Embracing Personalization: The Key Ingredient in Successful Restaurant Loyalty Programs

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In the face of challenging economic conditions, including labor shortages and rising costs, restaurants in 2024 are seeking innovative strategies to meet revenue and profit targets. Many are turning to loyalty programs as a solution to attract and retain customers. However, relying solely on a basic rewards system may no longer suffice in today's competitive landscape. To truly foster customer loyalty and differentiate themselves, restaurants must embrace the concept of personalization.

The Importance of Personalization:

In today's saturated market, consumers are bombarded with brand messages and offers. Personalization isn't just about standing out; it's about building strong relationships with loyal customers, encouraging interaction, and making reward redemptions more satisfying to cultivate genuine loyalty.

Industry Trends:

An article by Restaurant Dive, published in January 2024, highlights the growing trend of restaurant chains launching or revamping their rewards programs in response to heightened competition and evolving customer expectations. Major players in the industry, including Starbucks, Sweetgreen, and Cracker Barrel, have recently revamped their loyalty initiatives to meet these demands.

Examples of Personalization in Action:

Let's delve into some industry examples of restaurants successfully implementing personalized loyalty programs-

Chipotle has employed a personalized decision engine to determine the rewards offered to its members through its "Freepotle" program, which provides free food items, like free chips with a $5 or more purchase on orders placed and fulfilled in-restaurant or via the Chipotle mobile app, to members in the U.S. and Canada throughout the year. The company also introduced real-time interactions and gamification features such as achievement badges, and early access to new menu items and merch to deepen customer engagement. The rewards program grew almost 14% to more than 36 million members in 2023, indicating a successful implementation of personalization.

Another notable example is Starbucks, a brand renowned for its personalization efforts. Through their loyalty program, My Starbucks Rewards, customers earn stars for their purchases, unlocking various levels of rewards and benefits. Starbucks takes personalization further by allowing customers to customize their favorite drinks to their liking and offers suggestions based on past orders and preferences, giving customers a truly personalized beverage journey. Members are also given invitations to try new offerings and can collect up to 100 Bonus Stars as a reward. Guests also look forward every year to a birthday treat to celebrate their special day. Plus, they enjoy complimentary coffee and tea refills. This personalized touch not only enhances the customer experience but also drives ongoing engagement and loyalty.

P.F. Chang's also stands out as a brand deeply committed to personalization. P.F. Chang's Gold Rewards Program allows guests to earn points and redeem rewards for their purchases. Members earn 10 points for every dollar spent on qualifying food and non-alcoholic beverage purchases at participating locations. Once they accumulate 2000 points, they receive a $15 reward, which can be used for future purchases. Members receive a complimentary dessert or appetizer during their birthday month. This thoughtful gesture not only enriches the personalized experience but also underscores the genuine value the brand places on its customers. Additionally, members are allowed to use their points for online takeout and delivery orders as well, providing the convenience of ordering meals based on their preferences. The P.F. Chang’s mobile app also provides convenient access to account information and rewards status.

However, simply offering the same rewards to all loyalty members is no longer enough. Personalization towards specific demographics and individual preferences is crucial in retaining customers and fostering a feeling of being valued and understood. For instance, high-end steakhouse patrons might appreciate exclusive access to wine tastings or special events, whereas chain fast-food customers might prefer discounts or free items on their favorite menu items.

Benefits of Personalization

  1. Enhanced Customer Engagement:
    Personalized loyalty programs play a crucial role in driving customer engagement. According to a study conducted by Deloitte**, 53% of surveyed consumers reported that they would be more likely to make a purchase if a personalized offer was included. By leveraging customer data and preferences, restaurants can tailor rewards and promotions to meet the individual needs and desires of customers, resulting in increased engagement and satisfaction.
  2. Improved Customer Retention:
    Personalization also influences retention. According to another study by Deloitte, satisfied customers of a restaurant's tailored loyalty programs are more likely to continue their patronage. Catering rewards and incentives to individual preferences allows restaurants to strengthen brand loyalty and cultivate enduring customer relationships.
  3. Increased Revenue and ROI:
    Statistics show that personalization in loyalty programs leads to increased revenue for restaurants. According to the Deloitte study, personalized loyalty programs can generate up to a 200% increase in customer spend. Tailoring promotions and rewards to match customer preferences encourages higher spending per visit, driving revenue growth. Additionally, optimizing marketing strategies based on customer data and preferences results in a higher return on investment (ROI).

How to Overcome Loyalty Sign-Up Hurdles Using Ziosk Table Tablets

One of the pain points for restaurants is getting customers to sign up for their loyalty programs. Offering personalized incentives and benefits, enable restaurants can create programs that guests care about and are eager to join. For example, a restaurant could provide a sign-up bonus or an exclusive personalized offer upon joining the loyalty program. Emphasizing the unique value proposition and benefits of the program helps restaurants overcome sign-up barriers and attract more customers to participate.

Ziosk is proud to provide a solution to facilitate loyalty engagement at the table. By integrating loyalty programs into the payment flow of its Pro Server Tablets with Drop & Pay, Ziosk ensures that 100% of paying guests have the opportunity to engage with the program. This seamless integration enables guests to easily enroll in the loyalty program, access personalized offers, and provide feedback in one convenient interaction. This enhanced tableside engagement removes friction from the experience and strengthens loyalty program participation.

In addition to facilitating loyalty engagement, Ziosk also enables restaurants to gather valuable guest insights. Through the Ziosk tablets, restaurants can collect information on customer preferences, dining habits, and feedback. This data can then be utilized to further personalize loyalty program offerings and tailor promotions to specific customer segments. The insights obtained through Ziosk empower restaurants to make data-driven decisions, better understand their guests’ behaviors and preferences, and create meaningful experiences.

Personalization is key in restaurant loyalty programs, with targeted incentives, demographic understanding, and AI-driven customer data playing vital roles. This approach fosters loyalty, boosts retention, and provides valuable insights for future growth.

* Personalization will rule restaurant loyalty programs in 2024
** How Restaurants Can Unlock the Value of Customer Loyalty Programs

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