Category Archives: Pizza Restaurant Loyalty Systems

Loyalogy 2014 Consumer Study – Restaurant Rewards Programs Boost Visits 35%

Consumers Dining in Restaurant

 

 

February 18, 2014 – Asheville, NC – Loyalogy, leading provider of loyalty program analysis, data mining, reporting and consulting services to the restaurant industry, announced the results of its second annual U.S. study tracking consumer attitudes and behavior regarding restaurant rewards programs.

“Our latest study provides consistently clear evidence directly from consumers regarding the effectiveness of restaurant rewards programs and the importance of such programs to restaurant guests,” said Dennis Duffy, President of Loyalogy.

The study, based on detailed survey responses to 55 questions among 1,100 consumers from across the U.S., found that:

  • Consumers estimate an appealing restaurant rewards programs would increase their visit rate to a particular restaurant by an average of 35%.  This figure is consistent with the 2013 study.
  • Nearly three-fourths of consumers (73%) report they would recommend a restaurant more to others if that restaurant offered an appealing rewards program.  This figure is up from 65% in the 2013 study.
  • 86% of consumers prefer a rewards program with a clearly-defined proposition in which they earn rewards based on spending or visits rather than a program built solely on periodic, surprise free items.
    • 43% prefer a program that offers points which convert to rewards which may be spent like cash at the restaurant.
    • 43% prefer a program that is based upon visits, such as 8 visits spending a minimum amount each visit would generate a free meal.
    • 14% prefer a program that offers surprise free menu items that may be used for a certain period of time with no pre-defined criteria for receiving that free item.
    • Consumers desire a simple reward program enrollment process in the restaurant and would prefer to supply additional information online after they have left the restaurant.
    • Although consumer wallets are bulging with plastic cards, 60% of respondents stated that they don’t mind carrying a membership card for a rewards program if it’s necessary.
    • A single rewards program membership covering multiple restaurant brands has significant appeal to consumers.  75% of respondents agreed they would like to have one rewards program membership that was honored at multiple restaurant chains.  This figure is up from 73% in the 2013 study.
    • Consumers participate in an average of 3 restaurant rewards programs, up 15% from the 2013 study which found participation at an average of 2.6 restaurant rewards programs.
    • Consumers are visiting restaurants more frequently with an average of 13 times per month, up 26% from the 2013 study which found an average of 10.3 visits per month.
    • The 25 to 34 year-old age segment, which includes the oldest members of the Millennial Generation, demonstrates a more intense use of restaurants and rewards programs.  In our study we refer to this group as Millennials with Means because they fall into the Millennial age range and have a household income of $75,000 or more.
      • Millennials with Means visit restaurants 40% more (18.5 visits per month versus 13 visits per month for the overall population).
      • Millennials with Means participate in more than twice as many restaurant rewards programs (6.5 restaurant rewards programs versus 3 restaurant rewards programs for the overall population).
      • Millennials with Means are more responsive to rewards programs.  They estimate that an appealing restaurant rewards program will yield a visit increase of 43% versus 35% for the overall population.
      • Millennials with Means are much more interested in managing all aspects of their rewards program participation with a smart phone app.  A total of 57% of this group expressed a desire to do everything using a smart phone app versus 35% for the overall population.

ABOUT THE LOYALOGY CONSUMER RESEARCH STUDY

The Loyalogy consumer research study was conducted through an online survey of U.S. consumers between the ages of 25 and 65 with household incomes of $75,000 or more.  The respondents were selected from an online research panel provided by The Sample Network.  The survey consisted of 55 questions in categories that include:

  • Restaurant visit rate and spending, including breakdown of those who visit restaurants just for pleasure or both pleasure and business.
    • QSR.
    • Fast Casual.
    • Full-Service Casual.
    • Full-Service Fine Dining.
    • Visit rates in certain categories such as:
      • Coffee shops.
      • Traditional delivery/carry out pizza restaurants.
      • Gourmet pizza restaurants.
      • Take and bake pizza usage from specialty brands and gourmet grocers.
      • Gourmet burgers – also referred to as ‘better burgers.’
      • Bar and grill.
    • Participation rate in restaurant rewards programs.
    • Usage of online services (website or mobile app) such as Open Table, Yelp, Urban Spoon and Trip Advisor.
    • Usage of online ordering (website or mobile app).
    • Relative appeal of 14 different reward program benefits.
    • Attitudes about 9 different statements regarding carrying membership cards, using a phone number as identifier and receiving promotional e-mail messages from rewards programs.
    • Attitudinal statements regarding the impact of rewards programs on behavior.
    • Demographic characteristics.

Results of the study and detailed datasets for additional analysis are available at no cost.  Download the results of the study and detailed data at www.loyalogy.com.

ABOUT LOYALOGY

Loyalogy was founded by Dennis Duffy who has more than twenty years of experience developing, managing and analyzing customer loyalty programs. Loyalogy provides loyalty program data analysis and data mining services, online dashboard and reporting tools, loyalty program development and consulting services and workshops for companies contemplating a customer loyalty program.  For more information, visit www.loyalogy.com.

