Advantages of Running a Loyalty Program in Your Restaurant

The best customer for a restaurant is the repeat customer who comes in to eat on a regular basis, thus becoming a revenue stream rather that a one-time listing on the accounts. Establishing a well-conceived and well-integrated loyalty program can provide you with a critical edge in winning over your customers and converting them into lasting loyalists.

Restaurant-Loyalty-ProgramHere are the most important advantages of running a loyalty program in your restaurant:

1) Lead Generation 

The existence of a loyalty program can make for an excellent marketing tool. In brief, it serves as an additional benefit to potential customers, meaning it raises their incentive to visit your restaurant.

This is important since a sale means producing the revenue that a restaurant needs to survive and because each sale is a chance to convert a one-time customer into a repeat customer.

Related: 7 Low Cost Ideas to Market a Restaurant

2) Customer Loyalty

At the same time, a loyalty program makes it that much easier for your restaurant to instil some measure of loyalty into your customers.

Part of this is due to the fact that a loyalty program rewards your customers for being customers; a cause for gratitude on their part, so long as the rewards are sufficient to their tastes.

Part of it is because it encourages your customers to come back again and again, which is effective in providing the power of routine and because it enables your loyalty program to exert its influence on them again and again.

Loyal customers are absolutely crucial as they visit more often, spend more on each visit, and create a stable flow of cash into those restaurants fortunate enough to have them.                

3) Word-of-Mouth Marketing

It seems counter-intuitive, but loyalty programs can reduce your marketing costs without hampering their effectiveness in the process. This is due to the power of recommendation. The more loyal a customer is to your restaurant, the better the chance that said customer will recommend your restaurant to his or her friends and family members.

Since people tend to trust friends and family members more than businesses, loyal customers can provide a powerful boost to your marketing efforts. This is particularly true if your loyal customers spend a good deal of time on social media sites, since their messages can spread more effectively over the Internet.

Related: 5 Tips for Building Customer Loyalty [Infographic]

4) Market Research

Another benefit of loyalty programs that restaurants often overlook is that they lend valuable insight into customers of all sorts. For example, if you are interested in gauging customer interest in a new menu item, you can serve it up in your loyalty program before moving it onto the menu once you have collected enough information about customer preferences. Similarly, if you run a loyalty program, you can then use the process of rewarding your loyal customers to ask them about their opinions, which can help you either strengthen your restaurants strong points or make corrections in its deficiencies.

Of course, it is important to note that not all loyalty programs can fetch you the results you desire. If you are at a loss, consider teaming up with other businesses that have both the skill and the experience needed to run a successful loyalty program.

Now it’s your turn. What experience have you had running a loyalty program in your restaurant? Share with us below.

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