Restaurant Marketing: Retain Valuable Customers with a Loyalty Program

By Tricia Hoy

Have you considered implementing a loyalty program in your restaurant?

Studies show that it costs substantially more to acquire a new customer than to keep existing customers coming back. And implementing the right loyalty program can help. According to Hubspot, “a 5% increase in customer retention can lead to a 25-100% increase in profit for your company.” And beyond sales, loyalty programs help pizza operators increase brand loyalty, and maximize the lifetime value of their customers.

Knowing what results you would like to achieve, and having a clearly defined objective will help you measure the effectiveness of your loyalty program. Using your point of sale system, you can track customer retention, purchase frequency, sales increases, and discounts.

What type of loyalty program works best? Here are four types to consider for the best fit for your restaurant:

Cash Back Program – This type of loyalty program allows customers to earn cash back on purchases within a certain time frame, or based on total amount spent. While it’s easy to understand, and customers often see the value in dollars accruing, this type of program may not appeal to customers who don’t dine with you often. As well, it’s important to understand the cost of the rewards and ensure that the program is driving sufficient added sales to increase profitability.

Discount Program – Apply a percentage off either the total value of the sale, or specific menu items for your loyalty customers. For customers who appreciate instant gratification, this may be attractive, but on the flip side, this type of program may attract infrequent shoppers and give away profit margin. One way to avoid this may be to apply discounts only to specific menu items such as sides, which increases order add-ons.

Frequent Purchase Program – Often implemented with punch or stamp cards, this program makes Buy-10-Get-One-Free easy. Relatively low cost and easy to understand, these programs can also be subject to fraud.

Points Program – Instead of dollars earned, customers can collect points based on purchases made. This program does not always appeal to customers who like instant gratification, but it allows frequent guests to track their progress toward rewards.

SpeedLine customer, Mozzarella Di Bufala, uses a popular variation on the punch card that not only rewards customers for purchases made, but also creates brand awareness. In a case study, Manager Ilana Teles describes the program, where customers who spend $18 or more get a magnet in the shape of a pizza slice. When all 10 magnets are collected, it forms a pizza pie, and can be applied as a $15 discount on the next order. “This is the best promotion that we've had for years," says Ilana. “In fact, we keep ordering magnets. On a weeknight, we have an average of four or five magnet sets returned. And on the weekend, we can get eight, sometimes 10 sets back per night.”

Other SpeedLine users employ the built-in SpeedLine Loyalty solution, or POS-integrated rewards solutions from Vantiv (Mercury StoreCard) and Paytronix to increase order size and frequency, and improve customer loyalty with convenient digital payment options.

Is a loyalty program right for you?  Find out how a SpeedLine POS system and Mercury StoreCard can build order frequency, ticket size and increase profit with loyalty rewards.


Posted on Mon, Apr 18, 2016 @ 09:04 AM.
Updated on April 24, 2019 @ 7:28 PM PST.

Posted by Tricia Hoy

linkedin | Author's website

Tags: customer loyalty, Restaurant Marketing

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There’s a reason pizza and delivery chains are driving the biggest changes in restaurant technology. Pizza and delivery concept restaurants are different from other restaurants, and they have complex needs at the point of sale. In this guide, gain the knowledge you need to choose the right technology fit for your restaurant.


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