Five big mistakes we see with restaurant loyalty program management

These are five big mistakes we see with restaurant loyalty program management, based on in-depth program and data analysis of seventeen restaurant loyalty programs:

  1. Set it and forget it. A program is launched and put on auto-pilot.  Nobody’s steering.
  2. Count what’s easy. How many members do we have?  Instead of – How are members behaving?
  3. Assume incorrectly that all the members in your program have visited at least once.
  4. Rely on and trust averages when it comes to member visits and spending.
  5. Presume that the members who were active last year will also be active this year.

If some of these apply to you, it might be time to step back and take a fresh look at things:

  1. DON’T set it and forget it. The following guidelines will help you ensure that you’re not in ‘set it and forget it mode’.
  2. DON’T count what’s easy. Counting the number of members is a very basic starting point, but you should monitor more meaningful KPIs on a regular, periodic basis.  Overall and by store location, these should include new members added, cumulative members, members active in a period, average visits per active member and average check.
  3. DON’T assume all your members have visited at least once. Look at your enrolled/registered members to see how many have not had a visit.  That’s fertile ground for specific campaigns and offers to get these members off the sidelines and into the game.  Do this periodically as more new members come on board without a visit.
  4. DON’T rely on and trust averages when it comes to member visits and spending. I’ve seen companies look at primitive averages such as: our average member visits 5.7 times per year and spends $161.60.  The average guest simply does not exist.  Averages lie.  They disguise what’s really going on.  What’s more insightful are KPIs viewed through a segmented framework.  Segment your member base on visits in the past 12 months and include KPIs for each segment: number of members in that segment, total visits in that segment, total spending in that segment, visits per member, average check, average spend per member, and the percentage each segment represents of the total in terms of visits and spending.
  5. DON’T presume that members active last year will also be active this year. I’ve seen year to year retention rates vary widely from 30% to 60%.  The rates should be monitored using the same usage-base segments as I’ve described in #4 above, because the higher frequency members will have a higher retention rate.  This should be monitored on a rolling basis so that you don’t need to wait a full year to see if things are getting better or worse.

Loyalty programs need a periodic review and tune-up to ensure that they’re not slipping off course.  It’s a health check that involves analysis of the program and its detailed member, transaction, redemption and campaign data.  The insights will help get your program on course with a roadmap to drive better performance, increased visits and increased sales.

NEED HELP? Contact me.

Consumer Segmentation and Behavior – Restaurant Loyalty Rewards Programs

RESTAURANT CONSUMER SEGMENTATION REGARDING LOYALTY REWARDS PROGRAMS

Restaurant Loyalty Segmentation

The Rewarding Diners consumer segmentation of restaurant diners and use of restaurant loyalty rewards programs helps restaurant companies understand dining and loyalty behavior among discrete consumer segments. The segmentation is based upon a U.S. national survey with 1,122 responses from consumers aged 25 to 65 with household incomes of $75,000 or more.

For companies planning or currently executing a restaurant loyalty rewards program, this segmentation enables several things:

  • Improved targeting by understanding those guests that represent the greatest opportunity. Loyalty programs are tie-breakers that allow companies to generate incremental visits by shifting visits within the category from a competitor to your brand. By understanding how many visits per month certain consumers have in the category, you may compare how many visits they have with your brand to understand how many additional visits may be shifted to your brand.
  • Comparison of this national-level segmentation, with breakouts by QSR, casual dining and fine dining, against an individual company’s guest composition. This is best accomplished by comparing the data in this segmentation to a similar survey conducted with your specific guests. This segmentation study provides a framework that may serve as a starting point to use when placing guests into a segment based upon their results to a survey.
  • Better understanding of the makeup and likely needs of segments to maximize relevance in marketing efforts.

