Loyalty Program

From Points to Perks: Innovative Customer Loyalty Program Ideas to Boost Engagement

Diksha Adhikari
June 17, 2024
1 mins

Table of Content

69% of people love to return to a place where they get rewards. Customer loyalty programs are essential for keeping clients and making more money in a business. 

Loyalty programs stand out not only as perks but also as key strategies that help restaurants grow. They inspire people to return and convert them into loyal customers for a long time. 

We’ll explore some fruitful and dynamic customer loyalty program ideas that promise to enhance customer engagement even more. 

5 Advantages of Customer Loyalty Programs

Customer loyalty programs offer different benefits for your business to grow. We've highlighted the key ones here with real-life examples.

1. Encourage Repeat Business 

You must show appreciation for your customers; they will only enroll in loyalty programs to promote recurring purchases. Let’s say you have a coffee shop. In that case, your coffee shop can offer a free coffee for every ten coffees a customer purchases. 

This incentive makes customers want to return and sets up a regular time to go in.

2. Improves Average Order Value 

The average order value can significantly increase with brilliant cross and up-selling in loyalty schemes. Imagine a juice bar offering the next purchase in exchange for loyalty points. Tempting, right? 

People will likely buy more things to earn more discount points, resulting in higher total spending.

3. Assists to Gather Valuable Customer Data 

Loyalty programs increase sales and help you gather extensive information about your customers, such as their preferences and purchasing patterns. 

Focus on these three things to better satisfy the needs of your customer: 

1. Consider what your customers most frequently purchase

2. Focus more on your inventory

3. Promote the items strategically

You can better satisfy their needs by considering what your consumers most frequently purchase, focusing more on your inventory, and promoting those items. 

A retailer may start recommending a particular brand of boots to customers who frequently purchase sporting goods. Customers are more willing to buy these two items together if they complement one another effectively.

4. Strengthen Customer Engagement 

Notifying customers about your reward program will surely make them happy and keep them returning for a long time. 

For example, you run a cosmetics shop. You can invite your premium customers to try out new products for free or to special events. They want to know more about the brand because they feel like they're getting an incentive for being a loyal customer.

5. Differentiates the Brand 

Standing out in a crowd is not easy, but a well-planned rewards program can help you do so. Offer exclusive rewards to the buyers that attract new customers.

For example, an electronics shop can offer tech support to buyers who have previously purchased from them. This tiny deal can differentiate the electronics shop from its competitors and endear itself to new people.

5 Customer Loyalty Program Types

Referral bonuses, punch cards, tiered rewards, point systems, and multiple loyalty programs are available, but no fixed form exists. Let’s talk about them one by one.

1. Loyalty Programs Based on Reward Points

In a reward-based loyalty program, customers get points based on their spending. Every purchase helps them earn points, which they can exchange for exciting prizes. Customers keep returning because getting more points gives them something nice, like a discount on their next purchase, a free coffee, or early access to new sales.

2. Item-Based Loyalty Programs

Imagine what would happen if you suddenly get free food or goods after making a new purchase. Surprising, right? 

Think about the old-school café punch card: drink nine coffees, and the tenth is free. It's an easy yet money-saving way to make a customer regular in your shop and interested in your brand. 

3. Subscription Rewards Programs

Subscription award programs can transform occasional shoppers into devoted fans. People who pay a monthly or yearly fee get many benefits that make them feel like part of a particular club. This ongoing involvement makes them more loyal and connects them with your brand.

4. Promotional Loyalty Programs

Promotional loyalty programs are like sprinters in the world of loyalty—they get customers interested quickly by giving them prizes that expire quickly. Seriously, these programs can help rejuvenate your dead business and are suitable for boosting the launch of a new product.

Birthdays are always special and offer a personal touch to the customer. So, extra gifts on birthdays can keep your customers pleased. Moreover, this customer loyalty program idea encourages them to bring friends and family to boost overall sales.

5. Online Rewards Programs

Nowadays, the best way to hype the interest of food lovers is by providing online reward programs. You can reward customers who purchase your meal through the website or app and interact with your social media platform. 

4 Innovative Customer Loyalty Program Ideas

We have found some fantastic customer loyalty program ideas. If it's feasible for your restaurant business, you can explore and utilize any of them. 

1. Hyper-Personalization and Gamification

This method offers products tailored specifically to each customer. It has game features to make the program exciting and fun. If you pamper your consumers differently, they will love to grab your attention and play your particular games or tasks. 

Example

Race to Rewards Exchange is an unforgettable example of this type of program by Chipotle. Here, people play a virtual race where they get help if they buy something. Ultimately, they earn points through gaming and trade this for goods or foods.

2. Cross-Channel Engagement

You should utilize loyalty programs in both digital and physical channels. It can enhance the customer experience. If customers can visit your physical shop and order online with a reward, they will have more interactions.

Example

The Costa Coffee app offers buyers reward points for purchasing foods and drinks in-store and online. Customers earn points whether they pick up a pastry in-store or buy a coffee through the app. Later on, they can redeem discounts or free drinks with those points. This reward program makes the consumers unique and engaging for returning to the shop again.

