By Jim Daleen, Foodable Industry Expert
Loyalty and rewards programs are the backbone of most consumer marketing strategies in the restaurant industry. The reason these programs are so prevalent is that they work. According to a study by the Center for Retail Management at Northwestern University, about 12-15% of a company’s most loyal customers contribute 55-70% of the company’s total sales. Furthermore, 49% of consumers will choose a restaurant based on what rewards program is offered. When you understand that customers who belong to a loyalty program will visit twice as much and spend four times more than those who don’t, It becomes clear why these programs are so prevalent.
Establishing Effective Loyalty Programs is Not Easy
The challenge has always been how to make loyalty programs work as “friction free” as possible so they become engrained into the fabric of the bond between restaurant patrons and the restaurants that offer them. Both merchants and consumers will inherently shy away from programs that introduce too many steps or complexities into the program. In a typical loyalty program about 80% - 90% of the activity is related to capturing spending and issuing points. Most programs accomplish this through 2 primary methods:
Consumers self logging purchases with apps or websites
Merchants logging purchases for consumers via apps, stand alone loyalty terminals, or POS terminals
The challenges with these methods are that they take time, the processes are often confusing and they are susceptible to fraud. What’s needed is a solution that is very quick to implement, requires almost no effort by staff or consumers, and is almost impossible to scam. The answer is the integration between the payment processing system and the loyalty program! When these systems are connected it allows consumers to register their credit/debit cards in a secure manor so that all future purchases with those cards automatically log purchases and issue points without the consumer or the merchant doing anything. This link also eliminates fraud as there can be no points issued unless there is a verified financial expenditure.
Making it Valuable to the Customer
Consumers have become accustom to loyalty programs that issue points automatically, such as Capital One, that provide rewards, or cash back simply by using the card. This approach is convenient for the consumer as they simply pay with their respective credit card to receive various benefits. Based upon the positive experience that consumers have had in these programs, it’s only natural that implementing a loyalty and rewards program with similar functionality would be favorably received.
My company AppSuite is a mobile loyalty and rewards company for the restaurant industry that has successfully connected these systems. In March of 2014, AppSuite struck a partnership with BluePay, a payment processor based in the Chicago area, that currently serves thousands of restaurants around the United States. AppSuite and BluePay subsequently integrated AppSuite’s solution to BluePay’s proprietary payment gateway to accomplish the desired automation. Now merchants using this system simply have the staff swipe their card(s) into an iPad terminal and then the system automatically and securely links that card to their account. All future purchases are automatically rated without the user or wait staff doing any work at all.
Mike Crawford, an AppSuite customer and the owner of Hobnobbers restaurant in Sycamore Illinois, is using this integrated solution. “Customer growth and satisfaction have exceeded my expectations,” said Crawford. “This is a contemporary approach to automatically issuing and redeeming restaurant reward points and mobile offers that work in harmony with existing restaurant point of sale systems,” said Kristen Gramigna, Chief Marketing Officer of BluePay.