Operations
8 tips to increase loyalty program usage
Loyalty programs work great -- as long as your customers use them. Consider these eight tips to increase the usage of your loyalty program.
October 4, 2024 by Mandy Wolf Detwiler — Editor, Networld Media Group
In today's fast-paced world, QSRs have become a staple for many consumers seeking convenient and affordable meals. To foster customer loyalty and drive repeat business, these restaurants have increasingly turned to loyalty programs. These programs offer a variety of incentives, from points and rewards to exclusive discounts and personalized offers, designed to keep customers coming back for more.
QSRs can leverage loyalty programs to drive repeat business and increase customer satisfaction.
Here are eight tips to create an effective loyalty program:
Engagement is not the same as loyalty
"Loyalty is something that a lot of brands don't have difficulties with, but engagement is," said Michael Chock, chief revenue officer at SmartMedia Technologies, a leading loyalty and engagement platform.
Chock said Gen Z are going to be the next superstar spenders. "We want them to be actively participating in the monetization of their engagement with a brand," he said, "and that can be in the form of points."
Chock cited an airline that he frequently uses but does not engage with. He said if the brand were to send out, say, a trivia question once a day or once a week and he could accumulate points for answering that question, he'd be more likely to engage with the brand.
Offer immediate rewards for your loyalty program
Customers appreciate instant gratification. Consider offering points or discounts on their first purchase or sign-up. Some QSRs and fast casuals offer free food, such as a sandwich, side or drink, simply for signing up.
Mo Charr, COO of Givex, said a mobile app is critical for loyalty program success. Online ordering, a brand's menu and LTOs.
"People want immediate gratification," Mo Charr, COO of Givex, a loyalty platform for retail and restaurants, said in a phone interview. "You're going (into a QSR) for convenience, you're going in there for a quick meal, and their loyalty programs should be the same. The only way that you can do that is to have a mobile app for your clients … you can thank them right away for making a purchase with a mobile app. If it's a points-based program, you can say 'You've just earned 200 points today, and you're this far away from your next threshold.' You can give them instant rewards for their next visit."
Keep it simple
QSR customers are often on the go and need their loyalty programs to be as quick and easy as their meals. To keep them engaged, avoid overly complex rules. Make it straightforward to sign up and earn rewards. Simplicity is key to a successful loyalty program that will keep customers coming back for more.
Peter Vogel, chief revenue officer for vLoyalty, a loyalty management platform, said providing customers with enough options to keep them engaged in a brand is also paramount to a loyalty program's success.
"Give them different options in how to enroll," Vogel said. Older users may have trouble downloading an app, and even younger users get app fatigue. "What if someone just wants to join at the counter by giving their phone number? They should be able to do that. Either they can type it in themselves or the counter person can type it in. They can join right directly on the payment terminal, something our program is a big proponent of."
The platform vLoyalty tracks customers through their payment cards. Once a customer joins a program, his or her credit or debit card is remembered, Vogel explained.
Tiered rewards
While keeping it simple, introduce tiered rewards to encourage higher spending or more frequent visits.
Chaar said to drive visits to your QSR, put a time limit on redemption. For instance, when offering a birthday reward during the user's birth month, consider giving them two weeks from their birthday to redeem the reward, which could include a free item.
"We find a combination of points and personalization such as a registration reward or a birthday reward, we find that those are the most effective program," Chaar added.
Personalized offers in loyalty programs
Personalizing offers in a loyalty program for restaurants can significantly enhance customer engagement and satisfaction. By leveraging data collected from customer interactions, such as purchase history, preferences and demographics, restaurants can tailor offers to individual diners. This might involve providing discounts on their favorite dishes, offering exclusive access to limited-time menu items or suggesting complementary pairings based on past orders.
Personalized offers not only make customers feel valued and appreciated but also drive repeat business and increase average order values. Moreover, by analyzing customer behavior and preferences, restaurants can gain valuable insights into their target market, enabling them to refine their menu offerings and marketing strategies.
"Customization in offers and rewards is super crucial to driving excellent engagement and loyalty with this upcoming generation," Chock said.
Mobile app integration
Develop a user-friendly mobile app for easy enrollment, point tracking and mobile ordering.
"When you have your own mobile app, you can decide what delivery service you use, if you want to hire a driver, that might cost less than using a service like Uber Eats," Chaar said. "I think for today's customers, especially because a lot of the people that visit QSRs are younger or they're working. They're on the road all the time. They don't have time to go home and have a meal, these types are immediate gratifications are great. They're not going to go home and check into an online site to check their points."
Gamification in loyalty programs
Gamifying a mobile app gets customers to engage with the brand. For instance, Chock said SMT dropped tokens around a store that could be redeemed for items and operated much like the Pokemon Go app. This type of gamification encourages customers to interact with a brand in real time.
Interoperability
Allowing two brands to merge their points can increase loyalty program usage. The key is to ensure that one brand isn't losing value by transferring points. The ecosystem should be equal.
"The interoperability ties really heavily into customization," Chock said. "One size fits all does not fit well for the modern consumer. Gen Z is so quick to make decisions, they're so quick to absorb information, and have a one-size-fits-all approach excludes the majority of people rather than including the majority.
By following these tips, QSRs can create loyalty programs that drive customer engagement, increase repeat business, and boost overall revenue.
About Mandy Wolf Detwiler
Mandy Wolf Detwiler is the managing editor at Networld Media Group and the site editor for PizzaMarketplace.com and QSRweb.com. She has more than 20 years’ experience covering food, people and places.
An award-winning print journalist, Mandy brings more than 20 years’ experience to Networld Media Group. She has spent nearly two decades covering the pizza industry, from independent pizzerias to multi-unit chains and every size business in between. Mandy has been featured on the Food Network and has won numerous awards for her coverage of the restaurant industry. She has an insatiable appetite for learning, and can tell you where to find the best slices in the country after spending 15 years traveling and eating pizza for a living.
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