How Technology is Shaping the Future of Restaurant Loyalty Programs

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While customer loyalty in the restaurant industry has been around for a while with the humble stamp card, the sector has evolved substantially as technology has enabled more innovation and higher rates of engagement.

The restaurant industry has boomed over the last few years as creativity, culture and new experiences are desired by the masses. However, despite a market size that exceeds $25 billion, and 2.3% growth in 2023, the financial crisis has been hitting the industry hard as customers are increasingly being more careful about how and where they spend their money.

As inflation has pushed many to reassess their costs and ways to spend, customer loyalty is fast becoming the lifeline to see restaurant owners through yet another difficult period. Our 2022 Global Customer Loyalty report found that nearly 90% of respondents trusted customer loyalty programs to help them overcome the inflation crisis and potential recession.

While customer loyalty in the restaurant industry has been around for a while with the humble stamp card, the sector has evolved substantially as technology has enabled more innovation and higher rates of engagement. This is what we see as the upcoming trends and what to expect in customer loyalty for restaurants.

Gamification

Since smartphones have become the standard mobile device for most, more restaurants have designed and created their own app helping them to become a mobile-first business and brand. This has not only helped with a seamless ordering and collection experience and easier tracking of loyalty points and rewards, but it’s enabled an entirely new way to engage with customers thanks to virtual gaming built in-app.

Arcade-style gamification elements sees customers play to win new rewards and points in their existing loyalty program in a fun and alternate world. Rewards Arcade, the loyalty program of KFC UK & Ireland does this  by inviting customers who spend over a certain amount in-app or on their website to play mini games while they wait for their food to arrive. Their games are simple and have mystery prizes awarded to those who win, including free menu items.

Starbucks however has taken gamification into an entirely new realm by introducing NFTs in Starbucks Odyssey, an extension of its existing loyalty program. Here, members can earn NFT art by completing different activities and coffee-related challenges, which also provide bonus points and, depending on the art, unlock exclusive perks.

Greater brand experience

Strong customer loyalty programs enhance and reinforce great experiences for their customers, and offer restaurants the opportunity to play to their brand and what their unique audience enjoys.

One example is Canadian sports bar chain, La Cage, which includes a tiered membership with levels called ‘Pro’ and ‘Elite’ and much like a sports league table, the customer works their way up the ranks. A standout feature though is La Cage’s free wings deal, a long-standing promotion that sees members receive 8 free wings with every $15 purchase, whenever the Montreal Canadiens score 5 goals.

Such rewards and features increases the longevity of the loyalty program and enables a business to take full advantage of their image and brand while keeping their customers engaged and the brand front of mind, both in and outside of the buying cycle.

Better loyalty tech

To create a truly exciting and engaging loyalty program requires a restaurant business to have the right tech behind them. Not only does the implementation need to be simple but a program that doesn’t gather data intelligently and easily will only hinder the success of the program and customer loyalty rates.

More restaurants today are relying on innovative tech to help them be more efficient and competitive, while driving better ROI and revenue – loyalty is no different. No-code loyalty platforms are on the rise in many aspects of the restaurant business. They allow for faster time to implementation and deployment, more personalized functionality to suit existing process flows and flexibility for marketing campaigns, all without the need for developers.

Crucially too, loyalty programs are one of the best ways to better understand your customer, on an individual basis and as an audience as a whole. Loyalty tech platforms have incentivized the data collection process through gamified surveys and polls with rewards. With better insight management, this allows for more personalized customer experiences, recommendations and rewards.

Loyalty as an investment

As the climate continues to challenge the restaurant sector, more businesses are focusing their efforts on retention as opposed to new customer acquisition. Restaurants are wanting to prioritize their most valuable customers and are doing this through more investment in their loyalty program. Our report found that facing the inflation crisis and a possible recession, 8 out of 10 of respondents plan to increase their investment in customer retention and that eight out of ten companies plan to revamp their existing programs.

With limited spending available by the majority of today’s population, thoughtful customer loyalty programs with motivating and inventive interactive features give customers the opportunity to engage with their favorite brands for fun while elevating the relationship from purely a transactional one. According to our report, of those that did revamp their loyalty program in the last two years, over 70% were satisfied with it showing that the investment was the right decision and delivered on their goals.

Published By: Restaurant Technology News

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