The segmentation uncovers six discrete segments:

  • Power Brokers
  • Good Fellows
  • Working Values
  • On The Go
  • Casually Focused
  • Frugassional

POWER BROKERS

Restaurant Loyalty Segmentation

These consumers represent 7% of the population and 27% of the spending. They use restaurants for business and pleasure. They’re young (52% less than 35 years of age), successful (35% have a household income of $150,000) and they source meals from restaurants every day. Their average monthly restaurant visit rate is 30.8 and they use all types of restaurants, with 7.3 fine dining visits, 10.6 casual dining visits and 12.9 QSR visits. The highest percentage of their restaurant category spending is in fine dining (39%).

Restaurant Loyalty Segmentation

Power Brokers are 57% male and well educated – 78% have a bachelor’s degree or graduate degree. Among this group, 37% have paid a fee to join a restaurant loyalty program. They’re highly engaged with restaurant loyalty programs with an average participation of 12.2 programs. They’re highly motivated by loyalty programs – they estimate their visits will increase 43% as a result of an appealing restaurant loyalty rewards program.

GOOD FELLOWS

Restaurant Loyalty Segmentation

This segment is labeled ‘Good Fellows’ because 71% of the members in the segment are male. They use restaurants for business and pleasure. They represent 10% of consumers and 14% of spending. They cluster in the 35-54 age range (58% in that range) and in the lowest income bracket among the sample (45% with household incomes of $75,000 – $99,999). Their average monthly restaurant visit rate is 14.5 and they use all types of restaurants, with 2.3 fine dining visits, 4.9 casual dining visits and 7.3 QSR visits. The highest percentage of their restaurant category spending is in casual dining (39%).

Restaurant Loyalty Segmentation

Good Fellows are 71% male and well educated – 70% have a bachelor’s degree or graduate degree. Among this group, 26% have paid a fee to join a restaurant loyalty program. They’re moderately engaged with restaurant loyalty programs with an average participation rate of 5.3 programs. They’re highly motivated by loyalty programs – they estimate their visits will increase 39% as a result of an appealing restaurant loyalty rewards program.

WORKING VALUES

Restaurant Loyalty Segmentation

This segment represents 16% of consumers and 10% of spending. They use restaurants for business and pleasure. They cluster in the 35-54 age range (59% in that range) and in the lowest income bracket among the sample (46% with household incomes of $75,000 – $99,999). Their average monthly restaurant visit rate is the lowest in the ‘business and pleasure’ category at 6.7. They use all types of restaurants, but at a moderate rate with 1.1 fine dining visits, 2.4 casual dining visits and 3.3 QSR visits. The highest percentage of their restaurant category spending is in casual dining (44%).

Restaurant Loyalty Segmentation

Working Values are 56% male and well educated. 65% have a bachelor’s degree or graduate degree, but of note is the fact that this group has the highest percentage of graduate degrees in the study (25%). Among this group, only 14% have paid a fee to join a restaurant loyalty program. Their engagement level with restaurant loyalty programs is low with an average participation rate of 2.0 programs. However, they’re still motivated by loyalty programs – they estimate their visits will increase 36% as a result of an appealing restaurant loyalty rewards program.

ON THE GO

Restaurant Loyalty Segmentation

This segment represents 10% of consumers and 20% of spending. They use restaurants only for pleasure. They cluster in the 35-54 age range (53% in that range) and in the lowest income bracket among the sample (55% with household incomes of $75,000 – $99,999). They use restaurants regularly, with an average monthly visit rate of 22.3. They use fine dining about twice (2.1 times) per month, but the lion’s share of their restaurant visits are in the QSR (12.4 visits per month) and casual dining (7.8 visits per month) categories. The highest percentage of their restaurant category spending is in casual dining (48%).

Restaurant Loyalty Segmentation

On The Go are 57% female and well educated. 64% have a bachelor’s degree or graduate degree, but of note is the fact that this group has the second highest percentage of graduate degrees in the study (24%). Among this group, only 13% have paid a fee to join a restaurant loyalty program. Their engagement level with restaurant loyalty programs is moderately low with an average participation rate of 3.3 programs. They’re motivated by loyalty programs but at a rate lower than the population average – they estimate their visits will increase 30% as a result of an appealing restaurant loyalty rewards program while the overall population average is 35%.