3. Tiered Membership Programs

This customer loyalty program idea is super engaging for consumers and can earn you a lot of money. There are different levels based on how much the customer is spending or brand interaction. Buyers get better benefits as they move up the tiers. It encourages them to buy more and level up the tiers for more enhancement. 

Example

Customers move up to higher levels in Chick-fil-A as they spend more. This tiered method encourages consumers to come repeatedly and pay more.

4. Social Media and Community Engagement

Engaging customers in social media is a well-known and classical method of spreading loyalty programs. People get rewarded for shares, likes, or promoting the product on their social accounts. You can also run social media contests and the winners can transform into brand ambassadors.

Example

For instance, name a prize or giveaway like cash or free products for a product photo contest. When someone wins the game, the hyped people of the contest and the winner's friend will notify you about your product. This is a promotional activity and an engagement creation with your existing customers.

Case Studies of Successful Loyalty Programs

Here, we will discuss three mid-level restaurants winning big with innovative loyalty programs.

1. The Urban Grill

Urban Grill's loyalty program is tier-based, where customers earn points for spending every penny. With the exchange of points, they can acquire free or discounted items, and their tiers can be improved from Bronze to Silver to Gold. Customers always get involved in this loyalty program for advanced rewards and benefits.

2. Pasta Pantry

Pasta Pantry's reward program is unique due to its user-friendly interface and exceptional performance. They have a simple digital punch card that lets you get the next meal for free after buying ten. This program is simple to use, and sometimes you can get double points or surprise prizes like complimentary appetizers or desserts sent to your email. 

3. Starbucks

Starbucks has prizes for consumers who buy drinks, food, or other items. With every purchase, you can earn Stars and redeem rewards. For example, with 25 stars, you can customize your drink with non-dairy milk, your favorite syrup, or an extra espresso shot. You can take home a drink tumbler, signature cup, or coffee merch for up to $20 with 400 stars. 

3 Implementation Tips for Restaurants

Here are some tips for implementing the loyalty program that best suits your restaurant type and helps you retain more customers. 

1. Choosing the Right Program 

What is your restaurant type and customer base? These two things determine which loyalty program is perfect for you. The motto is to select a loyalty rewarding system that matches the dining experience and feels appealing to your clients.

Example

A point-based loyalty program is feasible for a drink or juice bar where students visit frequently but spend a moderate amount, and the students will be repeat customers. On the other hand, a tiered system may fit better in a high-end restaurant where multiple customers visit for different food sports. Higher-spending customers will win more exclusive rewards and upgrade the tier accordingly.

2. Promoting Your Loyalty Program 

After deciding on the type of loyalty program, you have to focus on the promotion strategy. Your targeted consumers must be notified and aware of what they are missing. This will motivate more people to participate in the reward gaming. 

Example

In your store, you can share vibrant posters and colorful banners outside to catch the customers' attention. If you have an app, you can decorate it with the offerings. This promotion can change the game if you have a good lead of email addresses or phone numbers to send them personalized messages. 

3. Measuring Success 

You have selected the right loyalty program and done its marketing. Now, it’s the time to track the effectiveness of your loyalty program. Monitoring specific metrics allows you to understand whether the loyalty program or the marketing strategy works as expected.

Example

Track the average order value and the number of purchases after running the loyalty program. Plus, customer feedback can be monitored to understand their reactions to your business strategy. For example, you can ask every online or offline customer who bought food from you over the past three months. Surveys can help you understand where success lies. 

Wrapping Up

Explore the above customer loyalty program ideas and apply them to your business. If one doesn’t work out, try another, but don’t stop. Adjust your program based on customer feedback and data insights to keep the program attractive and engaging. Leverage sophisticated tools like OneHubPOS to create, implement, and update loyalty programs on the go. 

Book a call with us and start using OneHubPOS at $1 today!

How do I figure out how much to charge for food?

Pricing is a balancing act! You need to cover your costs (including the food cost per portion) while offering a price point that feels valuable to your customers. Consider factors like competition, target audience, and the overall dining experience you create.

What tools are available for tracking food costs?

Food cost calculators are great for initial estimates, but consider restaurant management software for ongoing success. This software tracks inventory, automates cost calculations, and generates reports to identify cost-saving opportunities.

Can I use a food cost calculator for different types of cuisine?

Absolutely! Many online food cost calculators can handle various cuisines. Look for tools that consider ingredient types, portion sizes, and even regional pricing variations.

How often should I calculate food cost percentage?

Consider your food cost percentage your restaurant's financial fitness tracker. It's the total cost of recipe ingredients divided by your total menu sales. Ideally, calculate this regularly, like weekly or bi-weekly, to monitor profitability and adjust pricing or portions as needed.

What is the standard costing model?

The standard costing model is like a recipe for consistent pricing. It uses historical data and market trends to predict ingredient costs, allowing you to budget, purchase, and maintain profit margins even when prices fluctuate.

What is food cost per portion?

Food cost per portion is the actual cost of creating a single serving of a dish. It considers all ingredients, including spices, garnishes, and even waste!  This number helps you understand your profitability and set menu prices effectively.

AUTHOR
Diksha Adhikari
Content Marketer - OneHubPOS

Diksha, a seasoned content marketer, brings hands-on experience in website management, social media marketing, and branding. Her expertise drives efffective and results-driven digital strategies.

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