CONTACT

Dennis Duffy – President, Loyalogy, Inc. at 828-333-5860 or dennis@loyalogy.com.

Loyalty Reward POS Tracking System for Small Restaurants

Cash Register - Loyalty System for Small Restaurants without Integration

The preferred method of handling the logistics of a loyalty rewards program in a restaurant is with an integrated system in which the loyalty platform and the point of sale (POS) platform communicate with one another. The POS passes member data (card number, even if that card number has been retrieved via phone number or name look up as is quite common these days) and purchase data to the loyalty system. The loyalty system passes reward data (if a reward exists and is being used by the member on the transaction) back to the POS to be inserted into the check (as a discount or as a tender type). This approach is smooth and clean.

We hear from restaurant companies and operators who cannot achieve the integrated approach for one reason or another. Some of these companies are looking for an alternative method of collecting guest data which stands alone as a separate system and is not connected with the POS. This approach has its downsides and risks (reconciliation and potential fraud) but if a restaurant company goes down this path with eyes wide open it may be a better alternative than doing nothing.

A SIMPLE LOYALTY SYSTEM FRAMEWORK

My purpose here is to outline a potential approach or framework, envisioning a stand-alone, web-based computer system (simple loyalty, or, better yet, ‘Loyalty Simple’) that handles the most basic loyalty system functions and provides the most basic reporting functions to support the reconciliation to POS reporting.

  1. Adding guests to the system.
  2. Recording guest purchase/redemption transactions.
  3. Performing basic inquiries about guests, their profile information and their purchase/points/rewards history.
  4. Performing basic reporting functions.
  5. Allowing guests to register themselves for online access to view their profile and history.

This Loyalty Simple framework works best in a limited-service restaurant with few POS stations and a moderate number of daily purchase transactions (100-200 per day). It can be handled running on a small laptop or tablet device. For the purposes of explaining this framework, we won’t go into detail about exactly how this hypothetical loyalty program works, let’s just assume a member earns points that convert to rewards and that those rewards may be applied to a check in the restaurant as a discount.

ADDING A GUEST

In many programs, a membership card exists. However, in many instances, members don’t have their card with them when they visit the restaurant and most companies have developed alternate lookup capabilities, the most common of which is by phone number. The expectation has been created over the past several years and this capability is now expected by guests. So, in our framework, imagine there is no card. It’s all based on your phone number.

Here’s the situation. The guest is in the restaurant and wishes to join the loyalty program right now and earn points on the purchase he/she is about to make. What do we really need to collect?

  • Phone number
  • Name
  • E-mail address (maybe)
  • If e-mail address, an ‘opt-in’

This can be accomplished quickly to create a record for this guest so that you may begin recording purchase transactions by phone number. The reason we say ‘maybe’ when it comes to e-mail address is that the e-mail capture could be a subsequent step that the member may perform later online as part of a more complete registration process. The challenge with collecting e-mail addresses at POS is the address should be entered twice to reduce typing errors and some e-mail addresses these days get a little complicated. We don’t want to slow things down at POS.

RECORDING TRANSACTIONS

A member is making a purchase, identifies himself as a member and provides a phone number (the member has already been added to the system, either on a prior visit or just prior to making this transaction). After entering the phone number, the system identifies whether or not there are rewards available. If rewards are available, the member may choose to have those rewards applied to this check. The server input the gross amount of the check and selects the reward amount to apply. The system adds a transaction record with basic information (phone number, date, time, location, gross amount, rewards applied, net amount). The member’s balance is updated in the member record (adding points earned, deducting rewards redeemed). The system displays a summary screen for the server so that the server may perform the action required at the POS to insert the discount (from the reward) if a reward was used. The transaction records feed end of day reporting that lists all loyalty-related transactions so that they may be reviewed and the rewards redeemed may be compared to total discounts applied at the POS.

BASIC INQUIRIES

Store personnel may look up members to view their profile and history by phone number or name and view their information, balances (points and rewards) and view a history of their transactions.

BASIC REPORTING

Basic reporting may include lists of transactions for general review and reconciliation and to understand how many points have been awarded for the day, week or month if the restaurant is accounting for points awarded for an expense accrual. Also, member lists may be available for general review and for a total of outstanding points and rewards balances, once again for any accounting action depending upon how the company is handling accounting for their program. All reports should be available for export to Excel for additional manipulation, analysis and examination. This would also allow for transferring e-mail addresses from the loyalty system into whatever e-mail platform might be used by the restaurant company for general communication activities.

ALLOWING GUESTS TO REGISTER FOR ONLINE ACCESS

This is increasingly a standard and expected function. Members may have an account established in the loyalty system and then access the account through the restaurant company’s website. The first time the account is accessed, the member establishes a password and provides an e-mail address and any other desired information. The member may log-in moving forward to review/edit their profile information, balances and history.

THE CHOICE BETWEEN SIMPLE and NOTHING

The best approach is an integrated loyalty system and POS. But if it’s just not possible for your company for whatever reason, this Loyalty Simple framework might make sense. If you go down this path with your eyes wide open and understand the requirements of operating with such a framework it may be your best approach.