Imagine you enter a restaurant, and a cashier knows your order by heart or greets you by your name — Starbucks does just that! And everyone loves that. Having a group of loyal customers can help your restaurant boost profitability because, on average, returning customers spend over 30% more than new customers.
Although, turning a newly acquired customer into a loyal one is always tricky. This is why the popularity of loyalty programs is rising quickly. According to research, US companies spend over $1 billion yearly on loyalty programs, and the average US family joins 14 different programs. And moreover, over 70% of Americans are a part of at least one program.
In this article, we talk more about restaurant loyalty programs, their types, their benefits, and 11 of the top restaurant loyalty program software you can invest in. So, read along!
What Are Loyalty Programs?
A customer loyalty program is a marketing approach restaurants and other businesses use to encourage repeat business. Customers are frequently rewarded for making restaurant purchases with points or other prizes that can be redeemed for discounts, free menu items, exclusive specials, or other perks.
Moreover, successful loyalty programs play an important role in consumer retention. For example, you’re motivating customers to return by converting cash into points and allowing them to earn incentives after accumulating a set number of points or purchasing products at your restaurant. Also, this will gamify their purchases, making spending fun.
Simply put, a restaurant loyalty program allows you to reward clients who frequent your establishment.
Types Of Loyalty Programs
You may be wondering which customer loyalty program is best for your business. Here are the most common types of loyalty programs for restaurants that you can choose from:
Points-Based Loyalty Programs
A point-based loyalty program awards customers with points according to the amount they spend or the frequency of their visits. Businesses typically give customers one point for every dollar spent.
Customers can then exchange their points for specific items or restaurant credit. For example, give customers a $10 discount for every 100 points or exchange them for a free side dish.
Items-Based Loyalty Programs
An items-based program rewards consumers for purchasing an item several times by providing the next one free. For instance, if they buy nine cups of coffee, coffee houses can offer the tenth one for free.
A different take on the item-based reward program is to use a points-based system for point accumulation and then offer a free item as a prize instead of a discount. For instance, you may give customers a complimentary dessert once they have accumulated 50 points.
Subscriptions-Based Loyalty Programs
Subscription-based loyalty programs for restaurants are a reward system that requires users to pay an upfront fee to become members. Subscribers receive special perks, discounts, and personalized experiences that make them feel important and cherished.
For example, you can reward subscribers with a free coffee or a complimentary cake on their birthday, anniversary, etc.
Promotions-Based Loyalty Programs
Members of this loyalty program receive prizes with expiration dates that entice them to order food from or dine at restaurants within a set window. These incentives don’t have to be connected to any particular spending patterns.
Instead, you may provide these gifts as unexpected promos to encourage consumers to dine with you on their birthdays or to increase sales during quiet times, for example.
Benefits Of Restaurant Loyalty Programs
Restaurant loyalty programs are also designed to add value to your existing brand by bringing in repeat customers. According to Bain & Company, a 5% improvement in client retention can boost profitability by 75%. Also, loyal consumers are more inclined to spend than new ones, increasing profits.
Here are some more benefits of a restaurant loyalty program:
Increased Customer Retention
According to research, a 5% boost in customer retention can increase profitability by nearly 25 – 95%. A customer loyalty program can help your restaurant enhance customer retention, particularly over time.
This is because participating in loyalty programs will make customers feel like they are a part of the business and that their purchases are valued, making them more inclined to keep returning. This can lead to higher sales and profit for your restaurant.
Better Brand Identity
A customer loyalty program helps many businesses, not just restaurants, boost brand awareness. When customers see that you’ve implemented a rewards program strategy, they’ll better understand what it involves. They may be more open to testing other companies that provide similar services, boosting your brand identity.
Increased Consumer Spending
Restaurant loyalty programs encourage clients to revisit your restaurant, which leads to spending more and significantly increasing the sale of your business.
Better Customer Insights
A point of sale (POS) system and restaurant loyalty programs provide extensive insights into consumer tastes and preferences. These insights can then be leveraged to design even better and more specific customer incentive programs they cannot refuse.
This customer information can also provide customers with a better dining experience the next time they visit your restaurant, which will boost client satisfaction.
Examples Of Restaurant Loyalty Programs
Here are some examples of successful restaurant loyalty programs:
Starbucks Rewards
Starbucks is a prime example of a successful restaurant loyalty program. The company’s rewards program offers customers points for every purchase, which can be redeemed for a free sandwich, coffee, or other exclusive offer.
The program also incorporates gamification elements, such as leveling up and earning stars, to keep customers engaged and motivated to return. The program has multiple levels, each with its own perks, encouraging customers to continue earning points and reaching new milestones.
