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Why your loyalty program is failing and how to fix it (Part 1)

Lackluster schemes and blind guessing at what customers want are killing loyalty program effectiveness for fast casual restaurant operators. So what’s the secret to conquering diner devotion?

Over the course of the next three blogs, I’d like to lay bare the loyalty landscape and bring you some key lessons from brand loyalty leaders that’ll help you take your program out of the Dark Ages and ensure you’ll never lose a customer to a competitor again.

The slow dawn of digital in hospitality
Digital innovation is definitely a dish best served piping hot but, by for many operators, the technology has been sitting on the pass for a little too long and is now lukewarm at best. This is even more obvious when you compare the digital deployments of the hospitality sector to others such as travel, banking and retail. As these industries continue to embrace advances in consumer-facing automation and self-service solutions, the hospitality sector struggles to keep pace.

Loyalty is an area of untapped potential where technology can play a lucrative role in your business. 46% of U.S. consumers said they’re more likely to switch brands than they were 10 years ago, which means loyalty is something you can’t afford to get wrong.

But it can be a daunting issue and raises questions like; ‘What technology should I use?’ ‘Will I see a return on investment?’ ‘What happens if customers don’t use it?’ and ‘What kind of program should I be investing in?’ But when 66% of diners prefer restaurants that have a loyalty program and when repeat customers spend 67% more than new ones, it’s a challenge that’s worth taking on.

Restaurants lagging in loyalty
In comparison to other industries, hospitality is limping behind in the loyalty stakes. So how exactly have operators gotten themselves into this state of digital despondency? One issue lies with the point of sale (POS). POS has traditionally been a workforce solution excelling at making servers lives’ easier by dealing with the management of tables and checks with cold efficiency.  But when it comes to gathering customer data, analyzing preferences and powering more than just dumb, “stamp-card” loyalty, POS has fallen woefully short.

Some technology providers and operators have tried in vain to address this POS pitfall with make-do solutions such as blanket digital offers or shared tablet ordering with online stamp cards until a better answer to loyalty comes along. But the truth is – logistics have been a killer for the sector.

Until now.

Dialing in to loyalty success with mobile
Cue the meteoric rise of the smartphone, now with a staggering 1.75 billion users worldwide and growing. Thanks to these addictive devices and their lifestyle-permeating applications, there is now a clear opportunity for hospitality to get smart about its loyalty programs.

The ‘there’s an app for that’ phenomenon has heralded the arrival of self-service “order-and-pay” applications for customers’ mobile phones. This key development means operators can capture valuable customer data such as buying behavior (times, location and frequency of purchases), favorite meals, preferred payment methods, whether they tend to collect, order for delivery or eat in store.  And that’s just the starter.

Hospitality has no excuse for its technological shortcomings in this area, as most of the technology required actually lies with the consumer’s mobile device. So now the opportunity is here, how can restaurants turn up the heat on their loyalty programs and capitalize on new and existing technologies to attract guests and boost their lifetime value?

In our next two blogs we’ll present 10 lessons for achieving just that.

Author:  Gillian Jones heads up business development for QikServe, the mobile ordering and payment specialist. QikServe’s app allows customers to order and pay straight from their mobile phone.

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