Restaurant Loyalty Programs: Grow Business with Effective Rewards

Food is something we can’t live without. It keeps us alive and brings us together. Therefore, it’s no surprise that the restaurant industry is popular. The secret sauce of a successful restaurant is a combination of delicious food, top-notch service, a perfect location, and a memorable atmosphere. This combination ensures repeat business. You can further enhance customer retention and loyalty by encouraging customers to join loyalty programs. Offering exclusive rewards and promotions through these programs can turn first-time visitors into loyal customers, giving your restaurant an edge over the competition. In this article, we'll explore the best strategies for implementing effective restaurant loyalty programs and how they can significantly increase customer retention and boost your business.

Definition of Restaurant Loyalty Program 

The main goal of restaurant loyalty programs is to strengthen and build long-term customer relationships, reduce churn and improve customer retention, encourage more frequent visits, bring new clients, and ultimately increase revenue. 

Restaurant loyalty programs offer incentives such as discounts, cashback rewards, free meals, or exclusive deals as a way to thank regular customers and encourage them to keep coming back. Customers can earn points for each visit or every dollar spent, which can be redeemed for rewards, or they may receive special offers after a certain number of visits. 

Moreover, these programs track customer visits and purchases and provide insights into their preferences, which can help restaurant owners improve their services and boost customer satisfaction. Customers can join these programs through a mobile app, website, or physical card, and receive communication through email, text, or app notifications about deals and rewards.

For example, Starbucks Rewards program allows customers to earn stars with each purchase, which can be redeemed for free food, drinks, and special offers. These programs not only enhance the customer experience by providing valuable rewards and personalized offers but also benefit the business by increasing customer retention and encouraging higher spending per visit.

Types of Restaurant Loyalty Programs

The ideal rewards program for your restaurant should reflect your business model, goals, and specific needs. Take a look at these customer loyalty programs to find the perfect match for your clientele. 

Points-based loyalty program 

In this type of restaurant loyalty program, customers earn points with each purchase, which can later be redeemed for discounts, free meals and drinks, or other rewards. 

Example: Earn 10 points for every dollar spent, and redeem 100 points for a free appetizer. 

The Chick-fil-A One rewards program is another great example, where customers earn points for every dollar spent, which can be redeemed for menu items such as an Icedream cone. 

Item-based loyalty program

With an item-based loyalty program, customers earn rewards such as free or discounted menu items after purchasing a specified number of particular items. 

Example: Buy 6 coffees, get the 7th coffee free.  

Costa Coffee is a perfect example of an item-based loyalty program. Customers need to buy 10 drinks to receive one free. 

Promotional loyalty program 

This type of loyalty program offers rewards with set expiration dates to encourage customers to visit or order from restaurants within a certain time frame. 

Example: You can offer a free dessert to members of your loyalty program during their birthday month, encourage them to celebrate this special day at your restaurant. 

An excellent example of a promotional loyalty program is saving 15 cents per gallon at Shell for every fifth beverage purchased at Dunkin’ Donuts. 

Subscription rewards program

With a subscription-based rewards program, customers pay a regular subscription fee to receive exclusive benefits, such as discounts, free items, or special menu access. 

Example: Pay a monthly fee to get a free drink every day. 

Panera Bread's Unlimited Sip Club offers members unlimited refills of various beverages for $14.99 per month, with additional perks such as waived delivery fees on orders over a certain amount and exclusive promotions. 

Tiered loyalty program 

A tiered loyalty program allows customers to achieve different levels or tiers based on their spending or visits, with each tier offering increasing benefits.

Example: You can offer your loyalty program members Silver, Gold, and Platinum tiers with progressively better rewards. Alternatively, you can create your own tiers with unique names for each level. 

Chick-fil-A's tiered loyalty program rewards customers with points for every purchase, which can be redeemed for free menu items, and offers increasing benefits and exclusive rewards as they progress through higher membership tiers like Silver, Red, and Signature.

