Leveraging Loyalty Programs for your Restaurant

Loyal customers are your most profitable customers. You should keep a close eye on your most loyal customers and ensure that you are coming up with enticing promotions to keep them coming back.

Loyalty programs can do this effectively.  

Instead of spending your efforts attracting new customers, you can implement a loyalty program to grow your relationship with your existing ones. They make your customers feel cared about and special. Rewards typically include discounted meals, free menu items, or even exclusive product. Having a loyalty program encourages direct orders, increases your retention rate, increases overall customer spending and allows you to track customer information used to get them back through the door.

Reasons to Implement a Loyalty Program:

  • Encourages them to place orders directly through you

Although third party will often still be used to increase visibility, this discourages them. With third party delivery, you lose the opportunity not only to gain the entire profit from the sale, but also from building relationships with your customers.

  • Increases customer retention rate

Did you know an extra 5% of customer retention can increase profits by at least 25%, and it costs five times less to keep a current customer than to land a new one. According to the leading CRM software company HubSpot, customer loyalty program members are 75% more likely to make another purchase after getting an incentive. ¹

  • Referrals through word-of-mouth

Customers referred by loyalty members have a 26% higher retention rate. ¹ If your customers are impressed with your loyalty program, they will most likely tell their friends and family about it, which is the most trusted form of marketing.

  • Can help to increase overall customer spend

Customer loyalty brings higher spending- especially if they are visiting more frequently because of your enticing promotions to get them back in the door.

  • The ability to track customer data

If you choose a cloud-based POS system, it has the ability to capture valuable customer data that can be used to create an effective loyalty program. With this information, you are able to create incentives that are relevant to your top customers making them more likely to engage with your restaurant.

Where to Begin:

  • Choose a relevant name

Choose a name to make the customer feel excited to be a part of it. What you call your loyalty program will determine how your customers feel about the program before they even enroll in it. Some restaurants just put the word 'Rewards' after their business name, but this lacks creativity and originality.

  • Decide on a reward structure

There are two types of reward structures you can use:

1. Rewarding for the number of visits: For example, you may choose to reward them on their tenth visit with a free pizza pie.

2. Rewarding for the dollar amount spent (typically kept track using a point system): A points structure are the most common type of rewards program where it allows customers to accumulate points they can later redeem for free product, cashback and other perks. You may also allow them to earn points for sharing your page on social or leaving reviews.

  • Online or offline based?

Do you stamp or punch out a physical card or do you have the resources to integrate a POS system to streamline customer data? Keep in mind that non-digital rewards do not give you data like a digital option does, so you won't have insights on what your best customers order, how often they order, or what keeps them coming back. Cloud-based POS platforms have the ability to process online orders, collect analytics and set up automatic marketing campaigns to boost sales and drive repeat visits.

Some highly rated POS system options are:

The Keys to Successful Implementation:

  • Simplicity

The key to a good loyalty program is to make it simple. Most customers by now understand the concept of a rewards program, whether there is an accumulation of points or visits that earn you rewards. Customers that find a program complicated will most likely not follow through. No one wants to be a part of a loyalty program that has a long list of rules and regulations to follow.

  • Awareness

Create a buzz around your new program by using signage, pop-up tents or flyers in your restaurant. Take it a step further by using a QR code on your promotional material that brings them directly to a form to sign up. Train your employees to mention the new program they can enroll in at checkout. Give everyone a few benefits to pitch to the customer, as well as answers to commonly asked questions.

  • Track sales correlated to promotions

By tracking sales relative to your promotional tactics, you are able to tweak your program as needed. This part is easy to do if you choose a digital or online rewards program that tracks customer visits.

  • In combination with email marketing tactics

Monthly email blasts can provide an easy and effective way for you to share your newest offerings with customers and ensure that your most loyal customers are always the first to hear about exciting new promotions or limited time offers. You may choose to use a built in service your cloud-based POS system provides, or use a separate site such as MailChimp or Constant Contact.

A successful loyalty program is one of the most effective tools that a restaurant can use to drive direct orders and increase overall sales. Do you think a loyalty program is right for your restaurant at this time?


1. Hubspot The Beginner's Guide to Building a Customer Loyalty Program July 2021