How To Implement An Effective F&B Loyalty Program
Updated: Jun 4
There’s a saying that the fastest way to someone’s heart is through their stomach, so restaurants stand the best chance of gaining their customers’ loyalty! To accelerate this process, loyalty programs are a must to implement. In this post, let’s explore the best implementation practices for F&B loyalty programs.
P.S, if you have not already read our post on the benefits of loyalty programs, you definitely should right now to gain a general understanding of the upsides to having this system in place.
1. Establishing a Point System
Let’s get the ball rolling with the foundation of your entire program – points. Serving as a basic “loyalty currency”, you can reward your customers through a set amount of points per dollar spent. You can always give these points a fancier or catchy name that works well with your branding; for example, Nando’s points are called “chillies”.
These points can then be redeemed for numerous rewards. The rewards available are entirely up to your discretion, but remember, the more attractive the rewards, the higher the likelihood of customers returning. Some common rewards are discount vouchers that can be used for subsequent visits, free side dishes or even an entirely free meal if you amass enough points.
You can also set-up a referral program and reward customers who manage to bring in other members through awarding of points. More on this later!
One important point to help you envision what a point system is supposed to accomplish is through a game. Games nowadays have many mini-rewards for logging in daily or playing for a fixed amount of time. When you have logged in consecutively for a week or so, you will then be rewarded with an attractive reward. This is the same for a loyalty system. The mini-rewards are the points your customers get every purchase, while the attractive reward refers to the reward customers can redeem upon accumulating enough points.
After all, the whole rationale behind a point system is to avoid cases of instant gratification with the reward system while still maintaining the impression that your customers earn something with every purchase they make.
2. Loyalty Tiers
A tiered loyalty program creates different levels for the customer to be grouped in. In order to reach a certain level, customers must pass the milestone set for each tier. Hitting higher tiers translate into more attractive perks and rewards, such as priority service or booking, increased points earn per dollar spent and even experiential rewards which will be covered in the later segment.
Let’s take GrabRewards as an example. Grab offers 4 different loyalty tiers, ranging from a basic member, silver, gold and at the peak is platinum. The points you earn for every $1 spent differs quite drastically at different tiers – 3 points per $1 for basic members versus 6 points at platinum tier. Furthermore, platinum users also enjoy priority booking and further discounts for certain rewards. Spend more, earn more!
The big challenge with this program is to make the rewards at each tier attractive enough to make customers want to spend more to qualify.
3. Referral Program
You can never have enough customers and even though returning customers account for a large chunk of your revenue, new customers are what aids in business expansion. Referral programs help bring in new blood by leveraging on the network of your existing customers. A typical referral scheme in the F&B industry involves handing out of vouchers or freebies for every successful referral.
For example, if you do not have an app, you can simply design a simple social media post with an attention-grabbing headline such as “Sharing is Caring – Give $10 and earn $10!”
This referral program encourages your current customers to invite people in their social circle to sign up as a member. When they do so, both parties receive $10 each to spend at your restaurant. It’s a great deal and helps with publicity as well!
4. Personalized Rewards
The 2020 Bond Loyalty Report found that customers enrolled in loyalty programs with high levels of personalization are 7.5 times more likely to recommend those brands, 6.5 times more likely to spend more with those brands to maximize loyalty points, and 5.4 times more likely to continue spending with those brands.
So what does this mean for your business’ loyalty program? Simple – personalize and tailor your rewards as much as possible for each individual customer.
We are talking about exclusive birthday month discounts. Vouchers for their favourite
products. Tailored suggestions and reminders.
Fashion retail giants ASOS makes good use of personalization to encourage spending. Customized e-mails based on your previous shopping trends appear on a regular basis, alerting you of new deals you might be interested in. You also get a special promotion code on your birthday month!
5. Experiential Rewards
Some restaurants go the extra mile to provide rewards that extend beyond the monetary into the experiential space. Experiential rewards basically entail giving loyal customers access to experiences they might otherwise not be able to enjoy. This can be anything from private tasting events, exclusive products or premium memberships.
For example, several high-end restaurants reward their loyal VIP customers by holding invite-only events. Food tasting, celebrity meet-and-greet, chef’s table are some of the more common ones. This sense of exclusivity will forge a deeper sense of loyalty with your customers.
You can also consider collaborating with other brands to further widen the range of experiential rewards. Identify partners in the retail industry that fit your branding and propose a partnership that will also help them increase patronage. It’s a win-win situation where your customers enjoy further discounts outside of just food!
6. Games & Features
Last but not least, we have some games & mini activities or features to encourage interaction! Even though this is mostly utilised for app-based loyalty systems, it can be conducted through the use of physical punch cards or social media platforms as well!
Assuming you do already possess an app, regardless of its purpose, you can incorporate this feature to encourage daily usage from your customers. Shopee has implemented this feature to great success with its Shopee Games. Shopee Farm is one such example where users have to access the app daily to water your in-game plants to earn Shopee coins. Not only does this lead to increased spending to make use of the app currency, users also tend to browse the app after finishing this daily task. This could lead to purchases that would otherwise not have happened!
Another highly effective activity is a lottery-style game with a couple of attractive prizes. In order to qualify, customers have to spend a minimum amount and the more they spend, the higher their chances of winning. This leads to increased spending over the period of the contest, racking up even more points which leads to more frequent redemptions. It forms a cycle that constantly keeps your customers engaged.
For example, the 1st place prize can be some luxury electronic product such as a high-end laptop, or even a premium household appliance. It all depends on your target market’s psychographics and what they are more likely to be interested in.
Are you ready to set up your own loyalty system?
Now that everything is all said and done, try to implement what you have learnt and craft your very own loyalty system! It will help your business tremendously, especially with how volatile the F&B industry is right now due to the pandemic. Returning and loyal customers are more crucial than ever to help your restaurant tide through these times.
You can always contact us for assistance regarding this – we will be glad to answer any of your queries as well!