CASUALLY FOCUSED

Restaurant Loyalty Segmentation

This segment represents 18% of consumers and 18% of spending. They use restaurants only for pleasure. They cluster in the 45+ age range (64% in that range) and in the lowest income bracket among the sample (52% with household incomes of $75,000 – $99,999). They use restaurants about once every three days, with an average monthly visit rate of 10.3. They use fine dining occasionally – about once (.9 times) per month. Most of their restaurant visits are in the QSR (5.3 visits per month) and casual dining (4.1 visits per month) categories. The highest percentage of their restaurant category spending is in casual dining (57%).

Restaurant Loyalty Segmentation

Casually Focused are 65% female and moderately well educated. 56% have a bachelor’s degree or graduate degree. Among this group, only 4% have paid a fee to join a restaurant loyalty program. Their engagement level with restaurant loyalty programs is low with an average participation rate of 1.9 programs. But, they’re motivated by loyalty programs – they estimate their visits will increase 38% as a result of an appealing restaurant loyalty rewards program.

FRUGASSIONAL

Restaurant Loyalty Segmentation

This segment represents 39% of consumers and 11% of spending. They use restaurants only for pleasure. They cluster in the 45+ age range (74% in that range) and in the lowest income bracket among the sample (56% with household incomes of $75,000 – $99,999). They use restaurants about once per week or less, with an average monthly visit rate of 3.8. They use fine dining rarely – about once every three months (.3 times per month). Their sparse restaurant visits are in the QSR (1.9 visits per month) and casual dining (1.6 visits per month) categories. The highest percentage of their restaurant category spending is in casual dining (58%).

Restaurant Loyalty Segmentation

Frugassional are 65% female and moderately well educated. 57% have a bachelor’s degree or graduate degree. Among this group, only 1% has paid a fee to join a restaurant loyalty program. Their engagement level with restaurant loyalty programs is very low with an average participation rate of just .6 programs. But, they’re motivated by loyalty programs – they estimate their visits will increase 31% as a result of an appealing restaurant loyalty rewards program as compared to 35% for the overall population.

IMPLICATIONS

Two segments – Power Brokers and On The Go – represent just 17% of consumers but 47% of spending. On the other end of the spectrum, Frugassional and Casually Focused represent 57% of consumers and just 29% of spending.

For fine dining restaurants, Power Brokers represent the greatest opportunity. They dine out daily, use fine dining restaurants on a regular basis and spend the greatest percentage of their restaurant spend with fine dining restaurants. They’re quite likely to pay a fee to join a rewards program and are highly motivated by rewards programs. Good Fellows are a secondary focus for fine dining restaurants and a primary focus for casual dining.

For casual dining restaurants and QSR, On The Go represents the greatest opportunity. They dine out more than 22 times per month and are more focused on casual and QSR than fine dining. They’re not as highly motivated by rewards programs as other segments, but they still estimate a visit rate increase of 30% as a result of a good loyalty program. Good Fellows and Casually Focused are a strong secondary focus for casual dining because of their concentration of spending in that category and their level of motivation as a result of loyalty programs.

The Working Values and Frugassional segments are not strong targets for restaurant rewards programs. They are motivated by rewards programs, but their lifestyle or life stage dictates a limited level of restaurant usage. Their conditions may change in a manner that encourages or allows more restaurant usage, but restaurant companies should be mindful that if they engage with these consumers in a loyalty program, they will demonstrate a low visit rate.

Home Depot Garden Club

It’s estimated that there are about 90 million consumers in the United States who take part in gardening in some way, shape or form. It’s a hobby for some, a passion for others. Anyone can be a gardener; it just takes a willingness to give it a try and a few basic tools.

The Home Depot created its garden club some years ago to help gardeners with any skill level get started and be as successful as possible with their gardening endeavors.

There are other resources available to help gardeners keep track of their gardening projects and document the success of their gardening projects over time.  One resource of note is Muddy Boots Plant Tags.

