The Customer Connection

| May 01, 2007

When it comes to successfully attracting and retaining customers in the restaurant space, loyalty programs play a core role. But paper-based "hole-punch" cards are a thing of the past. The new wave of loyalty cards often act like credit cards and are just as powerful, flexible and scalable to quickly meet changing business needs with little to no staff required to maintain data. Above all, leading restaurant operators see the modern day loyalty card as a means to get closer to their customers through targeted messages, an elusive attribute that often has the ability to boost retention.

Keeping the vibe alive
For Sonoma County, CA-based Left Coast Restaurants, loyalty cards and targeted e-mail messages play a critical role in adhering to the company's mandate of creating a true neighborhood vibe. With five restaurants, all with different themes that generate anywhere from $1 million to $4 million in annual sales, targeted e-mail blasts help to quickly attract the right clientele to the right restaurants, according to Left Coast president and owner Dave Keegan.

"We have to reach out in different ways to our customers at different times," says Keegan. "We've seen a lot of success with e-mail blasts. It works really well. If we get a little live jazz outside or if the weather suddenly becomes nice after a period of bad weather, we can send messaging out."
With a customer database of 7,000, Keegan says he typically sends e-mails out around lunch hours, an effort that regularly generates a few hundred customers. Left Coast's e-mail campaigns are powered by San Diego-based Blue Hornet Networks, Inc. (www.bluehor net.com). Keegan says customers visit www.leftcoastrestaurants.com to opt-in and provide important data such as birthdays and anniversaries.

"We try not to [e-mail] too often," says Keegan. "If we do it more than every few weeks we don't get the retention. But if we give away something, the turnout is huge." Keegan says his most successful e-mail effort to date involved a recent survey that asked customers how many times they eat out and what they typically spend on an entrée. If participants completed the survey, they received a free entrée in return.

"The open rate was 40 percent and I received over 1,200 surveys back," says Keegan. "The Blue Hornet technology provides that instant feedback about my clientele which is huge. Not only did I get a lot of great information from that single effort but it generated a lot of immediate business as well."

Also, a gift cards module from Digital Dining (www.digital dining.com) makes it easier for Left Coast to track monetary value compared to paper gift cards, as amounts are automatically deducted each time a patron uses the card. The "S'mileage Card" is a current retention strategy for Left Coast where once people get assigned cards they receive 10 percent credited to their cards every time they dine. For every $250, the patron receives $25. "It's all charged to the card," says Keegan. "I don't have to redeem it for them; it's all done electronically." The S'mileage cardholders are also entitled to Wine Wednesdays (50 percent off any bottle of wine) and free birthday dinners.

Keeping it personal
For popular restaurant chain Chevy's Fresh Mex, getting to know customers is a critical retention strategy, even as the franchise expands by leaps and bounds. In 2001 the company switched to a corporate system, powered by Squirrel Systems (www.squir relsystems.com), which enables the control of messaging for all locations from one central location. "We don't have to change prices or add new items on an individual basis," says Esam El-Qunni, managing partner, Chevy's Fresh Mex. "We enter updates into the system and shoot it out to the locations and its there."

A CRM piece of the Squirrel system, also hosted at the Chevy's main office, acts just like an ATM card, whereby Chevy's patrons build points that can be used at all participating locations for free meals and discounts. But according to El-Qunni, the beauty of the system tells Chevy's exactly what item customers ordered.

"If they ordered a steak fajita with no onions and extra tomatoes, it tells me all of this information," says El-Qunni. From this, reports can be pulled up for all of the birthdays for the month and personalized postcards can be created that might say: "Come and enjoy a steak fajita with no onions and extra tomatoes."

Chevy's CRM system also keeps track of the customers that employees serve and the Chevy's restaurant they are most likely to frequent. "We can find out if a customer is expecting a baby by contacting the server and asking when the due date is and if there is something special we can do for them," says El-Qunni.

There are approximately 20,000 members involved in Chevy's CRM system of which 15,000 opted to receive e-mails. A large e-mail base makes it easier to take advantage of such timely holidays as Cinco de Mayo, where Chevy's can send a broad message and coupon. The system also has the ability to alert Chevy's to members that haven't been to one of the restaurants in six months. "We can send these individuals messages and if it bounces back or is returned, we will at least know that they moved," says El-Qunni. "It lets us know who frequents us, and if we made a mistake, we can take action to correct it."

Creating a cool club 
For more than eight decades, The Palm Restaurant Group has proudly served huge cuts of USDA prime-aged beef, jumbo Nova Scotia lobster and premium seafood with attentive service and a unique atmosphere. The Palm currently has more than 25 restaurants in 24 cities across the United States, Mexico and Puerto Rico. Not surprisingly, The Palm pays a lot of attention to attracting and retaining customers by both growing relationships with existing guests and attracting new guests through an innovative mix of neighborhood/relationship marketing, direct mail and e-mail marketing, aggressive public relations, strategic four walls marketing programs and strong word-of-mouth, according to Kathy Turley, senior marketing manager, The Palm Restaurant Group.

"The restaurant general managers are an integral part of what we call 'The Palm Experience,'" says Turley. "Whether introducing themselves to first-time guests, greeting regulars by name, meeting newly enrolled 837 Club members or reaching out to our most loyal guests/members, the managers are key in developing a one-on-one relationship with guests."

 Turley says The Palm Group's 837 Club loyalty program is the company's leading asset in marketing The Palm brand, and growing and retaining its guest base. Upon joining the 837 Club, members receive points for every dollar they spend at any Palm location, which can be redeemed for anything from The Palm Restaurant Cookbook, to a weekend getaway, to a caricature on the wall at their favorite Palm.

"The loyalty program helps to supplement the managers' efforts by tracking member visits, allowing them to easily identify their most frequent guests, as well as those who have not recently been in the restaurant who they can then check in with," says Turley. "We rely on the restaurants to enroll new members into the loyalty program and each restaurant has an enrollment goal, which is tracked and reported on each month."

Through POS provider Micros Systems, Inc. (www.micros.com), The Palm has integrated its 837 Club loyalty program with its POS, which has enabled the company to capture member preferences where they previously weren't able to. As a result, The Palm can now communicate more effectively with guests and target promotions accordingly. "We are also looking towards using electronically transmitted certificates which have real time redemption capabilities," says Turley.

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