What you need to know before overhauling your customer loyalty scheme

While all customers are valuable to the hospitality industry, it is loyal regulars and repeat custom that are the lifeblood of the sector. Yet, many businesses continue to fall short when it comes to identifying and incentivising a more steadfast clientele.

Although a recent survey from YouGov has uncovered that 47% of consumers are more likely to revisit and spend more with a business whose scheme they are a member of, the implementation of such incentives remains an issue in the industry. Still, businesses rely on old-fashioned and ineffective schemes as a means to attract repeat custom, such as paper loyalty cards, and depending on staff to recognise familiar faces.

With the national lockdown causing the industry losses of almost £30 billion, it is more important than ever that restaurants, bars and coffee shops redouble on their efforts when it comes to customer loyalty.

So, with this in mind, how can businesses innovate their customer loyalty schemes?

Simplicity is the secret to customer loyalty

With so many different systems on offer, the mantra for hospitality businesses should be to keep it simple. Deciding on a simpler offering makes the lives of employees easier; such schemes will be easy for staff to explain to customers, thus increasing the likelihood of people signing up. What’s more, choosing an option without complex on-boarding and rules will make it easy for diners to claim their rewards.

One offering for businesses to consider is a points-based system. Every time a customer visits, points are collected that can later be redeemed on a reward; depending on the business in question, this might be anything from a cup of coffee, to a complimentary bottle of wine.

Alternatively, businesses might look to membership schemes as an effective means of incentivising repeat custom. By signing up as a member, customers can visit their favourite venues and receive a more tailored customer experience, receiving exclusive discounts, entry to events and offers that aren’t available to non-members.

It is ultimately up to the individual business to identify which offering best suits their needs – but the key to a scheme’s success lies in creating a positive customer experience.

Tailoring the customer experience

When it comes to meeting the individual customer’s needs, rarely is there a one-size-fits-all solution; indeed, businesses will have to bear this in mind when considering which loyalty scheme is best for their specific clientele.

A survey by Criton has revealed that 62% of consumers are more likely to recommend a business that offers them a tailored service. That’s why digital programmes can be particularly valuable for businesses, as they offer unique insights and data that companies can leverage to adapt their service to offer a unique customer experience.

For example, contactless loyalty apps which link up to the venue’s customer relationship management (CRM) system can help businesses better understand the needs and behaviours of their client-base, allowing them to gather vital information that can be used to develop more sophisticated and personal communication with key consumers, rather than a generic and impersonal email campaigns that might not be of interest to some. For example, businesses can utilise this data to identify when a group of regular customers stop returning, and then offer the best incentives to coax them back.

Convenience is key

While digital solutions deliver all-important data that can help businesses tailor their offerings to consumers, the convenience of a digital scheme can also be an essential driver of customer loyalty. Indeed, we are living in a digital age, and it is becoming increasingly clear that venues can improve their footfall by making use of digital offerings, with 59% of 25 to 34 year olds stating that their consumer satisfaction would be enhanced if only more brands embraced digital loyalty schemes.

The usual story with more traditional methods of securing customer loyalty, like paper loyalty cards, is that physical cards are easily lost or damaged; similarly, signing up to a generic mailing list might leave consumers inundated with unwanted emails. As a result, it is preferable for businesses to look to leaner solutions, such as apps, that make redeeming and keeping track of rewards a simpler task.

However, a digital scheme, such as a handy app on a mobile phone might generate a push notification to remind a customer that they are entitled to a free cup of coffee or a slice of cake when they next visit, thus gently encouraging them to visit again. Solutions like this offer genuine rewards that customers can enjoy, without the trouble of searching for a paper loyalty card or sifting through their emails.

With so many different offerings available, an effective customer loyalty scheme can be an incredible asset to businesses in the hospitality industry. The key to success is choosing the most suitable system for the business in question: this way, restaurants, bars and coffee shops can tailor their service to ensure that their customers are always happy – and that they keep coming back.

Frederick Szydlowski is the co-founder and CMO of Embargo, a loyalty platform that allows restaurants, bars, and coffee shops to recognise and reward their customers through the use of pioneering technology. 

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