LEVERAGING CUSTOMER LOYALTY : IN THE FOOD SERVICE INDUSTRY
CO-FALL 2009Author :
Martin Greenspon 
Martin Greenspon founded M-Four in 1981. His lifetime career has included the manufacturing sector as well as being a Director of one of Canada's leading investment firms. He can be reached at martin@mfourintl.com
At this time recession weary customers are eating out less frequently. Contrary to popular belief that reward or loyalty programs are only about free airfare or discounted hotel rooms, loyalty initiatives in the food service industry have hit their stride.
Restaurateurs can never underestimate the value of their existing customers. Current customers are often the easiest and most profitable source of additional business. A loyal customer base is also the best defense against competitive attacks.
The sad fact is that many businesses lose 20% or more of their customers each year. And, to replace lost customers with new customers cost five times as much as retaining their existing customer base. A restaurant operation cannot afford to lose customers if it wishes to remain competitive.
Loyalty programs are about giving something to your customers that makes a difference in their everyday lives and keeps them coming back… a free cup of coffee at a local café, a discounted dessert after dinner or express seating at one’s favorite restaurant. These incentives make strategic sense for the high frequency restaurant industry and customers are catching on.
As loyalty in the food services industry has taken off, restaurateurs are realizing that in the fierce battle for consumer dollars, loyalty needs to be an integral part of the overall business strategy rather than a one off discount or coupon for short-term gain. This is an approach that simply is not sustainable for the long term. Regardless of the economic climate, operators need to engage their customers to keep their seats filled and encourage repeat business.
Within the restaurant industry, insight often results in success. By gaining valuable insight into a customer’s habits and preferences, restaurants can effectively increase frequency and spending. The key is to get to know your customer and be sensitive to their needs. In turn they will be more loyal to you.
Restaurant operators running loyalty programs can offer their customers the greatest value by rewarding their behavior at the point of sale… the last interaction between the restaurant and the customer. This is when the experience is consummated… providing tailored discounts and special offers at this point is your opportunity to make an impression on your customer. You are up close and personal not slow, anonymous and generic. Getting to know your customers, treating them like individuals and seizing the moment to communicate while they are face-to-face will make them feel valued and can change their behavior and drive your sales.
Surely, the restaurateur would like to skip the process of wading through the databases of marketing information in order to mail a watered down offer to their customer a month after they have visited your restaurant. In fact, restaurants can actually take full advantage of face-to-face customer interaction to hand deliver opportunities right at the point of sale and drive true behavioral changes in customers. This is a true example of leveraging customer loyalty.
To implement your “loyalty program”, set your reporting parameters to focus on the individual customer. Do not rely on large scale averages gathered from numbers across a region or country. Information must be tabulated at the store and even customer level. If behavior is tracked down to the individual, customers can be recognized and rewarded based on their behavior that day, week or month.
Offer rewards or discounts that are easy to understand and are redeemable on the spot and/or upon their next visit.
Be sure to take advantage of some of the best advertizing real estate out there… the receipt. Putting targeted discounts and promotions on the bottom of the customer’s receipt really works to drive customer loyalty.
Regardless of whether you are a small restaurant or a national chain, loyalty programs can create the feel of a corner restaurant, enabling customers to receive personal service and never consider visiting the competition across the street.
Restaurants of all types can take advantage of this advice, whether you have the budget for a sophisticated loyalty-marketing program or just the raw desire to give the very best experience to your customers each and every time they visit. It is about delivering the right offer to the right person at the right time…
Restaurateurs can never underestimate the value of their existing customers. Current customers are often the easiest and most profitable source of additional business. A loyal customer base is also the best defense against competitive attacks.
The sad fact is that many businesses lose 20% or more of their customers each year. And, to replace lost customers with new customers cost five times as much as retaining their existing customer base. A restaurant operation cannot afford to lose customers if it wishes to remain competitive.
Loyalty programs are about giving something to your customers that makes a difference in their everyday lives and keeps them coming back… a free cup of coffee at a local café, a discounted dessert after dinner or express seating at one’s favorite restaurant. These incentives make strategic sense for the high frequency restaurant industry and customers are catching on.
As loyalty in the food services industry has taken off, restaurateurs are realizing that in the fierce battle for consumer dollars, loyalty needs to be an integral part of the overall business strategy rather than a one off discount or coupon for short-term gain. This is an approach that simply is not sustainable for the long term. Regardless of the economic climate, operators need to engage their customers to keep their seats filled and encourage repeat business.
Within the restaurant industry, insight often results in success. By gaining valuable insight into a customer’s habits and preferences, restaurants can effectively increase frequency and spending. The key is to get to know your customer and be sensitive to their needs. In turn they will be more loyal to you.
Restaurant operators running loyalty programs can offer their customers the greatest value by rewarding their behavior at the point of sale… the last interaction between the restaurant and the customer. This is when the experience is consummated… providing tailored discounts and special offers at this point is your opportunity to make an impression on your customer. You are up close and personal not slow, anonymous and generic. Getting to know your customers, treating them like individuals and seizing the moment to communicate while they are face-to-face will make them feel valued and can change their behavior and drive your sales.
Surely, the restaurateur would like to skip the process of wading through the databases of marketing information in order to mail a watered down offer to their customer a month after they have visited your restaurant. In fact, restaurants can actually take full advantage of face-to-face customer interaction to hand deliver opportunities right at the point of sale and drive true behavioral changes in customers. This is a true example of leveraging customer loyalty.
To implement your “loyalty program”, set your reporting parameters to focus on the individual customer. Do not rely on large scale averages gathered from numbers across a region or country. Information must be tabulated at the store and even customer level. If behavior is tracked down to the individual, customers can be recognized and rewarded based on their behavior that day, week or month.
Offer rewards or discounts that are easy to understand and are redeemable on the spot and/or upon their next visit.
Be sure to take advantage of some of the best advertizing real estate out there… the receipt. Putting targeted discounts and promotions on the bottom of the customer’s receipt really works to drive customer loyalty.
Regardless of whether you are a small restaurant or a national chain, loyalty programs can create the feel of a corner restaurant, enabling customers to receive personal service and never consider visiting the competition across the street.
Restaurants of all types can take advantage of this advice, whether you have the budget for a sophisticated loyalty-marketing program or just the raw desire to give the very best experience to your customers each and every time they visit. It is about delivering the right offer to the right person at the right time…