3 Steps to Building a Restaurant Loyalty Program That Rocks

publication date: Jun 15, 2016
author/source: Leslie Wilson-Lopez

restaurant customer

Once upon a time, a "loyalty program" was a stack of punch cards that customers would, eventually, lose in the laundry. The concept was simple: if we punch ten holes in your card, you get a free sandwich, coffee, donut, or whatever our store sells. The programs were inexpensive and encouraged repeat visits to some unknown extent. I say "unknown" because it wasn't easy to glean data from these programs. Do we compare punch cards issued to those redeemed? How do we know how long it takes a customer to get ten punch holes? Wait, who the heck is going to enter and crunch all that data?

Since then, all rewards have gone digital, and more recently, mobile. The punch card is a mobile app. It allows us to elevate our game and engage with guests on a more personal level. But in no way does fancy technology guarantee the success of a loyalty program. You could dish out Donald Trump-size rewards in a gorgeous app and still fail. So if technology doesn't make or break a program, what does?

Our team at Togo's answered that question through personal experience. We built and optimized a digital loyalty program called Togo's Tribe, and it worked. Really well. Togo's Tribe reward members open our emails between 25 and 35 percent of the time, which is far above the average for our email club members. On National Sandwich Day in January - a double points day for Tribe members - we saw a 58 percent lift in visits and a 27 percent increase in spending. We find mobile push notifications to be incredibly effective as well. Offer redemption rates double if we send both an email and push notification, as opposed to a lone email. Overall, our loyalty members visit more often and spend more per visit than typical customers.

These stats are impressive and I share them not to brag but to validate a few tips I'd like to share. In launching Togo's Tribe, three things mattered more than anything else: the crew's support, the simplicity of the program, and the ease of the experience. If you want to build an enduring, valuable loyalty program, here's what I believe you need to know.

1. The Crew Has Got to Embrace the Program

The single most important factor in a loyalty program is your crew, the people on the front line. They must understand, talk about, and promote the program, otherwise it will fail.

It boils down to a conversation. Before checkout, the cashier should always ask, "Are you a member of our loyalty program? No? Well, let me tell you about it..." The cashier should talk about how to join and what the customer gets in return.

In addition to promoting the program, crew members should always remind loyalty members to check in and get their points. Forgetting the loyalty app is as easy as losing the punch card.

2. Keep It Simple

Can a fifth grader understand your loyalty program? If not, it's too complicated. Your program must be easy for guests to understand and easy for the crew to execute.

At Togo's, we use two simple formulas. $1 spent equals 1 point, and 50 points equals a $5 reward. We offer random double point days, birthday points, and other point earning opportunities to encourage repeat visits, but those two formulas never change. Note that we predicate points on dollars spent, not visits, which don't permit as much flexibility in the program.

The system must be simple because guests need an immediate reason to visit. If I'm 10 points from $5 and it is double points day, I know where I'm going for lunch.

3. Make Your Mobile App Friendly

In your mobile app, how many taps and swipes will it take your customer to earn or redeem rewards? If the answer is more than three, you're setting the program up for failure.

In a busy restaurant, with hurried customers clamoring for food, no one wants to be "that guy" (or gal) fiddling with a mobile app. The social pressure will scare people out of using the loyalty app.

On the other hand, if they can use your loyalty app within five seconds, they'll do it. At Togo's, we went with a three step process. Tap the app icon, tap check-in, share your temporary, three-digit check-in number with the cashier. That's it.

On the topic of ease, I'd add one more point: integrate online ordering with your rewards systems. As I've learned, that's not straightforward if your locations use different point-of-sale systems. Ultimately, an online ordering system should automatically deposit points in the customer's reward account and be able to redeem awards.

More than any other steps you can take, those three will help you build a loyalty program that not only survives, but rocks! Beyond that, creativity, surprises, and playfulness will distinguish your program from the pack. Throw in a free bag of chips on a whim or celebrate a holiday everyone else overlooks. Whatever you do, be more exciting than a soggy, paper punch card that someone left in the laundry.

Leslie Wilson-LopezLeslie Wilson-Lopez is the Brand Manager, Channel Marketing at Togo's Eateries