restaurant business plan


Starting a Restaurant Business Loyalty Program

Holding on to current customers is much easier than bringing new customers in the door. While it is always crucial to keep expanding your new customer base and bringing in new diners, most restaurant owners waste too much energy on, and spend too big a chunk of their marketing efforts on new customers at the expense of not keeping their existing customers.

With a good loyalty program in place, this doesnít have to be the case.

A loyalty program is applicable for all levels of restaurant service and style. Many restaurant owners who run more upscale establishments think that loyalty programs are only for bargain hunters and fast food type restaurants, but this isnít true at all. A well planned and appropriately themed loyalty marketing plan will work for any establishment and can bring a tremendous return on investment in terms of increasing both the per ticket averages and frequency of visits.

The most cost effective loyalty program is run using an email program where customers can get deliveries instantly and can print out coupons or other rewards, and can also get links to the restaurant website or other promotions. More expensive, though sometimes more effective, is mailing a postcard or other direct mail piece to reach the customers. A mix is often the best compromise, such as using email most of the time, but then sending a postcard at Christmas or for a customerís birthday.

The loyalty program should be very easy to join. This means customers should have to give a minimum of information, and it should be very easy for them to get the information entered. Often this means a card to sign up is presented with the check at the end of the meal. It shouldnít ask for more than a name and an email address or mailing address.

To increase the conversion rate- that is the number of people who sign up, the reward should be inviting enough. The most compelling reward is an instant discount on the current check, or an instant reward such a comped dessert or beverage.

To be effective the follow up must be regular and offer the customers a compelling reason to come back in. This doesnít necessarily have to be a discount, though it often is at many restaurants. Being more creative, however, can often pay even bigger dividends. For example, an invitation to a special menu night, a themed event night or a special dessert or other treat event is going to draw interest without requiring a discount or other profit reducing measures.

Another option is to simply mail and info piece or newsletter that keeps the brand and location in the customerís mind without directly calling them to come in or offering a reward. The best loyalty program is a mix of these elements- rewards, special invitations and news. It should be delivered not more than once a week and usually only every other or once a month to be most effective. If it comes to often, people feel it is intrusive and then they opt out of getting anything at all.

No matter how you do it, if you want to have the most successful and highest grossing restaurant possible, you will make a loyalty program a key part of your overall restaurant marketing strategy.

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