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Guest Loyalty Programs for the Next Millennium:
Borrowing the Best Tactics & Technology from the Travel & Supermarket Industries
By Charlotte Bogardus
When splurging on a restaurant meal, customers expect the highest quality service possible. Personalized service is a must to keep customers satisfied and coming back. For a small "Mom and Pop" establishment, it is easy for a manager to know loyal customers by name and to remember their favorite dishes on the menu. Larger chains have a harder time establishing theses personalized relationships. One way to solve this problem: use recent breakthroughs in technology to develop guest loyalty programs.
Guest loyalty has faced tepid reception among restaurateurs, due mainly to the previous limits of the technology involved in administering these programs. Beginning with simple punch card systems, guest loyalty programs have evolved into 10 percent across-the-board discounts once a customer reaches a certain level of spending. Now, new Point-of-Sales (POS) integrated systems allow management to harness robust database platforms gathered from customer transactions and offer flexible reward options while using proven tactics borrowed from the supermarket and travel industries. These innovations mean that a whole new era of customer loyalty will be available to operators in the year 2000.
Flexible Real-time Rewards Systems
The ultimate purpose of a guest loyalty program is to build sales. This can be done in three ways:
- Increase the per-check amount customers spend
- Expand the frequency of visits by existing customers
- Generate trials by new customers
Loyalty programs should be designed to perform one of these sales-building feats in a very focused and measurable way, but should also have the flexibility to execute any and all of these functions. The necessary technology must have the ability to automatically "trigger" rewards based on menu items ordered, time of day or day of the week, pre-set spending levels, number of visits or a significant anniversary or event. Loyalty programs that are highly integrated with the POS System and supported by powerful database applications can drive all this flexible rewards capability.
Following is a rundown of the features and benefits on the horizon for loyalty programs of the future:
Loyalty Program Rewards--The Supermarket Model
The scan-saver loyalty programs instituted by supermarkets have had widespread acceptance and usage. Some grocery chains have seen up to 60 percent participation from their customer base. Restaurants can easily implement this reward model. The result: priority pricing based on membership that will prove attractive to restaurant guests. Diner "A" pays $15 for his pasta dinner, while Diner "B" pays only $12 because he is a dining club member. Managers and restaurant personnel can change this priority pricing daily by menu items based on availability and pricing of the discounted product to the restaurant. At the end of the meal, the restaurant guest can see tangible results: they saved $3 on this meal because of what they ordered and their club membership.
Loyalty Program Rewards-The Rental Car Model
If you are a VIP member of a rental car company loyalty program, you can avoid lines at the airport ticket counter and go straight to your car. This valuable customer option has minimal cost to the rental car company. For restaurants that do not take reservations, there would be great value for loyal customers in being able to avoid long waits and getting priority seating. During a Saturday night rush, diners would be thrilled by the chance to be seated and order their favorite dish right away.
Predictive "Upselling" Opportunities
A highly integrated loyalty program gives restaurant operators instant access to summary customer sales data based on past purchasing patterns. Industry gurus are predicting a four percent increase in sales using such upselling technology. If Joe and Jane Diner are frequent wine drinkers, have a preference for fish and often order appetizers, this is highly valuable information for the server to have at the beginning of their visit. By asking the diners for their guest loyalty program numbers at the beginning of the dining experience, the server will have many "upselling" opportunities at his or her fingertips. Swiping the guest's card at the minute the check is opened will give upselling instructions to the server at the POS terminal, proving this to be a valuable tool in both full service and quick service operations.
Ability to Use Any Card or Number as the Guest Loyalty ID
New frequent diner programs exist that have the ability to search the customer database based on name, credit card number, phone number, and frequent diner number. These programs allow for flexibility of using one or more credit cards as the frequent diner card. In addition, phone numbers can serve as the Frequent Diner Program (FDP) number or work in lieu of the FDP number if the customer forgot his or her card. This option makes the program much more user friendly for the restaurant guest.
Customer Relationship Management Systems and Optimizing Customer "Touch-points"
Restaurant operators are realizing that loyalty programs are just one part of a multi-part customer relationship management (CRM) system. CRM software that mounts directly onto the POS System manages all the customer touch-points and enhances the value of each of the applications. These CRM modules include guest loyalty, gift certificate or gift card management, delivery and take-out, advanced reservations, customer comment card, credit card tracking, and campaign management. As an added benefit, these modules can also be "web-enabled" to extend to yet another customer touch-point to seamlessly send and retrieve customer information in real-time, keeping management up to date on an entire chain.
The information gleaned from any one of these modules can be very useful to the rewards system and marketing opportunities for the loyalty program. With a whole CRM System, operators can cross-promote different selling opportunities in order to strategically build the business.
By implementing any of the above guest loyalty programs, managers take the first step in better managing their customer relationships. The promise of savings and personalized service will motivate guests to return. Management can then use this specific behavior to continue to build the customer centric restaurant they strive to be.
By Charlotte Bogardus, President of Gazelle Systems, Inc. Gazelle Systems, formed by hospitality
professionals Charlotte Bogardus, Curt Bean and Chuck Ellis, offers software and data services to
help owners and operators plan and execute sales-building programs based on real customer information.
For further information on Gazelle products and services, contact Gazelle Systems at 381 Elliot Street,
Newton Upper Falls, MA 02464. Telephone number is (617) 630-8600; fax (617) 630-8424; Web site
www.gazellesystems.com;
email sales@gazellesystems.com.
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