From Idea to Implementation: A Step-by-Step Guide to Launching a Successful Restaurant Loyalty App

A loyalty app is a small piece of the overall picture of operating a restaurant. Any source of data gathering must be transactional and even more importantly it must be actionable.
January 23, 2023

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Home » Blog » From Idea to Implementation: A Step-by-Step Guide to Launching a Successful Restaurant Loyalty App

You may be researching a loyalty app or have already implemented one, but it is not very successful. In this blog, we are going to review the steps required to create a successful loyalty app for your restaurant brand.

So let’s break this down from start to finish.

Step 1: Define your objectives

The very first thing that you must do is to define your objective, or your end goal. Why are you trying to implement a loyalty app? What is the end result that you are looking for? Is it to increase revenues? Is it to learn customer behavior? If so, why is that customer behavior so important? Do you know how to monetize the customer data if you had all of your customers’ data today? As it is famously said, “not planning is planning to fail,” so start with clear, concise, and measurable goals.

Step 2: Integration into your other systems

Implementing loyalty apps within the restaurant will not always have the desired outcome one may expect. Rolling out a loyalty app is not as easy as releasing an app and all of a sudden, you will have a line of people waiting to download the app. In the current environment, many customers are not willing to give an email or download yet another app that they will use once a week in order to get a $5 discount.

If you are implementing a loyalty app but simply are using it as a digital coupon book, it will not have the desired outcome that it once had a decade ago.

The next challenge in the implementation of a loyalty app is to ensure you get a complete picture of the customers’ data. This means your loyalty app must communicate with your POS, online ordering, customer feedback, waitlist and reservations, and the many other systems within your restaurant, otherwise, the data is incomplete and therefore not actionable. So choosing a solution that plugs into your Customer Data Platform is extremely important. If you need to learn more about Customer Data Platform, we have a great article that you can read here.

Step 3: Marketing your loyalty app

Once a loyalty program has been implemented, the hard work begins, convincing customers to join your loyalty program. Without proper marketing, your loyalty app will just simply be a flop. Assuming you are Starbucks and you have hundreds of millions of dollars to spend on your loyalty app, You will convince about 15% of your customers to join your loyalty program, so communicating and marketing your loyalty program is just as important as any other step.

Once your loyalty program is up and running, it’s important to effectively communicate it to your customers. This includes making sure employees are trained on the program and can explain it to customers, as well as using in-store signage, email marketing, and social media to promote the program.

It is important to note that the majority of your customers will not join your loyalty app, so do not focus strictly on your loyalty customers because you will miss out on a majority of your customers. Starbucks, for example, has about 15% of its customers in its loyalty program.

Step 4: Monetization

The last step is to ensure you have the proper resources in order to monetize the data you are gathering from your customers. Many small and even large brands gather the information, turn around, and mass market to their customers regardless of their purchase behavior. This is the absolute worst thing that you can do. You’ve spent countless amount of time and money to convince your customers to join your loyalty program to then turn around and mass market to them.

Successful monetization of any loyalty program is absolutely dependent on the personalization of your marketing messages to each individual customer. You must have the resources to analyze your customer’s data such as purchase history, favorite items, locations they visit, how often they dine in and etc in order to personalize your offers and promotions to each individual customer.

Again, we highly encourage you to read about Customer Data Platform so you understand the value of actionable transactional data and how to monetize it effectively.

Mistakes to avoid implementing restaurant loyalty app

Devaluing your brand

A loyalty app should not be about discounting, couponing, and devaluing your brand. Remember that there is a time and place for everything including coupons and discounts, Think of creative ideas that you would want if you were the customer of your own restaurant. For example, if you are a difficult restaurant to get a reservation for, an excellent loyalty app perk is to allow those high spenders to bypass the typical Reservation blocks. Another example is to allow the loyalty app customers to skip the line during busy times.

Mass marketing

With today’s technology, mass marketing is absolutely unacceptable. As mentioned before, put yourself in the shoes of your customers. If you are a vegetarian and you consistently get meat specials, how long would it be before you unsubscribe and leave that loyalty system?

The idea of implementing a loyalty app is to learn the behavior of your customer and personalize your messaging, remember, the right message at the right time using the right channel.

Not sharing with your front-line staff

Another mistake that brands make is closely guarding that customer data and not putting it in the hands of the Frontline workers where it can be used to elevate your customers’ experience.

A great example is when a brand is aware of a customer’s peanut allergy but they do not make that information available to the hostess using a waitlist and reservation app. You have to make the information available to your front-line workers and give them the tools they need in order to treat every customer like a VIP customer.

Conclusion:

A loyalty app is a small piece of the overall picture of operating a restaurant. Any source of data gathering must be transactional and even more importantly it must be actionable. So be sure your loyalty app integrates to all of your systems, be sure you communicate it effectively, never use customer data to mass market and lastly, put that information in the hands of your front-line workers and give them the tools they need to treat every customer like a VIP customer.

Milagro has solved the complex problem of implementing a loyalty app that deeply integrates with all other systems running within the restaurant to give you a complete overview of your customer while making that data available to those making the decisions. Contact us to schedule a demo.

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