In today’s competitive restaurant industry, loyalty programs have become essential tools for driving customer traffic, fostering loyalty, and encouraging guests to order directly from your establishment. However, choosing the right technology to support your restaurant’s business goals goes beyond focusing on specific features. Assessing a loyalty platform’s impact on your bottom line is crucial. To help you make an informed decision, we’ve compiled eight vital questions to ask before investing in or switching to a new loyalty platform.
How Has the Platform Positively Impacted Similar Restaurants?
The primary goal of a loyalty program is to create sustained customer loyalty, which translates into increased foot traffic, spending, and profitability. To gauge a loyalty platform’s effectiveness, ask the provider for examples of how their platform has positively impacted frequency, customer retention, and profitability for restaurants similar to yours. Real-world success stories can provide valuable insights.
Does the Platform Encourage Customer Activation?
Many loyalty program participants must reach the crucial third purchase, significantly boosting the likelihood of future purchases. Ask if the platform offers user-friendly tools to motivate new loyalty members to become active program participants. Please inquire about the expected customer activation rate (customers with at least three purchases in the first 180 days) on their platform in the first year.
How Does the Platform Address Customer Retention?
Many restaurants need to pay more attention to retention in favor of acquisition despite having a reasonably high monthly retention rate. Ensure your chosen platform has features to drive customer retention and return lapsed guests. Ask for details on how these features work and the expected retention rate within the first year.
Can You Monitor and Adjust Rewards Cost-Effectively?
An effective loyalty program should provide the flexibility to adjust rewards and costs as needed. Inquire about how the platform tracks and monitors the cost of rewards and whether you can fine-tune the program to maintain a favorable cost-to-value ratio. Understanding the cost implications of your loyalty program is essential for long-term success.
Are Non-Discount-Based Rewards Available?
Reducing the Effective Discount Rate (EDR) can be achieved by integrating non-discount-based rewards into your loyalty program. These rewards can boost engagement while cutting expenses. Ask your loyalty provider about the availability of non-discount rewards, such as hidden menus, exclusive events/merchandise, or charitable donations, and their impact on the EDR.
How Does the Loyalty Program Integrate with Online Ordering?
Loyalty programs can significantly impact digital revenue when integrated seamlessly into the ordering experience. Ask about integrating the loyalty program with online ordering and delivery services and the expected increase in digital revenue. Seek case studies and testimonials from restaurants that have successfully integrated the platform with your specific online ordering system.
What Is the Transition Process from an Existing Program?
If you’re switching from a legacy loyalty platform, ensure a seamless transition to minimize disruptions and maximize engagement. Ask about the step-by-step process for transitioning an existing loyalty program, how members will experience the transition, and the expected percentage of active customers—request reporting options for monitoring this transition.
Does the Platform Support A/B Testing of Marketing Campaigns?
Long-term engagement is essential for the success of your loyalty program. Inquire whether the platform allows for A/B testing of one-time and automated marketing campaigns. Understanding the revenue impact of A/B testing can help you continuously improve marketing returns and customer engagement.
Conclusion
Selecting the right loyalty platform for your restaurant is a critical decision that can significantly impact your business. By carefully considering these eight essential questions, you’ll be better equipped to choose a platform that aligns with your business goals and exceeds customer expectations. Understanding the platform’s ability to deliver tangible business results will ensure your loyalty program remains competitive and valuable.
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