DOCUMENTING YOUR GARDEN/TRACKING YOUR SUCCESS

Muddy Boots Plant Tags is a garden record-keeping system which allows gardeners to add plant information to their personal database along with pictures and journal notes.  It’s a new platform for gardeners to do what they’ve always done: label plants, make notes and organize pictures.  But it enables all of that with a web-based tool that makes all of your garden information available with a computer, smart phone or tablet.  You can take all of the gardening information with you out to the garden in your pocket.

Muddy Boots Plant Tags also features optional QR-coded, interactive plant tags.  The dilemma gardeners have faced for years is that traditional plant tags (some refer to them as plant labels or plant markers) wear down over time, get lost or just cannot be read anymore.  Muddy Boots Plant Tags are aluminium and etched with a QR code that can be scanned with any smart phone or tablet using one of many free QR code reader apps.  This allows you to scan a tag in the garden and read all of the information you have in your personal database on your phone, instead of crawling around on the ground looking for a legible tag.

FEATURES OF HOME DEPOT GARDEN CLUB

The Home Depot Garden Club features loads of helpful information for gardeners.  Some is how-to and some inspirational.  It also features a searchable plant database to help you figure out what to plant where and how to care for your plants.

 

List of Restaurant Loyalty Programs – March 13, 2016

LoyaltyPulse Research Finds an Effective Restaurant Loyalty Rewards Program may increase Guest Visits by 35%
LoyaltyPulse Research Finds an Effective Restaurant Loyalty Rewards Program may increase Guest Visits by 35%

LIST OF RESTAURANT LOYALTY REWARDS PROGRAMS AS OF MARCH 13, 2016

Have we missed one? Let us know.

