How to Create a Restaurant Loyalty Program that Actually Brings Back Customers

How to Create a Restaurant Loyalty Program that Actually Brings Back Customers

You must understand that the customer of your restaurant is the king. And unless you are able to make them happy and retain them all the efforts that you have put in, in attracting them, will go into waste. Here comes the importance of loyalty programs. Although the restaurant loyalty program is not a new concept in the hospitality business, many restaurants are found to neglect or are unable to understand its importance.

The biggest reason why many restaurants fail to utilize Loyalty Programs to their complete fullest is that even if customers’ subscribe to the Loyalty Program and earn the points, they hardly ever redeem them.

The true success of a restaurant Loyalty Program is measured not by the Earn Rate, but by the Burn Rate of the Loyalty Points.

Only when the customers come back to your restaurant to redeem their points, does it signify that your Loyalty Rewards Offer is successful.

Many a time, customers are not even aware of how the system works and the value of the points they have collected so far. This lack of awareness leads to the failure of most Loyalty Program campaigns in restaurants. Thus, it is important to educate your customers at the time of enrolment of Restaurant Loyalty Program campaigns and also keep reminding your customers to redeem their points through lucrative offers. Sending catchy SMS and emails to your customers to remind them to redeem their points is a good way to stay relevant in the minds of your customers. Here’s how you can use loyalty program for customer retention!

Types Of Restaurant Loyalty Programs To Run At Your Restaurant

Typically, there are two types of Loyalty Program that you can run at your restaurant.

Amount Based – You can create restaurant Loyalty Programs that accumulate points in the customer’s account based on the amount they spend at your restaurant. They can collect a point on a certain amount spent. For instance, 1 point can be collected on every Rs 100 spent. Amount based restaurant Loyalty Programs work best in the case of fine-dine restaurants and bars where the average spend of customers is high.

Visit Based – Visit based restaurant Loyalty Programs work best in the case of quick-service restaurants and cafes where the frequency of people visiting your outlet is higher, but the average spend is less. You can offer a free drink or a complimentary item on every 8th customer visit. This propels your customers to come back to get that free item.

Enhance Your Restaurant Loyalty Program To Bolster your Profits by Retaining Customers

Hone your restaurant loyalty program that will help you to retain customers and in turn drive in that extra sales. Confused about how you can go about creating that stellar loyalty program that will help you to stay ahead in the competition? Don’t worry! Here are a few points that will help you instill a restaurant loyalty program that will help you to effectively drive sales and convert your customers into loyal ones. 

1. Make The Process Simple

While you should make your program comprehensive, do not do the mistake of making it too long with too many steps and in turn, end up tiring your customers. Doing so will not leave a very positive impact on your customers and they may end up not enrolling in the program altogether. To avoid making any such mistakes, make sure that the process is extremely user-friendly and very simple so that your patrons can participate without thinking twice. A simple loyalty program makes the redemption part easier hence, increasing restaurant customer retention. 

2. Give Incentives To Customers

Your customers will only be happy to get involved in your restaurant loyalty program when they know that you have something in for them. Grant them something extra, maybe a 10% discount on every visit, or a 50% discount on their 5th visit, or a complementary dish every time they visit.

However, a more customized approach is always recommended, so you must evaluate, what is it that your customers really value? Is it just discounts? Or a complimentary tasting session? And then create a value-focused rewards program that best suits your audience.      

3.  Stay In Touch

Simply enrolling your customers and never getting back at them will do you no good. It will be a waste of time and effort on your and their part as well. On the contrary, you must try to maintain a very healthy and consistent touch with them. Being in touch helps you to inform your loyal customers about the new updates in your menu and other such offers and happy hours that will enable you to stay in sight and in mind of your customers.

Since everyone is venturing into loyalty programs and are sending regular emails informing the customers are the new insertions and the current happenings at the restaurant, you got to do something extra that will help you to have an edge over the others in the market. Hence, instead of merely sending out emails pertaining to the discounts and offers, why don’t you share the secret sauce of some of your menu items? For example, you can share the recipe of some of your dips or some mocktails that will help your customers to garner some cookery knowledge which they can successfully try at their home kitchen.

4. Seek Feedback

Soliciting genuine feedback from your customers and working on them is by far the most important aspect of running a successful restaurant. This is where you can use your loyalty program to the fullest. An effective restaurant loyalty program should help you understand more about your customers and their preferences. You should occasionally give them an option of filling out surveys and giving feedback in return for loyalty points.

This helps build a great pool of insights that not only helps you learn about your customer experience but also about what they seek from a loyalty program like yours. And when they realize that you do give importance to their opinion, then it will be easier for you to retain them.

5. Customize Your Restaurant Loyalty Program

You should understand that no two customers in the world are the same. Liking a food, ambiance, or feeling contented with the loyalty program is a very relative concept with which everyone might not be on the same boat.

In order to deal with each individual, you got to feel each one feel special, on the basis of what they like or dislike. Offering your loyal customers a special discount or an offer on their birthdays and anniversaries is w great way to keep them hitched. Taking into consideration the ordering history of your customers, you will get an idea of what they prefer the most, and accordingly, you can surprise them on their next visit with it.

These customized efforts will help you to add a personal touch to your restaurant loyalty programs and will be more appreciated by your customers. They will not only recommend your place to everyone, but they will also make sure they visit you as often as possible.

New call-to-action

Take Notes From One Of The Most Successful Restaurant Loyalty Programs

Coffee behemoth Starbucks has been on a rollercoaster in the last decade, becoming the most successful coffee franchise in the world. Keeping aside the other factors aside, let us focus on the loyalty program that Starbucks brought into force that has managed to re-emphasized on the importance of having a comprehensive loyalty program in place.

It has evolved a very comprehensive loyal program for its customers over the years. One of the most attractive components of their loyalty program is the digital order feature known as Mobile Order & Pay. It has been observed that loyalty programs have been most successful when they are integrated with digital payment and ordering methods. This program also tracks customer buying behavior and recommendations into usable data, allowing the customers to modify the products as per their preference. Such customizations f the loyalty programs go a long way in delivering stellar customer service.

It was widely reported in 2016, that the loyalty program of Starbucks has accumulated more money than some of the other banks. It has approximately $1.2 billion in customer funds on the company’s cards as of the first quarter of the month. According to company filings, that number is now over $2 billion and has more than doubled in just two years.

As per the statistics put forward by the Aron Allen & Associates, Starbucks’ loyalty programs did wonders:

  • 13 million+ members (roughly 18 times the population of Seattle)
  • Membership has grown 11% in the past year
  • Transactions made using the loyalty program represented 36% of U.S. company-operated sales in the second quarter of 2017, according to company filings
  • Starbucks loyalty members’ average ticket size is three times that of the average customer

Loyalty Programs are a great way to give your customers a reason to keep coming back. Try out these tips for building a great restaurant Loyalty Program and see how your customer retention rate increases!

New call-to-action

Rating: 4.7/5. From 6 votes.
Please wait...
Nikunj is the Communications Lead at Restroworks, a global leader in cloud-based technology platforms. In his role, he oversees global marketing and branding initiatives for Restroworks across APAC, the Middle East, and the US.


  1. This is a great article with great insights. The points under various types of restaurant loyalty programs used is well explained, can you provide me with a list of loyalty program apps that are used in restaurants


Please enter your comment!
Please enter your name here