Benefits of Implementing a Loyalty Program at Your Restaurant 

Choosing the right type of loyalty program for your restaurant business may not be easy, but it is undoubtedly a worthwhile investment. The main benefits of restaurant loyalty programs are: 

01. Loyalty programs improve customer retention

Customer loyalty programs help retain customers by offering rewards and incentives for repeat visits, creating a sense of value and appreciation. By accumulating points or receiving discounts, members of your loyalty program feel they’re saving money or receiving special treatment. What’s more, they create a special bond between the restaurant and the customer, enhancing their dining experience. 

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This shows that having a loyalty program in your restaurant makes a lot of sense. 

02. Restaurant rewards programs boost the Average Order Value (AOV)

A well-designed loyalty program motivates customers to purchase more. In fact, after joining a loyalty program, 49% of consumers reported an increase in their spending. This happens because loyalty programs boost your revenue by providing opportunities for upselling and cross-selling. McDonald's is using cross-selling techniques by offering a “meal deal” where you can get a 4-piece McNuggets, small fries, a soft drink, and either a McChicken or McDouble for $5. If your customer loyalty program gives extra points when members order a combo instead of individual dishes, you'll sell more drinks and sides, boosting your sales. 

03. Loyalty programs gather valuable customer data 

Loyalty programs in the restaurant business are a goldmine for customer data. When customers sign up, they share valuable information like their favorite dishes, dining frequency, and spending habits. By using this data, you can create more personalized offers and promotions that will make customers feel appreciated and encourage them to come back. Additionally, tracking purchasing patterns allows you to refine your marketing strategies and menu. By analyzing customer preferences and feedback, you can enhance the dining experience, boost customer satisfaction, and drive sales. 

In short, loyalty programs turn diners into data, which is the key to crafting unforgettable culinary experiences and building lasting relationships. 

04. Loyal customers serve as advocates and bring in new customers 

How often have you visited a restaurant based on recommendations from friends? Quite often, right? No matter how far away it was, you'd still go, knowing you'd be treated to delicious food and great service. Now, imagine this: you have amazing food, a fantastic atmosphere, impeccable service, and on top of that, discounts or cashback for regulars. Such a place would surely make a name for itself. There's nothing better than satisfied and loyal customers who willingly spread the word about your business to their friends, colleagues, and family - for free! Isn't that cool? Word-of-mouth marketing can work wonders for your restaurant. 

Tips for Implementing a Loyalty Program to Make it Work  

Implementing a loyalty program in the restaurant business can be a powerful tool to increase customer retention and boost sales. By offering rewards and incentives, you can encourage customers to come back and build stronger relationships with them. Here are some essential tips to help you design and create a successful loyalty program that truly works. 

Choose the Right Rewards

First thing first, you need to choose the right rewards. You must ensure that the benefits of the program won’t harm your profit. Start by analyzing what your customers love most, like discounts, free meals, free merchandise, or exclusive experiences. Consider offering rewards like a discount on a meal, a free appetizer after a certain number of visits, a welcome drink, or even free delivery. 

Discount on a meal can be an effective way to encourage higher spending by offering it on orders above a certain amount. 

Free appetizer after a certain number of visits not only incentivizes repeat customers, but also introduces them to new menu items. 

Welcome drink can create a memorable first impression, making your guests feel valued and more likely to return. 

Free merchandise is a great reward in the restaurant business, as it increases customer loyalty and serves as a tangible reminder of their positive dining experiences. 

Free delivery is a great perk that can increase online orders, especially if it’s offered during off-peak hours to manage operational costs. 

Promote your Program 

If you want to maximize your reach and engagement, leverage a multi-channel approach. On social media, you should make regular posts and stories about your loyalty program’s advantages, including discounts or special offers on platforms like Instagram and Facebook. Partnering with local influencers can also help spread the word, as they can share their positive experiences and the rewards they received. To further inform your audience about the program’s benefits, include interactive content like polls, quizzes, and Q&A sessions. 

