Is Starbucks secretly a bank? That question got social media buzzing recently. And it points to something that hospitality businesses often miss — loyalty programmes can deliver more than meal deals.
The Starbucks story which caused quite a stir came from a tech consultant who commented on the huge balance on the company’s rewards programme. “In other words, customers are lending Starbucks $1.6 billion in cash,” he figured.
The numbers have been kicking around for a while and some analysts have done a deep dive into the financial implications and what this tells us about consumers.
Perhaps, there are two big takeaways from the story. Firstly, customers are extremely comfortable devoting time, money and wallet space to loyalty programmes. And secondly, the spin-off benefits to cafes, bars and restaurants can be more than people imagine.
Getting a strong ROI
If you think that reward programmes are too complex or costly, then think again. If it’s worth someone returning to your establishment a second time, then it’s worth it for them — and for you — to start building a relationship that extends beyond the transaction.
The return on investment (ROI) can be significant when you turn occasional customers into regular diners. Loyalty programmes also give you the chance to personalise your relationship with your customers, based on their names, preferences, birthdays and other special occasions.
When to launch your programme?
The best time is … anytime. But the most obvious opportunities are around rebranding activities, new menus, or when you sense the competition is getting more intense — and you want to boost loyalty. Be aware that your competitors may already be using their loyalty programmes to attempt to win over your customers.
If you want to get your staff on board, you can always create an incentives/rewards system for them too, relating to how many diners they each succeed in signing up for the loyalty scheme.
What type of programme do you need?
It’s true that choosing a loyalty app can be a minefield, especially when it comes to costs and complexity. But you shouldn’t need to scout around for options if you’re using Next-Gen restaurant tech. A quality system will have its own tools to get you up and running rapidly — and also be able to offer additional support for some of the popular loyalty apps.
Defining the type of programme you need is an important issue and could be more about the nature of your business, your customers, and what’s most likely to keep them coming back.
Here are three types of loyalty programme you can consider to get started:
- 1: Rewards: Customers earn points — with the quantity relating to the value of their order. If you wish, some items on the menu can be excluded from the scheme. Rewards points can be used to pay for future orders in full or in part.
- 2: Discounts: Customers use the programme to get a discount if they visit your restaurant regularly. They may get a fixed discount or it could depend on the amount of all their orders at your venue. You can provide a discount on all or any particular menu items.
- 3: Free items as a reward: If customers buy the same item a number of times, they quality for a free one. For example, every 10th cup of coffee or burger is free. Their loyalty programme keeps track.
With a unified Next-Gen restaurant system, you can stay on top of your loyalty scheme — without things getting out of control.
First, you register customers in-store or they can sign up online. You can provide a link via a QR code, or a link on your website, or via social media. The customer needs to enter their phone number. The system then sends them an SMS to their number — and your staff can issue a physical card.
Customers registering online also have to give their email address. They then receive a code that has to be keyed in to complete the registration. After that, they can check their reward points or purchases in their account history.
As an alternative to swiping physical loyalty cards, some businesses and their customers may prefer to scan barcodes direct from diners’ mobile phones. This keep things ultra simple and may be more convenient for fast-food restaurants and coffee shops.
Talk to our team about rewards schemes. We’ll be glad to help explain how you can set up a loyalty programme — or see how your existing scheme can combine with iiko.