Making a Success of Loyalty Programs [Part II]
In part one of this article, we’ve broken down the main differences of 4 common loyalty programs used in the hospitality industry. When done right, a loyalty program can contribute a good revenue proportion to your bottom line. However, there’re a few things to consider before launching your loyalty program to make it a success.
5 things to pay attention to when creating your loyalty program
1. Go digital
We are on our phones a lot of the time. 75% of customers would engage more with a loyalty program if they can access it from their phones, so reach them where they are.
Going digital not only comes with benefits for customers but also provides businesses with valuable data they can use to better communicate with their customers for an even higher retention rate.
2. Set up rewards
How do you best determine the number of stamps or points required for a customer to claim their reward? After all, customers will only stay engaged if they see the rewards as achievable within a reasonable time frame.
Have a look at your average customer visit frequency as well as the average amount they spend. This will give you an idea of what rewards are right for your business.
3. Types of rewards
The most important part of a successful loyalty program is creating incentives with enough perceived value to bring customers back, whilst also keeping it financially viable for your business.
Here are some questions to keep in mind:
- Which rewards would be valued most by your customers?
- Would they prefer a free meal/drink or a cash discount?
- Are your rewards relevant to your business?
- Have you asked your customers? Gather some feedback beforehand through a survey or poll
4. Customise it to your brand
Make your loyalty program unique to your business and recognisable for your customers by incorporating your brand colours, logo, etc.
Also, be creative with the naming (Dunkin’ Donuts ‘DD Perks’, Brewdog’s ‘Equity Punks’) to create a community feeling. Being part of something special will increase customer engagement and create a fear of missing out amongst those who haven’t joined yet.
5. Encourage sign-ups
Placing your stamp cards next to your till and hoping that customers will take them, probably won’t do the trick. You need to actively encourage sign-ups.
Ideas to boost sign-ups:
- Reach out to your customers via email & SMS
- Promote special sign-up offers and deals
- Promote it on your social media on a regular basis and use pinned posts
- Create a pop-up or banner on your website
- Turn your loyal customers into advocates – “Refer a friend and get 10% off” or “Get extra points/stamps if you refer a friend”
atis restaurants did a great job with their loyalty card intro email which they sent to their whole database. They included a QR code so that customers can directly download their digital stamp cards from the email.
What’s next? – the work is not done once they’ve signed up for your loyalty program.
You have to build and nurture your customer relationship through regular communication to make your loyalty program a success. Send out reminders via email & SMS to keep customers filling up their stamps and collecting points (“One more stamp to go …”).
You can also further increase interaction with special treats on birthdays or give them early access to the new menu, event bookings, etc.
Not sure which loyalty program is right for your business? Have a read of Part I of this article, where we’ve compared 4 common loyalty programs for you.