When it comes to email marketing, highlight new rewards and exclusive offers in your newsletters and add information about the loyalty program. Send welcome emails to new customers, outlining the benefits and enrollment procedures. Keep your members engaged with exclusive offers and reminders about expiring rewards. 

Within your restaurant, promote the program through signage, QR codes on receipts, and by training your staff to encourage sign-ups. Create a dedicated page on your website with all the details and a sign-up form, and write blog posts featuring success stories and member spotlights. Optimize your website content to attract customers searching for dining deals. 

Monitor and Adjust your Program 

A customer loyalty program for restaurants is a crucial strategic initiative that significantly influences a company’s long-term financial performance. To recoup the investments in program implementation and remain competitive, it is important to stay attuned to changes in consumer behavior and respond quickly. 

This involves tracking key metrics such as customer retention rates, which gauge how well the program keeps customers returning, and the frequency of visits, which measures how often members visit the restaurant and indicates engagement levels. Additionally, average spend per visit tracks the spending behavior of restaurant loyalty members compared to non-members. Furthermore, AOV (Average Order Value) tracks the average amount of money spent by customers per order, while redemption rates of rewards show how effectively customers are using the program’s benefits. The main focus is on how these metrics evolve.

Reviewing this data assists in identifying patterns and pinpointing areas that need enhancement. Staying updated with industry trends and competitor strategies can provide insights for adjustments. Regularly communicating with customers to gather their input ensures the program remains appealing and relevant. 

Finally, it’s important to understand that customer loyalty is always a dynamic measure. It represents the difference between the current state and what it would have been without the launch of the program. 

Top Examples of Successful Restaurant Loyalty Programs

Now that you understand what restaurant loyalty programs are, their benefits for businesses, and how to measure their success, let's explore some of the best examples of loyalty programs in the restaurant industry.

Chick-fil-A 

Chick-fil-A is a well-known American fast-food restaurant known for its chicken sandwiches and exceptional customer service. Founded in 1946, it has grown into one of the largest fast-food chains in the United States, with almost 3,000 locations across the US and Canada. The restaurant is also famous for being closed on Sundays, following its founder’s Christian values. 

Chick-fil-A’s restaurant loyalty program, called “Chick-fil-A-One,” offers a range of benefits to its loyalty program members. This program not only rewards frequent visits but also fosters a deeper connection with the brand, making every meal feel special. 

The program consists of four unique tiers: Chick-fil-A One Member, Silver Member, Red Member, and Signature Member. Members can earn points for every dollar spent by making qualified purchases online, at the store or via the mobile app. They can redeem these points to choose from a variety of menu items. As members progress through the tiers, they earn points faster and gain access to exclusive rewards and experiences. 

Loyal customers receive tailored offers, birthday rewards, and early access to new menu items. Chick-fil-A's loyalty program incorporates gamification elements, allowing customers to earn points and complete challenges. These features keep customers engaged and excited as they work towards rewards, making the dining experience more interactive and enjoyable.

People love the program because it provides a sense of value and recognition. The app is user-friendly, making it easy to track points and redeem rewards. Additionally, the program’s generous rewards and exclusive perks make it a favorite among customers who frequently visit Chick-fil-A. 

Flour Bakery + Cafe

In 2000, renowned chef Joanne Chang launched Flour Bakery + Cafe. Since then, it has become a beloved restaurant and bakery in Boston, United States, known for its delicious pastries, sandwiches, salads, beverages, and wholesome meals. With multiple locations, Flour Bakery has become a favorite spot for food lovers seeking high-quality, homemade-style dishes in a warm, welcoming environment.

The Flour Bakery loyalty program, known as “Flour Rewards”, offers customers various benefits to make their dining experience memorable. Every transaction a member makes at any Flour Bakery location earns them points that can be exchanged for free food and drinks. The program also offers special discounts, birthday treats, and early access to new menu items, among other exclusive benefits.

