Thursday, September 16, 2010

Loyalty Programs Help Restaurants in Tough Times

An online survey was conducted in 2010 among members of the National Restaurant Association. There were approximately 1300 responses. The survey had several objectives; namely:
1. investigate the level of penetration of loyalty programs in the industry,
2. identify the types of loyalty programs,
3. collect the metrics being used to measure performance, and
4. determine the level of resources dedicated to support the effort.

There were a number of findings that appear to be significant. They are
1. 77% of the respondents said that loyalty programs helped drive business during the economic turn down,
2. 90% said that the loyalty programs gave them a competitive advantage
3. for those already using loyalty programs, 84% plan to maintain or increase their program investment
4. 74% of the respondents used social media to support their loyalty programs. Facebook was the most common site and was used by 65%, followed by Twitter at 40% and blogging at 17%.

The bottom line is that loyalty programs are clearly a competitive weapon. That weapon has been shown to be particularly effective during the economic downturn in the last two years as can so easily be noticed by the willingness to continue the programs. It is not difficult to image that its effectiveness will continue even as the economy improves. Loyalty programs can provide the added incentive to increase visits from individual customers.

Wednesday, September 1, 2010

What Price Loyalty

I saw a quote on the net the other day. It asked the question "Why do customers need to take the initiative to ultimately be rewarded for loyalty?" GREAT question! As we review the many loyalty programs that are offered by B2C and B2B companies the onus is almost always on the customer to initiate the program and often it is the customer's responsibility to manage it as well. Businesses have the resources and the tools necessary to do the work for the customer. It seems that treating the loyal customers with a little extra effort by taking care of the loyalty program for them is a natural step for showing them the benefits of being a loyal customer.

This is an open question to those companies who have a loyalty program. Are your customers responsible for initiating your loyalty program? if the answer is yes, why? One of the major objectives of just about all loyalty programs is to entice the customer to continue to return (as often as possible). Are there any hurdles that the customer must overcome to continue to capture rewards? Must the customer always have his loyalty card to get reward "points"? Are there other policy obstacles that might disallow the addition of loyalty points?

One of the prime rules of business that has become part of the gospel of customer loyalty is that the business must do everything it can to make it as easy as possible for the customer to do business. The obvious extension to this fundamental rule of business should be, in my opinion, to make it as easy as possible for the customer to accumulate loyalty points (or whatever is used) as easily as possible. To burden the loyal customer seems to be against the basic tenet of making it easy to do business with the company.

One of the latest marketing concepts is to segment the customers as finely as possible so that advertising programs and rewards can be finely tuned to the customer level. As long as the marketing program is tracking customers to determine their buying habits, would it not be reasonable to use that data to build the loyalty profile of the customers so that any loyalty program developed can be automatically applied to the appropriate customers?

I believe that the next step in loyalty programs is to take them off the backs of the customers and put them into the company where they belong. The idea is to make loyalty a benefit not an aggravation.

web visitor stats
OptiPlex 755 Desktops