Why Your Restaurant Needs A Loyalty Program Now

The customers are pouring in, and you might think: I really don't need a loyalty program. But a new Oracle study insists that loyalty programs offer a big opportunity for restaurant operators.

"Winning repeat business remains an important goal for any restaurant loyalty program, but the true value lies in using it to gain an understanding of a restaurant operatorÕs customers and then leveraging that insight to create revenue opportunities and deliver the frictionless, personalized service that guests increasingly want," Christopher Adams, vice president, food and beverage, APAC at Oracle Hospitality, said.

"Without a loyalty program capable of delivering insights, operators risk falling behind the curve."

Operators may be hesitant to put in the effort fearing failure, but many consumers show a willingness to join food service loyalty programs, when available.

In Australia, 52% of consumers in the Oracle study admitted they were members of at least one restaurant/other food and beverage loyalty program. While the statistic is below the American rate of 65%, it is above the participation rate in Japan, where only about one-third of the population will subscribe to a food service loyalty program. Also, there is minimal hostility for loyalty programs in Australia -- only 7% of consumers in the country said they will never join one.

QSR brands that are mulling a loyalty program may also fear being late to the loyalty program race. But 15% of respondents in Australia admitted they were members of multiple loyalty programs, revealing that launching a new loyalty program can still captivate a lot of consumers.

But not just any loyalty program will do, warned Adams. The best loyalty programs must deliver value to the guest, preferably giving a discount on every purchase and granting free products after a certain number of purchases.

When asked about the rewards that were the most attractive to them, 72% of Australian consumers responded chose a discount on every purchase. The next most attractive loyalty reward is receiving free products (68%) such as getting that 10th coffee at a favorite cafe for free. Another reward that ranks relatively high among Australians is preferential treatment (44%) such as birthday celebrations and other similar offers.

By contrast, loyalty rewards like priority access to new products (18%), charity partnerships or initiatives (16%), mobile payment through the loyalty app (15%), and third party offers such as discounts at partner stores or businesses (10%) were less attractive to Australians.

"When it comes to offering the right rewards, it is imperative to focus on the three 'Rs': relevant, redeemable, and reliable," Adams said.

"In other words, programs must deliver benefits that consumers actually want, and they need to be claimable with ease, following clear, simple and consistent practices."

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