8 Benefits of a Customer Loyalty Program in Restaurants

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8 Benefits of a Customer Loyalty Program in Restaurants

With the tough competition in the food and beverage industry, many restaurant owners struggle to keep their doors open. In addition to serving the best dishes possible, you need to keep track of your bottom line. 

Since customers are the lifeblood of your business, you have to encourage them to return to your restaurant. While marketing helps attract new customers, retaining patrons is easier and more effective than getting new ones. In fact, the cost of attracting new customers is 5 times more than retaining existing ones. 

Overall, the success of many restaurant businesses depends significantly on customer loyalty, as it helps boost profit margins and sustainable growth. Also, it also enables access to key customer data, such as buying patterns. 

What Are Customer Loyalty Programs?

For restaurants, loyalty programs are systems that reward customers with discounts or special incentives, such as free menus and access to exclusive services and events, for their regular and steady support. Reward programs for customers are cost-effective ways to attract and retain clients. 

Various restaurant loyalty program ideas are designed to encourage customers to visit and spend on your restaurant repeatedly. It awards loyal customers with points, which can be converted for rewards. Restaurant customer rewards programs log the number of times a customer returns to your restaurant. 

So, how do you reward loyal customers?

One way to reward loyal customers when they reach the target number of visits is by awarding them with free offers. Another way is through a point-based system that allows customers to continuously earn points with every purchase made. It enables loyal customers to cash their points in anytime for some free food from your menu. 

Why Invest in Restaurant Customer Rewards Programs

A rewards program is a cost-effective solution to retain existing customers

Among the many benefits of loyalty programs are increased sales and stronger brand awareness. To reap these benefits, you need to implement them well at all levels. From the moment customers step into the establishment, they should be greeted warmly and ensure satisfaction throughout their stay so they don’t have to think about other places to eat next time around. 

However, you need to take your time scrutinizing the different types of customer loyalty programs that encourage customers to visit frequently. Be sure to choose the one that pays off in terms of increased revenues

  • Improves Customer Retention

In addition to serving great food and treating your customers warmly, a customer loyalty program is just an extra push to encourage first-time customers to come back. Retaining customers not only generates and boosts your profit margins but also improves your establishment’s atmosphere. Rewarding customers helps establish emotional commitment and increase customer lifetime value. 

  • Leads to Better ROI Than Coupons

Coupons only attract deal seekers who are just there for a good deal. These people may not even be familiar with your restaurant or have no intention of coming back. That is why this type of scheme, like Groupon, does not work, especially for small restaurant businesses. 

Restaurant loyalty programs, like a simple punch card or an app-based system, encourage customers who have already dined in your restaurant to return. For instance, after reaching 10 orders in your restaurant, customers will receive a free meal on their 11th order that is worth the average of their previous 10 orders. 

This strategy is far more cost-effective than investing in marketing campaigns that will bring in new customers through your door. This only shows that a loyalty program offers better ROI by targeting existing customers, not prospects. 

  • Reduces Customer Acquisition Costs

Reward programs can indirectly turn loyal customers into “brand advocates” as they will refer your restaurant to their friends, family, or followers. Compared to other forms of marketing, about 92% of people trust word-of-mouth recommendations from someone they know. 

Also, 86% of consumers are more likely to engage with brands they are loyal to and spread the word in their community. Loyalty programs show customers how much you value and appreciate their support for your business. Rewarding loyal customers by bringing in new ones is a sure-win solution. 

  • Builds Personal Relationships

Giving value to your loyal customers helps build an emotional bond and can make them feel appreciated. Loyalty and rewards programs enable you to determine who dines in your restaurant and how you can improve your service to meet their satisfaction and needs. 

Surveys report that about 66% of consumers sign up for a loyal program if it creates an ongoing relationship. When customers feel cared for and valued through loyal and rewards programs, you will reap the long-term benefits of their loyalty. 

  • Minimizes Customer Churn

One of the many benefits of a restaurant loyalty program is it minimizes customer churn. Rewarding customers for their loyalty encourages them to return and spend on your products or services. It also helps manage the expectation of your customer easily and ensure that they get exactly what they want out of the relationship. 

  • Increases Sales

Another obvious benefit of a loyalty program is higher sales. Even a 5% increase in customer loyalty can boost your overall profit from 25% to 95%. When implemented properly, a loyalty program can incentivize customers to frequently visit your food business and spend money to reap exclusive rewards. 

  • Offers Vital Business Insight

Having a loyalty program in place enables you to monitor your sales figures over time. This provides helpful information about the number of customers coming into your restaurant and the amount of money they spend each month. You can use the data for your future decisions about the types of promotion that appeal to both new and existing customers this way. You will know how to make them feel valued and satisfied every time return to dine. 

  • Better Customer Communication

Effective restaurant customer rewards programs offer restaurant owners a direct channel to patrons, which improves external communications. In addition to announcing new menu items and other exclusive promotions, it also enables you to share brand information and social media profiles with your prospects and existing customers. Using geo-fencing technology, you can effectively identify various franchise locations to customers where and when they can make their next stop. 

Restaurant POS system featuring a loyalty program software helps boost sales and ROI

Customer loyalty programs ensure a subtle way to market your brand without bombarding customers. The best part is that you do not need to invest too much effort to achieve your goals. All you need is to purchase a point-of-sale system in Toronto that features a loyalty program software to collect customer data and monitor their behaviour and spending habits so they can earn rewards. 

POSRG Canada believes in the power of long-lasting partnerships with customers. That is why we offer you a restaurant POS software that best suits your needs. Call us at (905) 332-8809, and let us know how we can help.


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