Restaurant Marketing 101 – Loyalty Marketing

Loyalty Marketing For Your Food Business

As promised the first and one of the most important items in my Local Store Marketing guide is customer loyalty programs.

Loyalty programs are any means a business uses to grow sales and customer base through repeat business from existing customers. This can also be used to gain new customers but once they step into your establishment hopefully they become repeat or existing customers.

Start by offering the customer an incentive to use your services rather than your competitor. This incentive must be strong enough to outweigh the convenience of a nearer competitor or even a competitor with a superior or better priced product.

This normally takes the shape of a deal that allows a customer to gain a reduced price, an addition product, or other long term incentive. The trick to any loyalty program is to make that incentive available after several visits to your establishment.

The most successful loyalty program for the restaurant and QSR business in my opinion is the “Buy 10 get one free” or “Buy 5 get one free”, it doesn’t matter what the amount is but it does matter that your profit margins on the program should still be healthy and that any loss for the give-away is more than matched by the increase in sales on a daily basis. This is particularly suitable for coffee shops, bakeries, fast food or any business where the price of the main item is between $1 and $10.

Take a coffee shop for example. Average price for a coffee is about $4 depending upon where you are. Most working people in reasonable sized cities have a coffee at least once a week, some have several a day. The customer walks or drives by many coffee shops on their way to work every morning and many large office buildings have their own coffee shops. So how to you compete with all this choice?

A Loyalty Card.

The best way to handle the mechanics of this program is to get cards printed with your logo and a place for the customer’s name and email address as well as room around the outside to punch 10 holes. You should have a unique hole punch made that is only found at your business. I have had a custom hole punch made for less than $40. Make the design of the hole something to do with your logo or something unusual. Many coffee shops are using a hole punch in the shape of a coffee cup so try to stay away from that design. Be sure to have the place for the customer’s contact details.

The collected information can be used in many ways, emails with new offers or products, contacting them if you haven’t seen them for a while, (you or a team member may have upset them) additional loyalty programs for your best customers; for example a draw of used cards for “Free Coffee For a Week”.

When the customer places an order the server asks if they have a loyalty card. If they don’t they ask if they would like one and explain the offer. The customer orders a coffee and the server punches a hole in the card.

When the customer has all 10 holes punched the server can tell them that their next one is free when they bring back the fully punched card. How you handle it is up to you – it may be that you wish to give them their 10th coffee free. Fully punched cards are then collected and a new one given to the customer.

Note: The cards should be small enough to be carried in a wallet or purse ( business card sized) and if a customer has more than one card with, lets say, 4 holes on one card and 6 on the other, then you must honor the 10 holes. Also if you see a customer with two or three cards, offer to consolidate the number of punches onto a new card and discard the old ones.

The coffee shop idea can be adapted to many different types of businesses and is not exclusively for low ticket average products. I know of higher end restaurants that use it too. Office workers will offer to get coffee for their co workers so they get a free one for their trouble. And I know of more than one boss that buys his/her entire team coffee on a Friday and enjoys his free one with his spouse on the weekend.

Be creative in your local store marketing, look at what your competitors are doing and how they are making their customers more loyal to their business. Adapt ideas that you see, not only from the food industry but from any type of business and get started.

With Back -to-School around the corner, next week I’ll talk about some ways to get your product out in front of the students and kids…