Loyalty Programs Emerge as a Restaurant Must-Have

In a recent report from Bluedot, 69 percent of restaurant customers said loyalty platforms bring them back to a restaurant. That one statistic is stunning enough, but there’s more – a lot more.

According to eMarketer, during the 2020 Covid outbreak:

  • Loyalty members’ checks were 6 percent larger on average than those of non-loyalty members
  • For eight months of 2020, the top 10 percent of loyalty members accounted for more than half of all loyalty spend at their favorite brands.
  • Spend per visit increased across all restaurant and convenience segments.

So what makes for a healthy loyalty program? 

“Penetration rate”  is defined as the percentage of all checks associated with a loyalty account. Critical mass occurs at about 15 percent, which is a good first year goal. “Excellent performance” falls between 25–35 percent, while top-tier performers can get penetration figures of 50 or even 70 percent. Panera, for instance, is sitting at 50 percent penetration rate and 40 million loyalty members.

Andrew Robbins, CEO of Paytronix, said  “The best programs are those that look beyond simply enticing customers with offers and leans into the idea of personalizing the customer journey. In this way a loyalty platform is part of a broader guest engagement strategy that touches all parts of the guest experience, whether that’s digital, physical, or a combination of both.”

The digital future of restaurants promises both convenience and choice, the report added, and loyalty will play a lead role unlocking that. Consumers prefer the option to choose different rewards and progress at a quick pace. Merchants also benefit from guests redeeming points for non-core items like drinks, sides, apps, and desserts. Since they’re typically add-ons to a check, cannibalization is minimized.

Paytronix released its first Loyalty Report in early October, which examined trends across loyalty, including visits, spend, member demographics, and program types.This comes on the heels of a watershed year for rewards. McDonald’s, Taco Bell, Wendy’s, Chipotle, and others, all either launched or relaunched programs against the COVID backdrop.

Paytronix looked at the highest-spending 10 percent of loyalty members in 2020.  Loyalty users were responsible for a bigger proportion of total sales following the pandemic onset, which proved loyalty guests continued to visit more often than non-loyalty guests, difficult times or not. When observing only loyalty members, the top 10 percent of loyalty guests accounted for more than half of all spend for eight months of 2020.

Despite everything thrown at quick-serves in 2020, the segment saw only a 2 percent decline in average annual visits among loyalty members. The above studies clearly demonstrate the critical role loyalty programs played in restaurant marketing during Covid and the even larger one to be played going forward.

Customer Loyalty Accelerator (CLA) is a groundbreaking loyalty program, using the power of spend-based store credits to motivate and reward return customer visits and higher spending.  

CLA’s innovative, “spend-based” approach rewards customers that spend more with targeted incentives that generate more revenue for your store. <Learn more>

Source: Technology,  October 14, 2021