Are You Making the Most of Your Loyalty Program Data?
The value of guest data is indisputable. All restaurant marketers want to know when guests visit their stores, how often they visit, what they buy, and how much they spend. But knowing this information is only part of the battle.
The key is leveraging what you know about your customers and sending offers that motivate them to visit more often and spend more money. No one understands this better than Shari’s Cafe and Pies. The 95-unit Pacific Northwest family-dining concept is a true rock star when it comes to incorporating data into its guest engagement strategy.
I have worked with Shari’s since its Cafe Club loyalty program launched in May 2014. The structure is pretty simple: guests receive a $5 reward for every $100 spent, a slice of pie for registering for the program, and an additional slice on their birthday. They also receive one free signature pie shake—one of the most popular items on the menu—for every five purchased. And while the guests are getting great rewards for participating in the program, the Shari’s team is learning a ton of valuable intel about its program members.
Shari’s first foray into loyalty was a seniors-only discount program, but the brand realized the best way to attain sustainable growth was to attract younger audiences. When the Cafe Club program launched in 2014, only 30 percent of Shari’s guests were under the age of 45. By the summer of 2016, that number jumped to 50 percent. Shari’s accomplished this admirable feat by orchestrating a strategy designed to attract younger customers.
By learning the age of its loyalty program members and segmenting by age group, Shari’s ran campaigns that resonated with younger guests. By using loyalty program data analytics to track the steady progress of its demographic shift, Shari’s knew its strategy was working.
Shari’s also focused on reaching out to lapsed guests and enticed them to visit by sending rich rewards. Without the data necessary to distinguish between lapsed guests and the most frequent guests, this becomes a risky initiative.
Imagine sending every guest an offer of $20 off a $50 purchase. That’s great for the people who weren’t planning on visiting, because those who take advantage of the offer are visiting and spending more than they normally would have. But what about the guests who were already planning to come in and spend $50? They didn’t need that extra motivation to visit, but now they’re getting a $20 discount for essentially doing nothing. This hurts campaign ROI, but Shari’s data analytics strategy reduces this risk because offers are adjusted accordingly to meet guest visit frequency.
Shari’s built segments of guests who were either new to the loyalty program or had become inactive members. Shari’s knew these guests were not going to come in anyway, so sending rich rewards would result in a lift in visits and spend. Shari’s ran a four-day promotion where rewards were based on guest segmentation. Members received rewards that best fit their customer profile, and as a result visit frequency increased by 27 percent over the four days and spend increased by 8 percent (net of the discounts).
This highlights the true value of loyalty data, but there’s more to this process than simply collecting information. Knowing how to interpret results is an equally crucial component of loyalty data management. My work with Shari’s Cafe and Pies has empowered the Shari’s team to make smart data-backed decisions regarding everything from what promotions to run to menu development. The Shari’s team knows they are making the right decisions because they know what insights to take away from their loyalty program data.
Ultimately, the more you know about your guests, the more confidence you’ll have in making decisions about your restaurant. Knowing their interests can help you craft messages that resonate with your guests. Knowing their visit and spend behavior can allow you to manage your campaigns to maximize profits. I discussed this topic with Carrie Henderson, the Marketing Manager at Shari’s Management Corporation, in a recent webinar. In this presentation, Carrie shared how they are leveraging loyalty data to drive their guest engagement strategy, which has so far produced fantastic results.