Program Puts McLoone on Track to Hit $1M in Loyalty Revenue in 2010

By Tim McMahon, Director of Operations, McLoone Management | September 02, 2010

Building customer loyalty is crucial to a restaurant's growth, brand awareness and ultimate success. When McLoone Management, owner and operator of six table service restaurants in New Jersey and Maryland, decided that they wanted to expand from a single site to at least 10 locations over the next 10 years, it was clear that a new restaurant technology solution was needed to support that anticipated growth. More specifically, McLoone knew that developing a customer loyalty program would be key to both growing the brand and being able to better market to customers. This realization led McLoone to select Radiant Systems' Aloha Enterprise solution because its loyalty and gift card applications have the ability to support several loyalty and marketing programs across a multi-site restaurant operation.

How the Premier Club Works
McLoone developed its Premier Club program in 2007 with Aloha Loyalty and Aloha Stored Value. The loyalty club currently has more than 5,000 members and averages 1,000 new members annually. Guests are charged $25 to join, but membership comes with $20 pre-loaded on the card. McLoone want their customers to see value in joining the Premier Club and to get their money's worth of becoming a member. They also knew that as a management team that they didn't want to manage a database that has no value, like many restaurants that just give loyalty cards to anyone.

One of the things that makes the Premier Club successful is all of the perks that are offered to members. For example, McLoone offers half-priced bottles of wine, preferred seating, discounts off of retail purchases and $40 rewards loaded back onto cards for every $500 spent at their restaurants. So far, McLoone has given four percent of their revenue from the Premier Club back to customers in the form of rewards.

Besides the Premier Club program, McLoone also uses the capabilities of Aloha Loyalty and Aloha Stored Value to manage a dozen different local programs, such as co-branded residency cards for patrons living in large neighborhoods where their restaurants are located, and cards for their managers that administer 50 percent off their meals. Other local businesses use McLoone's gift cards as incentives for trying a new service. In addition, McLoone uses loyalty cards as a way to give back to the community because charitable giving is a large company priority. One thing that they have discovered that saves the company thousands of dollars annually is transitioning some of their donations from gift cards, which cause tax liabilities, to frequency cards that comp off the appropriate dollar amount.

More recently, McLoone started selling their gift cards in local Sam's Club and Costco stores as a way of extending their marketing efforts, brand recognition and revenues. This marketing initiative is easily supported by Aloha Stored Value, and they have seen great results from selling their gift cards through these retailers. For example, during the first eight weeks of selling cards in two Costco stores, consumers purchased more than $120,000 in gift card value.

How McLoone's benefits from their programs
McLoone has seen extreme value in Radiant's Aloha Enterprise solution, especially with all of the programs that can be supported by its loyalty and gift card applications. McLoone's net revenue of purchases from Premiere Club members has increased 8.8 percent annually for the past three years, and they are on track to have more than $1 million in revenue from loyalty club purchases in 2010. They have learned that customers see value in their programs, and in some cases, they will load up to $1,000 on their cards in order to receive a 20 percent rebate during select periods. Their restaurants have clearly differentiated themselves from their competitors because of the programs that they offer.

Tim McMahon has worked for McLoone's since 2003, when the company had one restaurant in Sea Bright, NJ. Tim took over as the general manager of The Rum Runner, oversaw the development of the company's second restaurant in 2005 and opened McLoone's Pier House in Long Branch, NJ as the general manager. In 2006, he moved to his present position, director of operations, and worked with Tim McLoone to lead the company's growth over the following four years. Prior to joining McLoone's, Tim worked as a general manager for several national and regional companies including the Hard Rock Café, Houlihan's and Bertucci's.

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