Mcdonald’s: MyMcdonald’s Rewards
One unique feature of the MyMcDonald’s Rewards program is its focus on customer choice and flexibility. Instead of offering a fixed set of rewards or perks, MyMcDonald’s Rewards allows customers to choose rewards based on their preferences and interests.
For example, customers can redeem their rewards points for a free McVeggie, a hot chocolate, a McFlurry, or any other item on the menu. This personalization allows customers to get the most value out of the program and choose a reward according to their liking.
Top 11 Restaurant Loyalty Program Software
Here is a list of the most preferred loyalty program software for restaurants, and reasons why you should invest in them:
- Posist
Posist’s integrated platform offers a one-stop shop for all your restaurant customer relationship management (CRM) and loyalty program needs.
You may use the software’s data to acquire deeper insights into what your guests prefer, allowing you to focus your marketing efforts on generating return visits.
Also, the software gives them bonus points whenever a consumer provides feedback. Users can quickly redeem these points using their data, eliminating the need for loyalty cards.
- Reels
Used by thousands of fast-growing establishments, Reelo helps seamlessly launch loyalty programs for restaurants that customers love.
As a restaurant owner, you can fully customize the loyalty program per your needs by choosing from different loyalty types, naming the points currency, giving bonus points to customers who complete their profile, and setting up expiration reminders to encourage them to visit again.
The software also provides valuable insights about customer spending behaviors and purchase preferences that can help you develop more personalized offers. The best part? You can use it for free forever!
- Xeno
Xeno’s customized loyalty system believes in understanding customers’ needs and prioritizing them to create a personalized experience. This is why the software has caught the attention of too many restaurant owners.
It uses various attributes to personalize customer profiles and offer deals according to their needs.
Moreover, what works best for Xeno is the gratifying experience the brand has launched to engage its customers.
- Capillary
The Capillary Intelligent Loyalty platform covers you from all angles regarding customer loyalty. The platform offers comprehensive online, in-store, and social media loyalty to engage customers and positions the business in such a way that it boosts customer engagement.
Capillary also provides its most dedicated diners with exclusive access to the restaurant of their choice. The restaurants can tailor the reward program to customers’ needs by offering free desserts, expedited reservation processing, etc.
- Mobikon
Mobikon is an Artificial Intelligence platform that understands a restaurant’s customer engagement and helps them plan their next move. Mobikon also encourages customers to burn points by reminding them they have gained a particular set of points.
The platform also indicates various ways the points can be consumed, sometimes resulting in upselling their orders or the restaurant earning more.
- Mloyal
The Mloyal loyalty program platform offers personalized apps that help to engage customers better while aiming for a return on investment (ROI) of 8x. Using the software, you can fetch your customers’ reports in real-time and make data-driven decisions.
Additionally, you can configure the loyalty program according to your restaurant’s needs. For instance, you can go for a point-based, frequency-based, discount based, or even an item-based loyalty program, whatever floats your boat!
- Reception
Built to serve restaurants of all sizes and formats, Reception helps aggregate customer data on one platform and then utilize it to run campaigns.
- Preferred Patron
Preferred Patron, a loyalty marketing software, fosters relationships, improves repeat visits and boosts consumer spending. Unlike other loyalty programs for restaurants, this program lets you set up your mobile app around your brand. The loyalty program works best because it prioritizes communication with consumers.
Using the program, you can send out alerts and messages to consumers when they reach a rewarding milestone. The main features of this loyalty program are real-time reporting and omnichannel communications.
- Lightspeed
Lightspeed Loyalty’s loyalty program provides you with an application and allows you to customize its branding. Your customers can download the app, pay straight through the app, and gain points with each transaction. Plus, they can redeem perks such as a free coffee or a unique 2–for–1 deal.
You can even use the built-in reports to monitor your marketing ROI by analyzing your consumers’ behavior and purchase habits.
- AppInstitute
AppInstitute gives your customers an option to choose between stamps or points. Since owners can often be confused between the various restaurant loyalty programs, isn’t it ideal that you let the customers decide?
While using the software, customers score a stamp by purchasing or earn points by checking in on the restaurant’s app. Simply put, choosing a loyalty program becomes their choice instead of yours!
- Upserve
What is intriguing about Upserve is that the customers’ credit cards work as their loyalty cards. This makes the loyalty program easy to join and customize.
Besides, the loyalty program is a powerful tool that offers clients a mobile app. Simple usage and interactive graphics make it a success!
Conclusion
Although the restaurant loyalty program is not new in the hospitality business, many restaurants neglect to properly market it to their customers.
Thus, once you decide on getting a loyalty program for your restaurant, you must focus on one thing: incorporating customer data in the POS. Two, marketing your loyalty campaign for customers to generate awareness.
Without these two, even the best loyalty programs could be a failure.