The Flour Rewards app is an essential tool for members, allowing them to track their points, view available rewards, and receive notifications about special promotions. To guarantee a seamless experience at the bakery, the app also offers a convenient way to order ahead. Members may easily earn and redeem rewards during trips using the app to access their digital membership card.

The “SWEET STATUS LEVELS” is the tiered loyalty program offered by Flour Bakery + Cafe. Customers can receive various rewards and bonuses from this program according to how much they spend and how often they visit. As members progress through 5 different tiers (Cookie Rookie, Frequent Flour, Flour Favorite, Flour Fanatic, Stickiest Bun), they can enjoy perks such as discounts, free food and beverages, charity donations, and exclusive access to special events.

Dunkin' Donuts

Since 1950, Dunkin', a well-loved American chain, has been offering tasty donuts and coffee to its customers. It's the go-to spot for a quick breakfast, offering everything from classic glazed donuts to savory sandwiches. With its friendly vibe, Dunkin' has become a beloved place to start the day right. 

Dunkin’ Rewards is a popular restaurant loyalty program that rewards customers for their purchases with points. Members earn points, typically at a rate of 10 points per dollar. Then they can turn these points into rewards. For example, customers can redeem 800 points for a breakfast sandwich, choosing from various options for meat, egg, cheese, and bread.

Furthermore, Dunkin' offers a promotion where rewards program members can enjoy fuel savings at Shell stations. By linking Dunkin' and Shell accounts, customers receive additional benefits and discounts. This collaboration not only adds value for members by offering diverse rewards but also helps both companies reach a broader audience, and increase brand loyalty, demonstrating how partnerships can effectively boost customer engagement and loyalty. 

Dunkin Rewards makes it easy for members to see their earned rewards. Whether they're using the Dunkin' App or visiting the site, their rewards are clearly displayed in their account when they're signed in. This convenience helps them keep track of their benefits and enjoy them seamlessly. It’s no surprise why the program is popular among frequent customers. 

Chipotle

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Chipotle is a popular fast-food restaurant chain known for its Mexican-inspired dishes like burritos, tacos, and bowls. The restaurant is celebrated for its commitment to sustainable and responsibly sourced food, emphasizing fresh, high-quality ingredients and offering customizable options to suit various tastes. Founded in 1993, Chipotle has grown to operate over 2,300 restaurants worldwide. 

Chipotle offers a loyalty program known as 'Chipotle Rewards,' designed to enhance customers' dining experiences with exclusive perks and benefits. Customers can earn 10 points for every dollar spent at Chipotle, whether dining in, using the app, or ordering online. These points can be redeemed for free food items, including fan favorites like burritos and guacamole. Members also enjoy special promotions, birthday rewards, and early access to new menu items. Furthermore, the program offers personalized challenges and bonus offers that allow members to earn extra points and collect exclusive badges.

People love Chipotle Rewards for its simplicity and generous rewards. The app provides an easy way to track points and order ahead, enhancing the overall customer experience. What’s more, members have the option to donate their points towards causes they care about or redeem them for exclusive merchandise, adding an extra layer of value and engagement to the program. 

Subway 

Subway, established in 1965, is a solid global fast-food chain known for its big, customizable, and affordable submarine sandwiches, deliciously baked bread, and a variety of toppings. What sets this fast food restaurant apart is its “build-your-own” approach. Subway provides a better alternative to traditional fast food by allowing customers to create their perfect sub. It is the sandwich shop you can always count on for a great meal. 

But delicious sandwiches aren’t the only thing they’re famous for; they also have a great loyalty program called Subway MVP Rewards. The new program has replaced the old MyWay loyalty program, bringing enhanced value and exciting benefits for Subway eaters. It's a fresh upgrade that takes restaurant rewards to the next level! 

