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"86" mass paper coupons - implementing digital loyalty strategies for today's restauranteurs

Author: Sean Keith
For an industry that places such a premium on repeat business, “regulars” and reputation-based brand affinity, many restaurant loyalty programs are still surprisingly old-school. Rewards programs tend to be simple point-accrual exercises designed to entice customers with the promise of free items—but little attention is paid to who the patron is, let alone what motivates his or her visit and dining decisions. And despite living in an age of “Instagrammed” entrees and all-mobile-everything, the point of departure for many marketers continues to be the kind of status quo ‘free appetizer’ loyalty offers that many customers have simply outgrown.
In the food and beverage sector, traditional approaches to restaurant loyalty are beginning to outlive their usefulness. Restauranteurs who want to effectively engage their patrons and remain competitive in a crowded marketplace need to embrace a new vision of connected loyalty, one that leverages the mobile and digital channels their customers prefer, while benefiting directly from the substantial reach that audience platform provides.

Changing the Channel

For years, restaurants have distributed mass or ‘blind’ offers to their customers and potential customers in ways that are inherently static. Coupons couldn’t be tailored to each person, and at happy hour, everyone got the same 2-for-1, whether they were a regular or a walk-in.
Today, the mobile, digital and social channels are anything but static. And not coincidentally, these are the channels customers prefer. Our “Shifting Loyalties in Canada” survey found that support for mobile capabilities is strong across all demographics and regions, including 83% of Millennials, 64% of Gen X and even 34% of Boomers. And yet, when we look at loyalty membership across sectors, Canadian consumers engage the least (20%) with loyalty programs in the restaurant/dining sector, compared to grocery, where engagement is the highest (77%) and they have already embraced digital marketing into their loyalty strategy.
For restauranteurs, this proves there are significant advantages to using digital channels as the basis for their loyalty programs and to communicate offers to their customers:
• Mobile – Restaurants can take advantage of the ubiquity and connectivity of customers’ mobile devices by deploying loyalty apps, sending promotional SMS texts, and even using geo-targeted push notifications when a customer is in proximity to a location.
• Social media – The ultimate window into customers’ preferences, social media provides ample opportunity to engage with guests, understand their likes and dislikes, test out messaging, offer extremely targeted promotions and identify others that are similar to your best customers who may not be ‘known’ to your business.
• Digital couponing – Far more flexible than their mass paper predecessors, digital coupons can be both tailored and widely distributed at scale, while simultaneously reducing instances of fraud.
The overall opportunity that the mobile, digital and social channels provide is the ability to understand and collect information about the customer, and then customize subsequent offers to that individual or individuals like them accordingly. This is a powerful capability, both in terms of customer retention and new customer acquisition.

Connecting Data to Connect to Customers

In order to take advantage of this opportunity, restauranteurs need to do more than simply create mobile and digital versions of their traditional discount offers and loyalty programs. They need the technology to connect data from a variety of customer touchpoints – including in-store, online and on social media – to create a complete picture of each customer, including their preferences and behaviours. Only with that level of understanding can a restaurant determine which offer will best influence each customer to return, buy another round or even deviate from their typical order and purchase a more expensive meal.
Once a restaurant has collected and connected this data, it can be analyzed and used to take effective action, whether that be a promotional campaign or a loyalty rewards scheme. But it takes the right technology partner—like Eagle Eye—to help achieve these goals: contact us today to learn how.