How to Develop a Restaurant Loyalty Rewards Program


We follow a proven eight-step process to develop a loyalty program for your brand with significant input from your customers.


It’s important to ensure that everyone involved in your loyalty program development process is on the same page in terms of the expectations for the program.  Well designed and effectively run program generate incremental visits both from the program itself and from the targeted marketing efforts you conduct by leveraging the rich data derived from the program.  Objectives should include:

  • Generate short-term incremental visits from guests through the program and targeted marketing efforts using the data.
  • Improve long-term customer retention, thereby increasing customer lifetime value.  By improving retention, you have a stronger base to build upon with your new customer acquisition efforts.
  • Derive strategic customer information by gathering detailed customer transaction data over long periods of time.


We conduct quantitative research via e-mail to get input from your customers.  In the research phase we explore the potential benefits that are most appealing to your customers.  We also explore how often they visit your locations along with how often they visit your competitors.  The end result is insight about what motivates your customers and a snapshot of your current share of customer (very helpful in quantifying the opportunity).


We develop a concept for your program, defining how it might work so that we can have a clear enough picture to conduct in-depth financial analysis. The concept includes a definition of things such as:

  • The core value proposition – what value does the member receive when he/she participates?
  • The enrollment process – how does the customer become a member and how is the customer’s basic contact information captured?
  • What other benefits might the member receive such as a welcome reward, a birthday reward, an anniversary reward?
  • A broad definition of the behind-the-scenes communications tactics that leverage the transaction-level data to drive incremental revenue.


We investigate and recommend the best technology solution to support your loyalty program as seamlessly as possible.


We develop financial projections that include the anticipated costs of the program and various levels of incremental sales and gross profit that the program will generate. This becomes the business case that proves the viability of a program in your company and provides you with enough information to make an informed business decision about whether or not to proceed with a loyalty program for your company.


We brainstorm a long list of potential program names, a short list we think most appropriate along with their rationale and recommendations for finalists.  There are many characteristics we consider when identifying and evaluating potential names to ensure they’re relevant to your brand and make sense to the customer.


We develop the program rules (terms and conditions), an outline of operational considerations, a list of potential marketing programs within the loyalty program that leverage data to drive incremental revenue, methods of evaluating the program’s effectiveness and steps toward an initial pilot.


We recommend a pilot market or location.   The pilot is used principally to identify operational and communications issues that need to be fine-tuned prior to rollout.