One of the standout benefits is the 250 points customers receive just for signing up, which can be redeemed for Subway cash to use towards purchases. Customers earn 10 points for every dollar spent, plus extra points for orders made through the App or online. The program offers a tiered system with 3 ranks: PRO, CAPTAIN and ALL-STAR. This means the more you spend, the more you earn, and the better the rewards get. For example, upon reaching the ALL-STAR rank, you receive Extra Bonus Earn Days, Access to Subway Swag, and Free Chips Friday. 

Many people find the program appealing because it’s easy to use, and the rewards come quickly, especially with the sign-up bonus. Plus, the variety of rewards, from free cookies to real meals, makes it a flexible and attractive option for fans of Subway. Overall, Subway MVP rewards are a good choice for regular customers who want to save money and enjoy exclusive perks. 

Wendy’s

Founded in 1969 by Dave Thomas, Wendy’s is a top-tier fast food chain in the US, renowned for its high-quality, made-to-order burgers that consistently delight customers. Known also for its crispy chicken nuggets with the perfect sweet and sour sauce and the iconic Frosty dessert, Wendy’s offers a dining experience that blends quality and taste, attracting loyal fans nationwide.  

Aside from their food, Wendy’s offers a great points-based loyalty program called Wendy’s Rewards. Customers earn 10 points for every $1 spent and occasionally receive bonus points. Once Wendy's customers accumulate enough points, they can redeem them for their favorite menu items in the Rewards Store. For example, customers can exchange 200 points for a small Frosty. The choices are regularly updated to keep things fresh and exciting. 

People love Wendy's restaurant rewards because they get more of what they crave - delicious food at a great value. The program is straightforward: customers earn points with every purchase, making it easy to indulge in favorites like their juicy burgers, crispy chicken nuggets, and creamy Frostys. Plus, special offers and exclusive deals keep the surprises coming. It's a deliciously rewarding experience that turns every meal into a tasty win!

Starbucks

Starbucks, a renowned restaurant that first opened its doors in 1971, is celebrated for its high-quality coffee and inviting atmosphere. Whether you’re grabbing a quick espresso or enjoying a leisurely meal, Starbucks offers a wide range of delicious snacks and beverages. It’s the perfect spot for a caffeine fix and a taste of their favorite pastries!

Starbucks doesn’t just excel at coffee; they also offer a fantastic loyalty program, Starbucks Rewards. This program provides customers with a range of benefits to enhance their coffee experience. Members earn Stars with every purchase, redeemable for free drinks, food items, and Starbucks merchandise. For instance, 200 Stars can be exchanged for a handcrafted drink or a hot breakfast. The program also includes personalized offers, such as discounts on favorite items and bonus Stars for trying new products.

One unique feature of Starbucks Rewards is the ability to skip the line and pick up orders by using the app to order and pay. Customers love this program because it rewards their loyalty and provides exclusive access to new products and promotions. 

Now, with a new partnership, members can earn Double Stars on Delta travel days and miles when they reload $25 or more to their Starbucks Rewards account. This partnership between Starbucks and Delta SkyMiles highlights the program's effectiveness in offering even more rewards and benefits to its members. Starbucks Rewards is a favorite among coffee lovers for its unique combination of convenience, customization, and rewarding experiences. In addition to that, Starbucks offers member-only games as part of its restaurant rewards program, giving customers exclusive chances to win prizes and extra points. 

Conclusion

Restaurant loyalty programs are an effective marketing strategy that can significantly boost brand loyalty and customer retention. By offering various program ideas, such as points-based and tiered systems, restaurants can create personalized experiences that keep customers coming back. Tiered systems, in particular, are among the most popular, allowing restaurants to reward customers based on their level of engagement. Implementing a well-designed loyalty program not only helps in retaining customers but also in attracting new ones. When done right, these programs can lead to increased customer satisfaction and long-term loyalty. Remember, the key to a successful loyalty program lies in understanding your customers and continuously adapting the program to meet their evolving needs.‍‍