and get your offer redeemed. Adding the words to the subject line will improve open rates. Your customer will likely bring a friend to share that wine with, and now you're adding even more exposure for your restaurant.
An example of where this has worked is a restaurant that created a buzz around their "Birthday Club" by offering a strong value proposition to their email club. It's simple really: sign up for our email club, and receive a free dinner on your birthday. No strings attached. Now, the restaurant knows that the majority of their guests are not going to come into their restaurant by themselves on their birthday, so adding the standard BOGO language seemed silly to them. What this operator does is track email redemption for their birthday club by having a "Free Birthday" button on their point of sale system. Results: over $200K in sales attributed to their birthday emails. This is not their entire email club, mind you, just the birthday campaign. They have a 40% redemption rate on this campaign, and they have subsequently built an email club of over 13,000 names. Not too shabby.
Email and Texting Clubs are Solid
There are so many services available to manage the timing and sending of email (or texts) to bring customers back to you.
I won't go over these services, or show a preference in providers, but they have been proven and are convenient for customers. All the customer has to do is provide an email or a cell phone number. They don't need to download or install apps. And they don't need to carry cards.
And best of all, they are affordable and simple for business owners to implement.
An App May Not Be the Right Fit For You
Custom apps can be very expensive to build, augment, and maintain. There are app-based services that can plug your business in, but apps may not be the right choice.
This states the case pretty well:
I see a lot of people going down the electronic path to have apps, and not having much success in the casual dining area. I see more success with loyalty apps and programs in the high frequency categories. The coffee shops, for example. Strategically, that makes sense. If I am going someplace a few times a week, then it is relevant. But if I am only going a few times a year, I am not sure that it is all that relevant. In the casual fine dining area, a lot of people trying to do it, but very few are having a lot of success with formal programs. People might sign up for these apps on their phone, but then delete it a little bit later. A lot of brands seem to be doing it just because everyone else is doing it.
-- Jim Rogers, CMO of Romacorp, Inc. (Tony Roma's)
It makes business owners proud to say they have a loyalty app for customers to download, but it's rarely worth the expense.