Restaurants Canada: An Appetite for Rewards

Restaurant and dining loyalty rewards programs have come a long way from the one-per-visit punch card days... or have they? According to our Shifting Loyalties industry report, only 20% of Canadian consumers have active restaurant loyalty memberships and rewards

NRF Retail 2018
Restaurant and dining loyalty rewards programs have come a long way from the one-per-visit punch card days… or have they? According to the recent “Shifting Loyalties in Canada” report, which studied shopper and diner behaviours across the nation, only 20% of Canadian consumers have active restaurant loyalty memberships and rewards - compared to 77% for the grocery sector and 41% for convenience retail. For restaurateurs, this represents a missed opportunity, not only to engage with guests and increase their loyalty, but to gather important data that can drive a more profitable business.
Yet getting loyalty right isn’t only about motivating someone’s next visit to your establishment. It’s about knowing who your patrons are and creating valuable rewards that result in meaningful (and memorable!) experiences with your restaurant brand. Understanding who your customers are goes beyond recognizing their name… it’s knowing things like:

•  How often they visit, on which days and at what time
•  What food or beverages they typically purchase
•  If the specials or discounts you promote will persuade them to visit more often - or purchase a certain food/beverage
•  The amount of money they’re willing to spend
•  What kinds of offers actually drive behavioural change across channels
•  How they interact with your brand on other platforms, including your mobile app or social media channels
•  Where they live
When implemented correctly, a loyalty or rewards program can easily capture this information, allowing you to better engage with your diners and build loyalty in a highly-competitive market - while simultaneously driving revenue for your business. Whether you’re just getting started or are looking to enhance your program, here are three ways you can put your loyalty efforts on the track for success:

1. Use data to optimize loyalty initiatives based on diner preferences

Customer data is a critical, if not the most important aspect, of getting loyalty right. The more you know about your customers, their preferences and behaviours, the more effective your rewards become. Having access to data enables you to see which promotional efforts have been successful with each customer in the past, and likely will be again.

Capturing this data is not an easy task, but for the first time consumer behaviour and emerging technologies have converged to make this ambitious goal cost-effective to realize at scale. Our “Shifting Loyalties in Canada” report found that 27% of consumers don’t want restaurants to use their personal data for marketing. However, as patrons experience the positive results of the information they share (a discount on a meal they order often, a free meal for the kids or the option to make a charitable donation), they will increasingly share more data to receive what they want: rewards that are personalized based on their preferences and based on a combination of both transactional and non-transactional actions.

How do you get more data? By using what you have today, even if it isn’t much. Analyze the data you have on your customers and start creating simple offers based on their individual preferences. Customers need to feel that the effort they are putting into your brand and loyalty program (if you have one already) is being rewarded accordingly: with relevant, meaningful and valuable rewards, communications and a personalized experience with your restaurant.

Even if you start small, over time you will build a comprehensive portrait of your patrons that can be used to encourage them to visit more often, get them to spend more and generate more revenue for your restaurant.

2. Re-orient promotional strategies toward digital and mobile

More than 80% of Canadians use mobile phones regularly and are increasingly open to more digital, mobile and personalized engagement opportunities — yet many restaurants haven’t incorporated the mobile channel into their promotional strategy. An overwhelming 83% of Millennials, 64% of Gen X and even 34% of Boomers prefer to earn, monitor and manage points, as well as redeem rewards on their mobile device.

In fact, Canadians across all generations are primed to use the mobile channel for receiving offers and rewards, which means restaurant owners must embrace mobile technology to provide the type of experience that consumers have come to expect from all the brands they engage with. Moving your promotions and rewards to a digital-based platform also has perks for your business: more streamlined operations and deeper insights into your customer base that you can leverage for more effective promotions in the future.

3. Embrace new methods of customer engagement

Are your current rewards limited to food and beverage discounts? Our data shows that Canadian consumers are open to earning non-transactional rewards – the kind of experiences that go beyond purchases to create emotional loyalty and advocacy for their favourite brands. With an appetite for experiential rewards, they’re open to taking part in a survey (69%) or visiting a brand’s website (46%), to more advocacy-centric behaviours like sharing on social media (24%) or providing a review (57%). This is an ideal opportunity for restaurants to create more dynamic rewards that will boost customer engagement, increase activity within a loyalty program, keep your brand top-of-mind even after the dining experience and ultimately, gather additional data on your patrons.

In order for any promotional activity or rewards program to be effective at driving revenue for your business, it must first and foremost provide value to your customer. By understanding each customer’s dining preferences and serving up the most relevant offers and personalized rewards, your restaurant will be well on its way to creating stronger brand loyalty, connecting with your diners, and building your business.