Loyalty Programs Make Casual Drinkers Frequent Customers
Remembering your favorite beer at Howells & Hood can get a little complicated.
The number of taps at the Chicago restaurant clocks in at 114. And like many restaurants with a large beer program, the taps are in constant rotation.
There are the usual categories of beer, such as IPAs and lagers, but also seasonal beers, local brews, and limited-selection barrels. So it’s little surprise that guests’ memories can get a little foggy about beers they’ve ordered before.
“We got a lot of feedback from guests that tells us they would like to be able to track and rank the beers,” says Angela Zoiss, marketing director for Bottleneck Management, parent company of Howells & Hood.
So recently Howells & Hood, along with sister restaurant Old Town Pour House, unveiled an interactive beer tracker on its websites. The online tool lets guests track and rate beers they drink, share the information on social media, and read recommendations from drinkers with similar palates.
Programs to reel in beer lovers have existed for years, but the uptick in craft beer consumption has restaurants re-examining whether they’re doing enough to convert beer drinkers into dedicated customers. Restaurateurs are investing in innovative websites, mobile apps, and even old-fashioned punch cards to target these drinkers, and executives say they’re the ones reaping large rewards.
The notion behind beer loyalty programs has little to do with monetary rewards. In fact, cultivating regulars and satisfying their tastes ranks as the primary aim for a beer loyalty program — much more so than growing beer sales or even attracting new customers, according to restaurant executives interviewed for this story.
At Brixx, a North Carolina–based pizza chain, beer revenue was an afterthought for the Masters of Beer Appreciation (MBA) loyalty program.
“It builds relationships with guests and turns one-time guests into friends and regulars,” says Jeff Van Dyke, the managing partner at Brixx, who dreamed up the tongue-in-cheek MBA. “It definitely drives beer sales, but the big reason to have it is just to create a fun experience at Brixx with the beer. I think if people have fun, they’re going to be back.”
The MBA, which is run through wallet-sized punch cards, started in 2001 and has grown to 12,000 participants. Van Dyke says participation in the program is strongest in the first year or two after a location opens.
“We don’t try to drive new customers in with it, but we try to build frequency with our guests who do sign up for the MBA,” Van Dyke says.
Zoiss at Bottleneck Management echoes the sentiment, adding that the purpose of the revamped website for Howells & Hood and Old Town Pour House is to engage loyal fans with an up-to-date system.
“We’ve got our regular guests that we’re positive will love it,” Zoiss says. “But I think with any new venture like this, you realize that doing something creative and fun attracts new people, as well.”
Proof of Loyalty
Data show that diners who partake in a loyalty program are more likely to return to the restaurant.According to a Technomic report published last spring, 58 percent of restaurant-goers will opt for an establishment where they earn loyalty points.
California-based Patxi’s Pizza introduced a loyalty program recently using Thanx, an app that runs loyalty programs by linking to customers’ credit cards.
At Patxi’s, the top 10 percent of loyalty club spenders in a given month become VIPs and are eligible for 2-for-1 beers. The program has proved very successful and impressively lucrative: Patxi’s found that the average check for a VIP is 50 to 100 percent higher than what a typical guest spends.
“It’s exactly what we like to see,” says Patxi’s marketing manager, Jordana Heinke. “We like for our customers to feel like they’re VIPs, and in turn they’re rewarding us by continuing to be a frequent and highly valued customer.”
Zach Goldstein, CEO and founder of Thanx, says he’s not surprised by the higher check average for Patxi’s VIPs. “Loyal customers tend to be less price-sensitive, and, when they redeem their cash-back reward, these guests often spend more than they usually do,” he explains.
Other lessons Goldstein has learned by monitoring Thanx are that customers who feel valued will come more frequently, particularly when a future reward is within reach. Additionally, satisfaction rates are much higher among loyal customers.
“Every person has a handful of businesses—usually five to 10 places—where they go with regularity,” Goldstein explains.“What we all are looking for is to be recognized. So what these loyalty programs should do is not only give a guest rewards or discounts, but also create an opportunity to really personalize that relationship.”