4 Must-Follow Steps in Implementing a Winning Loyalty App
Why would you burn your money by using mass marketing?
From the idea to a successful implementation of a loyalty app, we’re going to show you the steps required in order to implement a successful loyalty app.
You may be searching for a loyalty app, or you may have already implemented one, but it just hasn’t been successful. So let’s discuss the ideas and what it would take to roll out a successful loyalty app.
Let’s break it down and go over the four primary steps that are required in order to implement a successful app. Then we’ll cover some of the pitfalls and the common mistakes that everybody makes, and how to avoid those.
STEP ONE: Defining Your Objectives
What are the business goals? The very first thing you want to do is you want to have a clear idea of your end goal and objectives. Your end result. As it’s famously said, if you fail to plan, then you’re planning to fail. You don’t want to fall into that trap.Have a clear, concise and measurable goal.
What is it that you’re trying to accomplish by implementing this loyalty app?
Is it to increase sales and revenue? If so, how? How are you going to increase sales and revenue by implementing a loyalty app?
Is it to learn customer data and customer behavior? If so, why is it that customer behavior is so important to you? And then lastly, if you had all of your customer’s data through the loyalty app or CDP platform, how are you going to monetize that data? Do you have the means and the resources to monetize that data? And understanding your goals will allow you to create a loyalty app that will better align the app with your business vision and your end goals. Otherwise, you’ll be following the herd and you will be doing everything that everybody else is doing and making the same mistakes. And it would just ultimately lead to failure. If you’re trying to implement a loyalty app because you’re trying to get an email address or a phone number of a customer so you could market back to them somehow and get them back into the restaurant more frequently and get them to spend more money; if that’s the end result and the end goal, there’s a better way to do that without really implementing a loyalty app.
STEP TWO: Rolling out a loyalty app – Integrating your loyalty app into your restaurant’s systems
Just because you released the app or implemented the loyalty app, it doesn’t mean that you’re going to have a line of people downloading that app that is just simply not going to happen. . It’s not always gonna have the same desired outcome that one may expect.
In today’s environment, most people are not willing to give you an email address or phone number or yet download an app, another app right on top of all the other apps that they’re only going to use once a week and they’re going to get a $5 discount. That is just not going to happen. So set your expectations and make sure that you don’t set yourself up for failure.
If you’re implementing a loyalty app, don’t try to use it as a digital coupon book. It’s just not going to work. It’s not going to have the same impact that it did a decade ago where you would just send out these coupons and everybody would respond to it and come in. Make sure you don’t do that, because ultimately when you do that, you’re going to devalue your brand and you’re going to attract the least profitable customers, the bargain hunters.
You don’t want to implement a loyalty app and make it into a digital coupon book and bring in the least profitable customers into the restaurant, because that’s going to impact your net margins and your profits. And again, ultimately, it’s going to devalue your brand.
The next thing is to ensure that the loyalty app integrates with all of your other systems. So you want to make sure that they target your online ordering to your customer feedback, to your waitlist and reservation. And also very critically, it has to integrate to a customer data platform, a CDP.
STEP THREE: Marketing The Loyalty App
Now the hard work begins – marketing the loyalty app and letting all of your customers know in order to get them to join the loyalty app; and also giving the customer a very good reason why they should download another app or why they should give their phone number or email address.
You have to train your staff. You have to make sure that they know how to explain the loyalty app to your customers, the benefits, the advantages. You need to be very clear with your customers why you should download this app. Without proper marketing of the loyalty app everything is just going to end up being a flop. You’ll spend a ton of money and you’ll end up losing your time, money, resources that you invested into it. And again, it’s just going to attract those bargain hunters, and that’s all you’re going to get. So to put things in perspective, Starbucks spends hundreds of millions a year advertising their loyalty app, and they only have anywhere from 15 to 20% based on the numbers that are out there. They have about 24 million people in their Starbucks rewards program, but that’s only a fraction of their customers. So don’t set your expectations too high because you’re not going to be able to get more than 15 to 20% of your customers to join that app no matter what you do. So as we just highlighted with the Starbucks rewards program, you don’t want to focus on that 20% of the customers and discount everybody else and ignore the other 80%. You’ve got to make sure that you have programs that are built for those loyalty program customers. However, you also want to make sure that you don’t completely forget about the other 80% of your customers that are visiting who are not loyalty members, and they’re not part of that loyalty program. So be sure that you figure out that balance between the two so you don’t lose out on the 80% because you’re so focused on that 20% of the customers.
STEP FOUR: Monetization
Perhaps the most important part of implementing your loyalty app is how you monetize the data that you’ve gathered from your customers from that 20%.
A lot of smaller restaurant chains and even larger brands are still mass marketing to customers. We’re still sending the same “kids-eat-free” offer to all of our customers. That is not what you want to do.You’ve spent tons of money building that loyalty app. You’ve spent more time, more resources, rolling it out, informing all your customers that you’ve gotten people to join that app, and then you end up mass marketing to them. You send out a “kids-eat-free” offer to all of those customers, even though half of them or 70% of them don’t even have kids.
So why would you do that? Why would you burn your money by using mass marketing? You can’t do that with your loyalty customers because they’ll eventually just leave, unsubscribe and go somewhere else. If you don’t have the proper resources in-house to monetize that customer data and personalize it using personalized marketing messages, then don’t even bother implementing a loyalty app because it’s just going to end up being a flop and you’re just going to upset your customers and they’re going to go elsewhere. So don’t waste your time and resources.
If you don’t have the manpower, if you don’t have the tech stack or the knowledge of how to implement a successful loyalty app, it’s just going to end up being a disaster. And again, you’ll go back to those bargain hunters and you’ll bring those least profitable customers, which is just going to drive your margins even lower. And then you’re going to have to end up either scrapping the project or just running with it because you’ve got customers that are on there, but then you end up losing money on all of those customers. Once you have implemented that loyalty app, the target goal is that you understand the guest behavior, you know who they are, and how much money do they spend with your restaurant? What is their satisfaction score? Hopefully you’ll have that information. How often did they come in? What are their favorite items? Which locations do they visit now? All of this data that feeds into the loyalty app and if you have a CDP app, hopefully with all that information is being pushed into the CDP and personalizing marketing based on that behavior is where you are actually going to turn a mediocre loyalty program into a very successful loyalty program that differentiates you from everybody else.
Again, just forget mass marketing. You can’t do mass marketing and focus on personalized marketing to each individual customer based on their behavior. And now you have not just that information for loyalty customers, but you have it for almost all of your customers. And a key differentiator between a normal CDP and a really good CDP is the type of data that’s in there. If the CDP is not transactional, meaning it doesn’t have transactional data, then forget it.
Don’t even don’t even go any further. But what you want to ensure is that the CDP platform is actionable. None of this data makes any difference. If it’s not actionable, if you cannot monetize that data, it’s useless. So, a loyalty app must integrate into all of your systems. Make sure you communicate it effectively with your customers so they are aware that you rolled this program out and the benefits of it. Never, ever use that customer data to mass market to them and put that information in the hands of your frontline workers so they can treat every single customer like a VIP customer.
Implementing a winning loyalty app can be a powerful strategy to drive customer loyalty and increase revenue for your business. By following the four must-follow steps outlined in this blog – defining your loyalty program goals, integrating your loyalty app into your systems, promoting and launching your loyalty app effectively, and monetizing customer data – you can create a successful loyalty program that resonates with your customers and delivers tangible results for your business.
If you want to know more about the 4-Must Follow Steps in Implementing A Winning Loyalty Program, you can listen to the full podcast on Spotify or view the video on YouTube.