loyalty

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January 3, 2018

The quick service restaurant industry is a highly competitive

landscape with little variation between competitors. Identifying

your customers and finding ways to increase the frequency of their

visits and how much they spend can mean the difference between

success and failure. Offering a meaningful loyalty program can be

a great way to stand out from the crowd.

By Heather Gouinlock, Manager, Business Analysis and Strategy,

Global Solutions, LoyaltyOne

Thanks to an abundance of customer choice and a lack of brand differentiation, the quick service

restaurant (QSR) category has long been highly competitive. And while traditional areas of focus

related to the customer experience, such as customer service, menu variety, etc., continue to be

important, one area where owners and marketers may find a chance to stand out from the crowd is

a tactic perhaps more often associated with traditional retailers — the loyalty rewards program.

From better tracking of same store sales to driving value from your clientele, there are many

reasons QSR players should consider launching a loyalty program in 2018. Here are just a few.

Customer Identification

A meaningful loyalty program offers customers a compelling reason to self-identify, opening a

direct line of communication between QSRs and customers and capturing useful data for the

brand. This data offers owners the chance to personalize the dining experience for customers in

new ways, from targeted offers based on previous trips to the restaurant to special gifts for a

birthday. These tactics can be highly effective, with Forrester finding that personalized

marketing leads to a 15 percent average sales lift over three years. Customers also feel that

sharing personal information is worthwhile to receive tailored communications. The 2017

LoyaltyOne Consumer Sentiment Study found that 52 percent of U.S. consumers agreed that

they would provide more personal information if companies sent them communications and

product offers based on the data they collect. Imagine a staff member remembering your name

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and favorite order, and the sense of convenience and familiarity that would create. More data

leads to greater personalization, which can help create a real feeling of “this is my place” for

customers, even at a branch of a major chain.

Better Tracking

Many QSRs and restaurants measure success by the YOY same store sales metric, but most

don’t have any real data on where those sales are coming from (new customers, returning

customers, etc.). Loyalty programs offer a tailor-made solution for this problem, providing

reliable, up-to-the-minute information about how many customers are frequent visitors. Once

you have detailed information about who is returning to your restaurant repeatedly, you also

have the ability to more precisely strategize how to drive same-store sales.

Increased Value From Current Customers

Thanks to the real-time customer data that QSR loyalty programs capture on customers, they

offer QSR and restaurant marketers the chance to drive up both the frequency of visits and the

amount spent while in the restaurant through special offers. Targeted offers such as limited-

time discounts based on past purchases and the prospect of earning bonus points on purchases

are both proven to increase the likelihood of customers returning: the 2017 LoyaltyOne

Consumer Sentiment Study found that 66 percent of U.S. consumers tend to buy more

products or services that give them the opportunity to earn points, miles or rewards vs. those

that don’t. A truly strategic rewards program will also use this information to design targeted

communications and offers that incent trial of new or alternative products, promote higher-

margin items or drive volume at key times of the day like breakfast or lunch.

Improving the Customer Experience

An effective loyalty program also offers the ability to identify and improve upon pain points

within your customer experience. This is particularly critical in the QSR and restaurant space

where one poor experience can result in a lost customer forever. Loyalty program members are

a built-in source for real-time feedback on the restaurant experience. Are they frustrated by

wait times, lines, cleanliness or a lack of certain menu items? Your loyalty program can help

you pinpoint those grievances before they become major problems. More importantly, it can

also help you correct them quickly.

From an improved customer experience to gathering data that will help convert current customers

into high-value patrons, the benefits of implementing a loyalty program at your QSR are numerous.

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If you don’t have one in place already, you are missing a valuable opportunity to be more

competitive.

Be sure to check back in for our next “Speaking of Loyalty” newsletter; I’ll share some tips on how

to implement a program that makes the most impact on your business’s bottom line and share

strong marketplace examples.

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