This blog is based on the Packaged Facts report Future of Foodservice: Food and Beverage Menu Trends & Opportunities. Purchase the report by December 1 and receive 5% off with promo code PF081715.
Retailer emphasis on loyalty programs is influenced by the growing realization that coupons and discount deals often cause only a short-term traffic spike but generally fail to build long-term guest loyalty. This is part of the reason why, compared to other food and non-food retailers (especially the grocery channel), usage of restaurant/coffee shop rewards programs is not as widespread. Indeed, only 8% have used such a program at a restaurant or coffeehouse in the past four weeks.
However, the incidence of loyalty point redemption is highest among the most frequent restaurant users, suggesting success in using these programs to incent usage among more frequent patrons. With that knowledge, it becomes essential for restaurant players to better understand exactly what rewards their most loyal customers are most interested in earning.
Consumers prefer a rewards program with a clearly defined proposition in which they earn points or rewards, rather than a program built solely on periodic, surprise free items. Furthermore, it’s important to keep things simple and not make diners have to “work” to earn or keep track of that reward. To that end, technology trends are enabling loyalty programs to be more accessible to users. But while smartphone apps are rapidly becoming the standard among loyalty programs, data suggests this may not be the most effective way to build loyalty.
-- David Morris