Compared to this past year, April 2023 traffic for quick-service restaurants (QSRs) decreased while pricing increased. Not the ideal direction for either metric, whether you’re an restaurant owner or consumer.
In the future, Revenue Management Solutions (RMS) expects restaurant prices will stabilize, especially after recent price increases. Good news to be sure but we also believe that restaurant traffic will continue to be a challenge. To increase restaurant sales, it’s worth making the most of the customer data and insights that reside in your restaurant rewards programs and apps.
In this post, we’ll discuss why restaurant loyalty programs are crucial, especially as customers reduce their restaurant spending.
Why Restaurant Loyalty Programs Matter Today
Continued Popularity Growth and High Adoption Rates
During the pandemic, approximately 25% of restaurant customers reported signing up for at least one restaurant loyalty program. In 2023, that interest has grown. RMS consumer research shows that 1 in 4 guests now belong to even more food loyalty programs than last year.
Guests Enjoy Dining Rewards
Our consumer survey on restaurant mobile apps, loyalty programs and dining choices found that half of the respondents use restaurant apps. Even more encouraging, the top reason for joining a restaurant loyalty scheme among all respondents was for food rewards programs and promotions.
Preferences Differ Across Generations and Households
While top motivators for signing up for a loyalty program were restaurant points and exclusive offers, differences do exist among generations. Not surprisingly, Gen Z gravitates towards loyalty programs for the convenience of the restaurant technology. Family households tend to use customer loyalty programs for contactless payment and easy access to past orders.
App-Exclusive Offers Retain and Re-Engage Customers
The ability to create app-exclusive special offers not only encourages customers to stay on your platform but also fosters repeat business. Leveraging your guest data allows you to provide personalized coupons, rewards and offers to loyal customers. This way you are able to satisfy their motivations and preferences while welcoming them back to your restaurants.
Loyalty Data Provides Customer Insights
By analyzing your loyalty customers you can understand why some customer segments keep coming back while others don’t. You can also gain actionable insights into food categories and dayparts are popular. With this data, you can then respond with appropriate offers.
For example, RMS found that 37% of family households are members of more loyalty programs now compared to last year. With that knowledge, you can create specific offers in restaurant app that appeal to this particular group. Think meal bundles for leftovers, happy-hour specials for after work, or value meals with customizable sides or drinks.
Value-Based Offers Can Help Win New Customers
Younger generations prioritize value. Gen Z and millennials believes that deals and coupons offer good value for their money. These guests are already online and actively looking for deals, most likely in a restaurant’s app. This makes them more likely to dine out and try new menu items.
That said, 2 in 3 guests would switch from their usual restaurant if a competitor offered a coupon. But keep in mind, this works both ways. Make sure your loyalty program offers are attractive enough to keep customers loyal to your brand and keeps them away from competing fast-food chains.
Boost Profit Margin By Up To 4%
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Harness the Power of Restaurant Loyalty Programs
A restaurant customer loyalty program can be a profitable way to expand your brand’s reach, even in times of customer price sensitivity. Start by optimizing your loyalty program using the loyalty data you already have. Use those insights to offer (and test) rewards and other incentives that attract and retain customers.
RMS can help you find profit-boosting value in your restaurant data to make the most of your existing loyalty program or the one you want to create. Reach out to us today for practical strategies to optimize profitability, sales and financial health. We’re here to support you every step of the way.
