Why Should Restaurants Run Loyalty Programmes ?
Switching to the new is the thing to do! The hospitality industry is changing its means and methods to keep up with the fast-paced dynamic economic environment for its sustenance and survival. Playing on the game plan of marketing, different restaurants and hotels are putting every effort possible to – Capture, Hold and Retain its customer base.
One such marketing tool – “Loyalty programmes”– holds a pivotal importance. A 2016 study found that customers who are members of loyalty programs, such as frequent flier clubs, generate between 12 and 18 percent more revenue than non-members. Highly-engaged customers buy 90 percent more often and spend 60 percent more per transaction.
It could be a discount coupon, membership cards granting points on every purchase and rebates on the next, festive offers etc. An array of schemes could be offered depending on one’s budgets and needs.
5 top reasons why you should run loyalty programmes
1.Customer base and customer life time value
Customer base creation and maintenance of present ones is equally important as is expanding your reach to the new potential ones. This is where loyalty programmes prove to be the best strategy for a long-lasting relationship between the restaurant and its customers. The Dotcom and mobile app age calls for adoption of such methodologies so as not to get rooted out. Loyalty programmes help to increase the spending decisions of customers over next targeted years. A customer may make repeat purchases based on such offers and points provided to him. It helps in customer targeting. As a result of this, a customer becomes from “Occasional to Frequent “
Researches show that it is a general observation that customers tend to repeat purchase if he gets not just better service but also something more. Such exclusivity or favoured gestures greatly affect purchase decisions of the buyer. Loyalty programmes can induce in the mind of the customers to go beyond their budget to avail the offers and discounts. Loyalty programmes offer cheaper ways to attract more sales. The personalisation this strategy brings in results in increased sales. They help in making happy diners.
Customers nowadays love to post and spread their experiences about a place, its food, the facilities and favours it provides, offers or schemes it has to offer on big social media platforms that reach millions of readers. Reviews could be both negative and positive that would also have a rippling effect on future clients and business. Promotions by way of loyalty programmes could help to create a positive reputation about the restaurant.
Loyalty programmes help in creating a brand value to your restaurant business. For new entrants in the market or the existing ones as well, it creates a special image and place in the minds of customers. With a brand value attached to its name, customers also feel a sense of pride being associated with it as a member or while obtaining special offers designed for them. Such programmes help to create a deciding factor for the customers to choose your brand over other. In very limited resource and investment one can create a solid base and space in the market. The returns on investment attained while applying these techniques gives higher sale at a very competent investment.
Managing customer database is an ongoing process which must run throughout the life of the restaurant. Sending reminders on birthdays, anniversaries or any other festive occasions like Christmas, Diwali or new year offers boosts the sale and performance of the restaurants. Sending out SMS or emails of special offers in festive seasons or occasions could not only nurture the relationship with customers but also help in the long run of the business. A database is created which automatically send reminders on numerous occasions to the customers for repeat visits. It helps to analyse customer behaviour knowing who likes what. Loyalty programmes are silently also a mechanism to understand customer feedbacks.
Loyalty programmes form an emotional bond between the customer and the restaurant. It also works as a bailing out mechanism. For example, recently restaurants around the national highways were directed to shut down bar and alcohol services. Brewery themed restaurants and for those whose main customer line up came from alcohol, serving faced the brunt of this government policy. But for those restaurants which ran loyalty programmes sent out various offers to their frequent visitors and could still manage to hold their position and survive. Customers fond of their favourite joints saved the day for the restaurants who were then diminishing and dying out.
One may juggle with varied forms introducing loyalty programmes as per the model of business and services the restaurant offers. It could be rebates, discounts, membership cards, percentage off on next purchase, extra deep discounts, referral points, birthday-anniversary special offers, festive offers, etc depending on the cost of installation and operation. A connection is established with the customer by these tools which help promote the business of restaurants and hence are an inevitable part of the restaurant business today.
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