Reward Customer Loyalty | Brand Education for Restaurants

Did you know that a loyal customer accounts for about 20% of your total customer count? You should be rewarding customer loyalty because that same 20% may account for as much as 80% of your total revenue. Are your loyal customers part of your current marketing focus?

Competition is tough, whether you are a restaurant, retailer or selling a consumer good or service. You have to work hard to get new customers, it takes both time and money. Today, we are going to focus on the low hanging fruit. Loyal customers are gold and should be treated as such. Far too often I see businesses, especially restaurants struggle to attract new customers all the while ignoring or under appreciating their loyal, supportive customers. You know, Brand Loyalists. 

Raise your hand if you like receiving perks. Keep ’em raised if you think loyalty should be rewarded.

The Daily Deals and GroupOn(s) of the world have mislead small businesses for a while now. It is time to re-focus. The strategy of those deals were built on driving new traffic with tantalizing offers too good to pass up. It is well documented the damage that those deals have left in their wake. Those deals created what I call an “artificial spike” in traffic. Yes, new traffic is good, but traffic that is only walking through your door once and at a discounted rate is bad. One of the major flaws of the daily deals for the small business owner is that they had no knowledge of who those customers were nor did they have the ability to re-target for future visits. That’s besides the fact that it destroyed the managers ability to be prepared for the boost in traffic, which meant they were not properly staffed or equipped and thus the product suffered. So much for making a good first impression. Why is that important? First Impressions. More Important Than Ever.

Yes, Traffic Is Good But…

This becomes a an argument of strategy versus tactic. A simple strategy is to drive more visitors to your restaurant, which can be accompanied by a simple tactic via coupon or discount. One of many glaring weaknesses in that simple approach (when using daily deals) is that you are concentrating on the wrong target customer and setting a poor precedence.

Don’t Discount When You Can Reward

What I am suggesting here is to (re)consider who you are offering your discounts or rewards to. Loyalty should never be discounted. That is a play on words, in fact the opposite is true. Instead of gambling on attracting new customers and presenting yourself as an inferior product by slashing prices for a new customer, why not consider rewarding loyal and committed customers for their support? A recent study conducted by Dunnhumby Consulting showed that Fast-Food Chains Miss Out on Sales as Customer Loyalty Lags. Brands need to provide more value to customers besides cheaper food costs. If restaurant brands continue to play the cost game then their food becomes nothing more than a commodity. Where’s the experience?

We live in a social, sharing world. Where people talk, they share and they post.

Social Endorsements are the New Mark of Brand Loyalty

The world we live in today revolves around the social web, where personal referrals are more trusted than advertising. The new word of mouth can be found on Facebook, Twitter, Yelp, Foursquare or Google not to mention personal blogs. Everyone has a voice and an opinion. Food and dining is a social activity. Foodies and habitual diners out are often the most out spoken. An older post of mine along with a great Infographic can shed more light on the power and influence that mobile, social foodies can have on your restaurant’s business. Digestible Smartphone Stats.

Ok, now that I have you refocused what do you do next?

The Reward 

Mmmm, Coffee.

Another major flaw with blind discounting (daily deals) is that you did not always control the deal or the offer. First things first, review your sales margins. What products work best for you to discount. Keep in mind that these loyal customers are already fans and like what you offer. Perks are great and they can be simple, therefore free and steep discounts are not always necessary. Surprise rewards are great. Recently, I was rewarded with an out of the blue free refill on a cup of coffee from a cafe that I often frequent. I did not expect it, perhaps I had earned it. But guess what? I really appreciated it. I now know that they value my business and that goes a long way. I will continue to be loyal to that brand and all it cost them was a refill on coffee. And yes, I shared with friends and followers that I received that surprise cup of coffee. I call that a win-win.

5 Tactics To Reward Your Loyal Customers?

  1. Build a Brand Loyalty Program – Create a plan around how you are going to reward your loyal customers. Promote it across all mediums; in-store, on your website and your social networks. Make sure to inform and educate your staff on the program and the particulars. 
  2. Facebook Check-in – This helpful post via Social Media Today sums it up quite nicely: Why Facebook Check-in Deals Are Especially Great For Restaurants. 
  3. Use Your Database – Hopefully you have one, if not start one NOW. Email, Text or Postcards are all easy, executable ways to reach past customers. Think seasonal offers or promote a new menu item. Make the offer strong and make it more rewarding than ones you share with the “public”. To get a few ideas, checkout, 4 Examples of Effective Email Campaigns from Restaurant Brands.  
  4. Punch Cards or Swipe Cards – For your audience that isn’t tech savvy keep it simple for your customer to redeem. For the Tech Savvy consumer, Restaurants should consider SoLoMo to Engage Customers.     
  5. Social Media – Reward customers for liking you on Facebook, Following you on Twitter, Google+ or checking in on Foursquare. Run a promotion for sharing images on Instagram or Pinning on Pinterest. Need help getting started? Getting Your Restaurant Started with Social Media.

BONUS – A Crazy Idea That’s Not So Crazy – Ask your loyal customers what rewards they are interested in. Run a poll or just ask. Enjoy the Perk of an Engaged Customers Base, that’s what I call Brand Engagement.

Did you notice how many of these mediums are inexpensive or free? That is a reward for you, the restaurant owner that has invested in their loyal and engaged customers. Reward Loyalty…a quick, easy and inexpensive way to drive traffic.

What are you doing to reward customers? Share in the comment section Reward Programs that you think are successful.

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While social is generally accepted, it is still grossly misunderstood. And, thus not fully vetted by all as a tried and true marketing tactic. Social goes way beyond just posting