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How Do Restaurant Loyalty Programs Work? 3 Core Features
QDOBA, a long-time Paytronix customer, has a highly successful restaurant loyalty program, and part of that success is realizing the full value of an...
7 min read
Fine dining restaurants often experience fewer visits but a higher average order value (AOV) per visit, and typically, customers have a longer lifespan. FSRs and QSRs often see more visits but lower AOV per visit.
Tools like Paytronix track each of these variables in real-time, eliminating the need for spreadsheets and guesswork.
Five easy-to-track metrics may impact CLV, including:
Metric |
Description |
How to Improve |
Average Order Value (AOV) |
Average amount spent per order |
Upsell/cross-sell offers |
Visit Frequency |
The number of times a customer visits in a month |
Loyalty tiers and reminders |
Customer Churn Rate |
Percentage of customers who stop coming back |
Win-back campaigns |
Days Between Visits |
Time between purchases |
Re-engagement email/SMS campaigns |
Referral Rate |
Percentage of new customers referred by others |
Referral rewards |
These data points are trackable directly in Paytronix’s reporting dashboard, so no manual analysis is needed.
Customers often follow the same path on the customer lifetime value growth ladder, as illustrated below:
Thankfully, there are numerous strategies you can use to maximize CLV through targeted marketing and customer relationship management. This is one metric you can have some control over. Let’s examine how to increase it.
Customers frequently return to restaurants where they had an amazing experience. That’s why it’s critical to do everything you can to offer exceptional service that encourages repeat business.
Start by thinking through how your customers experience your restaurant from start to finish. Ask yourself the following questions:
Some brands build such exceptional customer experiences that customers remember them, return, and expect them. For instance, Chick-fil-A is one of the largest fast-food brands with drive-thru lines that frequently back up on streets. Employees tell customers, “My pleasure,” instead of just processing orders.
Olive Garden gives out chocolate mints, which they’re known for. The sandwich chain Which Wich gives each customer complete flexibility with their order by letting them choose all the ingredients and toppings they want on printed checklists.
Your customers aren’t all alike. A one-size-fits-all approach to marketing and customer retention is much less effective than targeted marketing programs capable of speaking directly to each customer’s needs and preferences.
When you segment your customer base into different groups, it’s much easier to send them engaging marketing campaigns they’ll respond to. This can increase customer lifetime value, as it encourages them to return to your restaurant.
For instance, you can create different segments based on age, income level, and family size. Ideally, you would send emails about a "kids eat free" night promotion to families who have children and happy hour promotions to customers who work and are over the age of 21.
Some other ways you can segment your customers to better target marketing efforts include:
Software solutions with integrated loyalty programs, CRM systems, mobile apps, and more can help you earn more and save more over time.
Investing $2.50 in a loyalty reward may lead to $50+ in added CLV. Putting money into CLV opportunities helps justify higher acquisition costs because retention is profitable, and you can use CLV as a forecasting tool: How many more customers like this do you need to grow revenue by 20%?
For example, Legal Sea Foods invested in a campaign to increase loyalty signups and, over time, increase customer lifetime value. The campaign resulted in a 60% increase in loyalty members within two weeks, and new enrollees continued to visit the following month.
Paytronix helps track the ROI of individual campaigns, enabling decision-makers to understand CAC-to-CLV ratios by customer segment.
Restaurant owners can optimize their marketing by focusing on strategies that work well for their restaurant type or size, ranging from enterprise to mid-size to small businesses.
Paytronix enables CLV-driven campaigns for all of the above segments through scalable technology and dynamic audience creation
Your restaurant’s loyalty program is the key to driving long-term relationships with customers and increasing customer lifetime value. Effective loyalty programs encourage customers to visit frequently, rewarding them for choosing your restaurant over competitors.
To maximize the benefits of your loyalty program, it’s essential to design it in a way that incentivizes frequent visits and higher spending with rewards that customers actually want. Ensure that rewards are attainable so that customers will benefit from participating in your loyalty program.
Personalization and customization are simple yet effective ways to engage with customers, strengthen loyalty, and encourage repeat business. With the technology available today, there are many ways that you can seamlessly accomplish this. Let’s look at two major methods:
A customer relationship management (CRM) system is a tool that restaurants often overlook. Since many CRM systems seem geared for longer sales cycles with repeated interactions, it’s easy to overlook how using a CRM system could benefit your restaurant. Utilizing a CRM system at your restaurant can help you personalize communications and maintain accurate records of important customer details.
Let’s say a customer makes a reservation at your restaurant for their wedding anniversary. You can train staff members to document this occasion in your CRM system and then send a “Happy Anniversary” email to the couple a few days before.
This can be set up and automated with your CRM system. A thoughtful greeting will leave a lasting impression and could prompt them to celebrate their anniversary at your restaurant again. It may even become a tradition for them!
We’ve reached a point in modern life where customers expect every business to have a mobile app. If your restaurant doesn’t have one, you’re missing out on dozens, if not hundreds, of daily customer engagement opportunities.
Mobile apps can personalize the experience your customers have. They can also be used as part of your loyalty program to deepen customer engagement.
Customers are most likely to return over and over again to the restaurants where they have a personal connection with the brand, owner(s), and staff. Not only does this create a more pleasant experience for customers, but it will also dramatically increase their lifetime value to your restaurant. Because of this, it’s logical to take steps to foster strong customer relationships.
There are specific actions you can take to build a strong sense of community between customers, your restaurant, and even your larger community. This includes hosting special events, creating membership clubs, and sponsoring the teams and activities that are important locally. This way, your restaurant becomes a key part of the larger community.
A part of building any connection is strong communication, and that’s equally true with your customers. By maintaining regular contact with customers through your company’s email newsletters, sending updates through social media, and using personalized messages, you can strengthen customer relationships.
Predictive customer lifetime value enables businesses to identify where their marketing efforts should naturally focus by using past data to estimate the potential value of new customers.
You can segment high-CLV customers for early access offers, and low-CLV customers can be re-engaged with bounce-back deals. Paytronix includes predictive modeling, allowing restaurants to automatically prioritize spending toward the most profitable guests.
Below you’ll find a 5-step plan to grow CLV that you can start today:
Software solutions such as Paytronix automate each of these steps, from segmentation to personalization to analysis, so restaurant teams can focus on operations, not marketing execution.
It’s more expensive to acquire new customers than to motivate existing customers to visit again. The higher your customer lifetime value is, the more reliable your revenue is. It’s in your best interest to foster long-term customer relationships and interactions that promote larger sales volume.
Paytronix is proud to partner with thousands of restaurants to help them grow. Check out our 2025 Loyalty Report to discover the latest practical strategies to drive higher customer lifetime value.
Want more customers and want them now? Book a demo today to see how Paytronix supports all of your restaurant marketing, sales, and customer retention goals.