Over two years of Covid-19, followed by inflation has sent the market into a tailspin. According to the August 2022 Consumer Price Index (CPI), the grocery store price index increased by 13.5% from August 2021. With retail food prices soaring, restaurants have started to roll out innovative solutions to bring in business, while offering patrons an affordable dining experience. This has chiefly ben achieved through loyalty programs or rewards programs -- an easy work-around to high food bills. It's no surprise that restaurant purchases have escalated by 8% since 2021.
In a recent Pymnts-Deloitte survey, 43% of customers said they are more likely to visit a restaurant that runs a customer loyalty program than one that doesn't. This means, if a restaurant does not offer a rewards program, it misses out on valuable customers and potential business. 57% of restaurants in the United States already offer rewards programs, and one in four plans to begin a rewards program soon.
Loyalty programs are an important value-addition to a restaurant business. So important, in fact, that any unexpected change to the program can upset customers. We're not exaggerating! In October 2022, when Dunkin Donuts revised its eight-year-old DD Perks rewards program, it left 18,000 sub-Reddit Dunkin customers chagrined.
A New York-based Twitter user,
Magdalene J. Taylor, wrote on Twitter, "there is drama in the Dunkin world right now daily Dunkin drinkers are boycotting because they revamped their app rewards program and devalued points. the Dunkin subreddit is fuming! I fear the brand is no longer the people's coffee."
Dunkin' President Scott Murphy issued a statement to The Washington Post defending the changes in the rewards program, saying that the alterations allowed customers to accrue more points and redeem a wider range of food and drink and to accrue points for a full meal.
Leaving that controversy aside, the fact remains that a good restaurant reward program can help boost both top-line and bottom-line growth. Let's see how-
- Increases repeat business- Loyalty programs encourage customers to return more often, increasing sales and profits.
- Builds brand awareness and loyalty- A restaurant business can create a sense of brand loyalty among customers by offering exclusive deals and rewards. It helps keep them coming back and spreading the word about the business to their friends and family members.
- Drives impulse purchases- Offering rewards for spending a certain amount of money or ordering a certain number of items can encourage customers to make impulse purchases they may not have otherwise made. It means more revenue for your business.
- Boosts customer lifetime value- A loyal customer is worth much more than a one-time customer. By investing in a customer loyalty program, you're investing in your business's future by ensuring a steady stream of returning customers who are likely to spend more money over time.
- Attracts new customers- Loyalty programs can also be used as marketing hooks to attract new customers. For example, offering a discount on their first purchase will entice new diners to try out your restaurant, while also enrolling them in your loyalty program so that you can continue marketing directly to them.