BJs Brewhouse Premier Rewards

Brenner’s Steakhouse Rewards

Bubba Gump Shrimp Co. Rewards

Cadillac Bar Rewards

California Tortilla Burrito Elito

Carmelo’s Rewards

Champps Americana MVP League

Charlie Brown’s Steakhouse Handshake Club

Chart House Rewards

Cheese Burger in Paradise Board Club

Copeland’s of New Orleans Lagniappe Club

Churchill’s Pub

Cosi CosiCard

Crave Loyalty

Dave and Busters Rewards

Davinci Group Frequent Diner Club

Dunkin’ Donuts

Del Frisco’s Steak House Rewards

Don Pablos Habeneros Club

Duffy’s Sports Grill MVP

El Pollo Loco My Loco Rewards

Erbert and Gerbert’s Sandwich Society

Farrelli’s Pizza Fire Club

Freebirds Fanatic Rewards

Gastronomy Frequent Diner

Genghis Grill Khan’s Reward Kard

Gordon Biersch Passport Rewards

Grotto Pizza Swirl Rewards

Hard Rock Rewards

HWY 55 Burgers

J.P. Licks Cow Card

Kabuki Japanese Restaurant Red Mask Club

Kings Family Restaurants Royal Rewards

Kobe Japanese Steakhouse Kobe Rewards

LaMotta’s Italian – Belly Rewards

Landry’s Seafood Rewards

Landry’s Select Club

Lettuce Entertain You Frequent Diner Club

Levy Restaurants

Louisville Originals

Max & Ermas Good Neighbor Rewards

Max Restaurant Group Max Vantage

McCormick & Schmicks Rewards

Mellow Mushroom Beer Club

MOGL

Morton’s The Steakhouse

My Loyal Family

Old Chicago World Beer Tour

Ox & Pen Chicago

Outback Steakhouse My Outback Rewards

P.F. Changs Warrior Rewards

Pacifica Seafood Rewards

Panera Bread My Panera

Papa Gino’s Rewards/D’Angelo’s Rewards

Papa Johns Papa Rewards

Parasole Restaurant Holdings Dining Club

Phillip’s Seafood Friend’s of Phillips

Pita Pit Pit Card

Pizza Ranch Rewards

Qdoba Rewards

Rain Forest Cafe Rewards

Red Mango Club Mango

Red Robin Red Royalty

Restaurant.com Rewards

Restaurants America Frequent Diner

Restaurants Unlimited Eat, Drink & Earn

Rewards Network

Rock Rewards

Ruby’s Diner Jitterbug Club

Rusty Pelican Rewards

Smokey Bones Bones Club

Specialty Restaurants Loyalty Club

My Starbucks Rewards

Stoney River Legendary Rewards

Sullivan’s Steakhouse Rewards

TGI Friday’s Gimme More Stripes

The Counter The List

The Palm 837 Club

Tumbleweed Tex Mex Grill My Tumble Bucks

Blaze Pizza Rewards












Blaze Pizza is all the rage because of the way the company has reinvented the process of ordering pizza. They’ve turned it into made to order fast casual allowing consumers to select each sauce and topping individually and have their hot, crispy and yummy pizza ready in less than five minutes.

Blaze also has an app-based rewards program, allowing members who download the app to earn “flames” every time they spend five dollars or more at a Blaze Pizza location. Once you’ve earned ten flames you’ll get a reward. The snag with this is that they don’t specifically describe what the reward is. And as far as I can tell, the only information about the program is in the app, not on the Blaze Pizza website.

I’ll find out once I get to ten flames. Because of the convenient nature of the Blaze concept and the really good pizza, it’s a viable lunch option that competitive with most other fast casual restaurant concepts and one of the few that offer tasty and fast pizza. So it doesn’t take long to get to ten flames.

Learn more about Blaze Pizza at the website. For more about the app and Blaze Pizza Rewards, check out the app on your smart phone.

Bartolotta Rewards












Over the last two decades, the Bartolotta Restaurants have created a great reputation by offering traditional Italian dishes using the freshest ingredients available.  The Bartolotta Rewards program recognizes customers loyalty by rewarding them one point for every dollar spent, translating to 10% back on all dining purchases!

PROGRAM DESCRIPTION FROM BARTOLOTTA’S WEBSITE

The Bartolotta Restaurants sets high standards for innovation and quality of cuisine to produce a memorable dining experience.  We know you have countless options when selecting a restaurant in Milwaukee, and we are so pleased when you choose to dine with us. 

Join our loyalty program by dining at any participating restaurant and ask your server about Bartolotta Rewards!  Your server will give you a card that you’ll need to register once you get home.  Plus, you’ll earn points for your purchase that day!  The Bartolotta Rewards program is free to join, and will award you 200 bonus points on your first purchase!

Earn one point for every dollar you spend on food and beverage at any of our participating restaurants.  For ever 250 points you accumulate, you earn a $25 Rewards certificate that we mail out after the end of each quarter.  That translates to 10% back on all food and beverage purchases when dining, hosting a private function or attending a special event.

More Perks! The primary account holder will receive a $25 birthday coupon to use during his or her birthday month.  At the beginning of each year, we’ll send you a coupon for $25 off a bottle of wine that is valid for the entire calendar year.

For more information visit the Bartolotta Restaurants website.

Cosi Card – Two Cards in One

Cosi II




The New Cosi Card is like two cards in one!  It is both a rewards card and a gift/stored valued card.  Just swipe your Così Card each visit and you’ll start earning freebies after just 10 purchases!  Cosi also introduces a Catering Rewards card to start accruing catering points.

FROM THE COSI CARD LOYALTY PROGRAM PAGE

The re-loadable reward-able way to enjoy Cosi.

Cosi Card loyalty program – It’s our way of saying thank you. Pick up a Così Card at any Cosi location then, swipe your Cosi Card each visit and after just 10 qualifying purchases you’ll earn your first meal or beverage on us. We will also be surprising you every so often with special treats.

Gift/Stored Value Card – Cosi Cards make the perfect gift – whether you’re treating yourself or surprising one of your Così loving friends, family members or employees. The Così Card makes it quick and easy to pay for Così cravings.

Cosi Catering Rewards – Now you can start earning your way to FREE sandwiches, salads and more with the NEW Così Catering Rewards Program. Simply use your Catering Rewards Card with each visit and you’re on your way to deliciousness.

