Creating Loyal Customers
It’s well known that it’s easier to turn regulars into even more frequent customers, but what many restaurants don’t know is how to do that.
Bryan Pearson, president of LoyaltyOne, a Toronto-based provider of loyalty strategy and programs,and author of the upcoming ‘The Loyalty Leap: Turning Customer Information into Customer Intimacy,’ tells Rmgt how to create more loyal customers for your restaurant.
What’s the difference between behavioral loyalty and emotional loyalty?
Behavioral loyalty comes when you can ask people if they are completely satisfied and it’s a transaction-based satisfaction. Emotional loyalty means the customer is actively engaged with the brand. It’s stronger loyalty.
The problem is that often, restaurant operators believe that behavioral loyalty is the right kind. ‘Buy one get one free’ are programs that just enhance behavioral loyalty, not fuller engagement with your brand.
How do you create emotional loyalty?
The key is you have to think more about how you leverage and create the full experience. Restaurant chains know what their brand is, but independents don’t. Chains have to think about how do you create that personal experience that will build loyalty over time. Restaurants typically don’t pay attention to who their customers are and don’t pay attention to a differentiated experience for them. They also don’t take advantage of any data and information they have on their customers.
Which restaurants are doing it right?
Starbucks has a prepaid card and the information that’s gathered around that is great. They’re doing a lot of things right. They take the stress out of losing the card as they register it and you’d get a replacement if you lost it.
The second piece is that they are taking advantage of that membership base by boosting the customer experience: Customers can write in and improve the Starbucks experience. Starbucks has a dedicated team who sift through the thousands of ideas from their customers and they look at the ideas and whether they’re feasible.
What does a good loyalty program consist of?
A good loyalty program focuses on the three Rs: Rewards (free beverages—the tangible elements), Recognition (different levels of service for your best customers or specific “gifts” such as a free glass of wine for best customers), and Relevance (creating a differentiated experience for each guest).
They key, though, is to really understand who are your best customers, and understand who is spending the most with you, and to understand what they are buying.
What are the best ways for restaurants to gather data on their customers?
Digital data collection on the web or through email is one of the better ways to gather data. It dramatically improves accuracy, delivery costs and turnaround. It also gives the marketer an opportunity for relationship building through the sign-up process. Consumers are offered a choice of delivery options, additional content, language preferences or the ability to share with a friend. In this way, data collection becomes an engagement device.
Who should be responsible for keeping a restaurant's customers loyal?
It needs to be the owner or, if it’s a chain, the executive suite that is running it—the C-level executives. It’s about the commitment the whole organization has about loyalty. It needs that level of commitment in time and strategy.
What is the single biggest thing a restaurant can do to create more loyal customers?
Understand what your customers love about you and build on those points.
Look at how much your best customers are spending, how frequently they come and how recently they’ve been in. Through that you can categorize those customers and that starts to give you a profile of who your best customers are.
Most companies spend too much time looking for new customers rather than getting existing customers to come in more times. There is a real conquest mentality but a loyalty initiative allows you to mine that and increase loyalty. So focus on the frequent customers but don’t forget the others.
What are the biggest mistakes restaurants make in terms of creating loyal customers?
When trying to create loyal customers, the biggest mistake restaurants can make is to neglect customer intimacy. Three things marketers should keep in mind to ensure their customers' loyalty are:
1. Effectively provide a reliable product and service.
2. Develop products that redefine 'state of the art.'
3. Provide a total solution to the customer's needs, not just your products or services.
By Amanda Baltazar
photo of starbucks card: Flickr.com/Slightlynorth