Restaurant Loyalty Programs: Use Data Analytics to Drive Visits

By  Tammy Mastroberte | January 25, 2017

Engaging with customers to encourage repeat visits and increase sales is a huge part of a restaurant operator’s success strategy, and thanks to technology, this task is getting easier. According to Hospitality Technology’s 2016 Customer Engagement Technology Study, 84% of operators are driven to invest in customer engagement technology to enhance the experience and satisfaction of their customers, and this includes loyalty programs.
 
In fact, 41.3% of restaurants are already using a loyalty program and 27% are planning to implement one within the year. Using the data captured through these programs, operators can target customer segments with special offers, drive an increase in visits and more.
 
“We can see how often people come in, what they are buying, and based on that, what we think they might like,” says Carrie Henderson, marketing manager at Shari’s Café and Pies, based in Beaverton, Ore., and operating 95 locations. “We can tailor rewards based on this [information] and that’s where the data comes in and is really helpful.”
 
Shari’s launched its Café Club loyalty program in May 2014. Once customers register their card or sign up with the free app, they can get a free slice of pie. The company uses Paytronix its loyalty technology, which integrates with its MICROS point-of-sale (POS) system.
 
“We were one of the first to sign up for Paytronix’ check-level detail and integration with the POS, and as time has gone on, the data gathered has become really robust and valuable,” Henderson notes. “It adds another element to your loyalty program. Instead of just doing a blanketed offer to all customers, the detail from the program allows you to target offers based on guest behavior.”
 
Not Your Average Joe’s, based in Milton, Mass., with 26 locations is also collecting guest level data using Fishbowl, which integrates with its POS system. The company created guest segments based on customer behavior such as dinner-only customers or those who drink wine. Using these segments, it can create custom marketing programs to drive visitation, says Rob Gotti, chief marketing officer for the company.
 
“We will take a segment and create a test group and control group to see if we get a true lift from the promotions we are doing using the technology,” Gotti explains. “One of the longstanding questions is ‘Did we really need to do that discount program or are we just subsidizing visitation that would have already been there?’ and so we create a control group that mirrors the pre-program visitation pattern and then look at the response between the test group and the control group to measure the lift.”
 
Some operators are also taking advantage of location-based technology to know when their customers are at a location as a way of tracking visits. This is the case at Houston-based Café Adobe, with its two locations. It is using Turnstyle for customer engagement marketing and guest WiFi. As long as a guest has logged in once, the program will pick up his or her phone every time he or she comes into the store. It can also detect if the customer walks by and not enter the restaurant.
 
“We measure how often they come in, and we have offers we tie to it that get automatically sent to their cell phones, email or social media,” says Bob Borochoff, CEO and president of Café Adobe. “I wanted two things — to know more about customers and find an easy way to contact them that was not invasive because they opt in. We usually send them something free, like a free dessert, after a certain number of visits or to get them to come back in if they have not been there in a while.”
 
Known for its shrimp dish, Café Adobe offered a promotion for Father’s Day that gave customers two extra shrimp if that customer showed his or her cell phone screen to the server displaying the offer. Employees then tapped the screen and the customer could no longer reuse the offer, Borochoff notes.

End of Part One.

To read the second half of this story where restaurant operators discuss how they are segmenting loyalty data by visitor frequency, age, gender, even time of day or day of the week, to effectively engage with their customers, click here.

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