Local Store Marketing for Your Franchise Restaurant – The Loyalty Program

Loyalty programLSM Tip #3

The Loyalty Program

The most effective way to drive sales from existing customers and to gain new customers is with some sort of loyalty program.

Which type of loyalty program is dependant on the concept that you have. A pizza restaurant or fast casual restaurant would have to be significantly more careful about the type and cost of a loyalty program than say a coffee shop.

Most of the larger grocery chains have some form of loyalty program as do most coffee shops and many small businesses, food related or not. Your airline frequent flyer program is an example of a loyalty program. All of these companies and many more have seen the benefit of a program that ties your customer to your business and makes them think twice before going to a competitor, even if they are closer and of the same quality.

Loyalty programs are a cost to your business but it is a cost that you must be willing to pay without hesitation. Look at a loyalty program as a marketing tool that will offer instant results and something that will drive your business. The quickest way to ruin your loyalty program and drive away your customers is not promoting  it to the utmost of your ability.

The easiest way to implement  a loyalty program is with a loyalty card.

There are a few ways to do the loyalty card; the cheap way and the expensive way. The cheap way is to get a large amount of loyalty cards made with your logo, the terms and conditions of the loyalty cards, a place for your customers name and address and space to punch ten( or however many) times. You then have a punch made that is specific to your concept/store i.e) coffee cup, burger, logo, etc.

The expensive way is to get your loyalty cards made with computer chips embedded in them so that your POS system can read and manage. This method gives you a lot of information that can be used to market your products and your store but the price per card can be prohibitive and will probably only be used by large concepts or supermarkets where the average check is high enough to warrant the cost.

Time and time again I have seen franchisees complain about the cost of a loyalty program and the hassles that go with it. This attitude always permeates to the team and pretty soon this attitude will get to your customers. A couple of tips to ensure the smooth running and success of your loyalty program.

  1. If you are using a card that you punch, ensure the punch is hard to duplicate and has something to do with your business. Look in the yellow pages for punch manufacturers.
  2. Train your team to ask every customer if they have a loyalty card and if not explain the benefits to them and hand them one.
  3. If people have multiple cards offer to consolidate them onto one card even if it means giving a free drink.
  4. Take the loyalty cards of your competitors and exchange them for your own. Give them a free punch or two on your card. You have just stolen a competitors customer. How good is that!!
  5. Pick your slowest day and make a double punch day. Give two punches for every product sold. This should help increase your sales on your slowest day or have a double punch happy hour to do the same for those quiet afternoons.
  6. Never argue about a card that looks as if it has been tampered with. Just take it and move on. You cannot afford to make a loyal customer think you do not trust them.
  7. Once the card is redeemed for their free or discounted product keep the card and automatically give them a new one.
  8. If you have their name and address on the card you can start a data base of your customers. Use this for mail outs and promotions. To help to get your customers to put their contact details on the card set up a monthly competition where old cards will be drawn for a free meal or other product prizes.
  9. Keep it going. This is a promotion that should never stop. Keep building your customer base with new and more loyal existing customers.

I am sure that you can come up with a myriad of ways to adapt this simple idea to your store or concept. Let us know how it works for you.

To Higher Profits


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