For more information please visit the Cosi Card page on their website.

Beggars Pizza Rewards – Big Cheese Club












Beggars Pizza has been bringing great pizza and Italian food to Chicagoland for nearly 40 years. With a family atmosphere and a strong commitment to the local community, they  realized the importance of a loyalty program. In April 2014, Beggars Pizza launched its loyalty program, inviting guests to join the Big Cheese Club to earn rewards, free food and more!

PROGRAM DESCRIPTION FROM BEGGARS PIZZA WEBSITE

Join our Big Cheese Club to earn Rewards, Beggars Stuff, Free Food and More! Get 10 points for every dollar you spend. For every 1500 points, $10 in Beggars Bucks will be automatically added to your account which can be used towards any food/beverage purchase!*

We also celebrate your birthday & anniversaries with rewards! By just being a Big Cheese Loyalty Member you will earn bonus offers, Beggars Stuff and more!

For more information, visit the Rewards section on the Beggars Pizza website.

Join the Ranks of the Khan’s Rewards












By using your Khan’s Rewards card you will never leave empty handed.  You’ll receive 5 points for every $1 you spend.  At 350 points you can redeem a free dessert. At 750 points, you will receive a $10 reward. When you sign up you will receive a Free Shareable or Dessert special offer. Khan’s also offers birthday rewards, the more you visit Genghis the bigger the birthday surprise.

SOME BACKGROUND INFORMATION ON GENGHIS GRILL

Legend has it that during their conquests, Genghis Khan and his men grilled food on their shields over an open flame. In much the same way, our Grill Masters grill your combination of fresh ingredients and stir fry them to perfection on our sizzling hot grill. It’s a centuries-old tradition you can enjoy only at Genghis Grill – the Build Your Own Stir Fry.

Genghis Grill, the largest build your own stir-fry chain in the United States, is well known for its fresh, hot and healthy food, and for its style of fun service. Fans head over to the Fresh Market Bar where they are greeted with an array of more than 80 delicious, fresh ingredients from which they can build their own bowl. They then hand their bowl to our grill masters who cook their creation to perfection on a large, sizzling, circular grill.

The first Genghis Grill opened in 1998 in Dallas, TX. As of March 2014, there are 105 locations in 23 states nationwide.

For more information visit the Khan’s Rewards page on the Genghis Grill website.

Raising Cane’s – Caniac Club

Raisin Cane's




Did you know there is a club just for Caniacs? By joining the Raising Cane’s Caniac Club you’ll get free food, exclusive invites and gear – plus chances to win free tickets to local concerts and sporting events.  When you register your card online you will get a free box combo meal (no purchase required), and free food on your birthday.  Every time you make a purchase and swipe your card you are instantly entered to win big prizes.

ABOUT RAISING CANE’S RESTAURANTS

Raising Cane’s is a restaurant company that has ONE LOVE- quality chicken finger meals. Cane’s is known for its great crew, cool culture, and active community involvement.

Raising Cane’s was founded by Todd Graves in 1996 in Baton Rouge, LA.

Raising Cane’s vision is to grow restaurants all over the world and be the brand for quality chicken finger meals, a great crew, cool culture, and active community involvement.

CANIAC CLUB PROGRAM DESCRIPTION

The Caniac Club is a customer appreciation program that has been developed to provide our customers with special THANK YOU offers for being a member.  Throughout the year you will receive free food, fun news and more, just  for being a member.

4 Simple ways to become a Caniac Club member:

1. Simply visit our participating Raising Cane’s locations and ask a crew member for a Caniac Club Card.

2. Go to RaisingCanes.com on the web and click on the CANIAC CLUB page. You’re already SO close!

3. In the REGISTER YOUR NEW CARD area enter the card number located on the back of the card provided.

4. Follow the rest of the instructions and enjoy your Caniac Club privileges.

For more information please visit the Caniac Club page on the Raising Cane’s website.