3 Reasons Restaurant Loyalty Programs are Necessary for Success

Despite restaurant industry disruption caused by the COVID-19 pandemic and ongoing economic and financial concerns, Americans still love dining out. In fact, nine out of 10 people still want to go out and have a meal at a favorite restaurant, according to NRA’s 2024 State of the Restaurant Industry. 

This is fantastic news for the industry. In 2024, it’s anticipated both restaurant sales and hiring will increase, as operators need more employees to meet customer demand.

That said, competition is always fierce in the restaurant industry, and consumers have more options than ever. Providing great service and food is the bare minimum these days.

Restaurant operators now need to actively persuade consumers to get them through the doors and keep incentivizing them to hold their attention. One of the most effective ways to do that is with a well-executed loyalty program. 

When done right, a restaurant loyalty program builds a strong customer base, boosting repeat business and sales. Keep reading to learn why restaurant loyalty programs are a must-have in today’s competitive market.

1. Dining Rewards Help Customers Feel Seen 

Consumers have more options—and more convenience—than at any other time in recorded history. That’s a good thing. However, with so many businesses competing for their attention, it’s easy to feel lost in the crowd. 

Personalization is the key to breaking through the noise and making them feel valued. More than that, personalization is now an expectation. According to Forbes’ 2024 State of Customer Service and CX Study, 81% of customers prefer companies that offer a personalized experience. 

It makes sense. Consumers want to believe that businesses see them as real people with unique preferences and needs. Business operators should want to give their customers that same experience.

Through a restaurant loyalty program, you can offer dining rewards and other loyalty program benefits guests earn with each purchase. Your customers can then use those dining rewards or dining points toward future visits to receive free menu items or discounts.

You may send them a freebie on their birthday or anniversary. You could even send tailored promotions, such as a free menu item coupon or bonus dining rewards, for menu items they order often.

You could also offer exclusive perks, such as early access to menu items or entrance to a special VIP event. All  these personal touchpoints make customers feel special and entice them to visit your restaurant. 

However, to offer that level of personalization through dining rewards and other marketing tactics, you need accurate, comprehensive data. Data capture through a restaurant loyalty program is vital. 

Equally important is choosing loyalty program software that offers robust analytics so you can have key insights into customer preferences and behavior at your fingertips. Your platform should also have segmentation and marketing automation capabilities, so you can efficiently send the right marketing messages to the right people at the right time.

2. Restaurant Rewards Programs Can Help Combat Inflation 

While there’s plenty to be optimistic about, the hospitality industry always faces challenges. 98% of operators say higher labor costs and 97% say higher food costs are issues for their restaurants this year. [National Restaurant Association] At the same time, customers are also feeling the weight of higher prices.

Restaurant rewards programs are a win-win, offering customers much-needed savings when they want to stretch their budgets. Free items and “Buy One, Get One Free” deals can be especially appealing right now, but even dining rewards and discounts can keep them coming through the doors.

It’s all about offering them value for the products they already want to buy, which is why analytics and automation capabilities are so critical. For example, our AI to IASM solution analyzes customer behaviors and then automatically sends targeted, personalized offers and messages based on those behaviors and preferences. 

Restaurant rewards programs also provide powerful customer insights you can use to cut costs, better serve customers, improve marketing, and increase profitability (both short-term and long-term). That may be why 67% of restaurant operators are planning to improve their customer loyalty program this year. [KPMG]

And 40% are planning to use data insights to better understand customer preferences and become more competitive. [Restaurant Dive]. The benefits of restaurant rewards programs—as a means to combat rising costs—are proving to be worth investing in a leading loyalty program platform. 

3. Restaurant Customer Loyalty Is Key to Scaling Your Business 

When we talk about growing your restaurant, we must include the significance of your most loyal customers. Restaurant customer loyalty is the foundation your business is built on. Loyal customers: 

• Come back again and again. They like your food. They like your service. They feel like they’re getting real value for the money they spend.  
• Spend more at each visit. They trust your brand and staff. They feel confident that if they try something new, they’ll like it. Plus, consumers with high loyalty and affinity want to help your restaurant succeed, so they’re willing to spend a little more cash to help keep your business operating.  
• Talk about your restaurant—a lot. Customers will recommend your restaurant to friends, family, coworkers—and complete strangers. They’ll promote you on social media. They’ll refer you to special events (e.g., kids’ sports banquets, work functions, social celebrations).  
• Tell you what they think. One of the biggest benefits of strong restaurant customer loyalty is your most loyal customers will dish out plenty of feedback (pun intended) because they want you to succeed. They’ll tell you when service is fantastic—and when it drops. They’ll tell you when a menu item doesn’t meet their expectations and when it exceeds them. 

Keeping your most loyal customers happy by providing outstanding food, ambiance, service, and value is the key to scaling. With the financial footing and word-of-mouth marketing they provide, you’ll have the money needed to target new customers.

Rewards programs can be instrumental in building restaurant customer loyalty and satisfaction, empowering your customers to benefit from their patronage, surprise them with gifts, and keep them engaged with personalized offers and messages. Ultimately, restaurant rewards programs go a long way toward keeping your most loyal customers around for months or years to come. 

On the operational side, a restaurant rewards program can provide you with predictive analytics and in-depth insights, so you can make your marketing much more efficient and successful. Because you’re targeting the right people with the right messaging, you reduce marketing spend, while increasing sales.

Build a Restaurant Loyalty Program that Gets Results  

Paytronix includes a powerful self-service loyalty platform that makes it easy for you to enroll more customers, capture more data, and drive repeat business. In fact, our best loyalty platform clients have achieved 50-70% participation rates. To learn more, schedule a demo today.