Updated 3/15/2022: Menufy has migrated from digital marketing management to HungerRush 360 Marketing.

Restaurants are increasingly turning to loyalty programs to encourage sales, particularly amid a pandemic-induced economic upheaval, when diners overwhelmingly choose to eat at home rather than dine out.

You might however be wondering if it’s worth the hassle. After all, you'll have to find a program, figure out which rewards to offer, and maybe even print cards or develop an app.  

Is it worth the time investment, or are diner loyalty programs just another marketing gimmick that will cost your restaurant money in the long run? 

Loyalty Programs Offer a Better ROI than Coupons 

Coupons attract deal seekers. They may have never heard about your restaurant or have no intention of coming back—they are just there for a good deal. That is why programs like Groupon can be problematic, especially for small restaurants. 

Loyalty programs, such as a simple punch card or an app-based offering, target people who have already come to your restaurant and encourage them to return. For example, Menufy’s Tasty Rewards program rewards customers with a free meal after ten orders at the same restaurant, where the eleventh meal credit is worth the average of the previous ten orders.

It’s far more cost-effective to keep a customer than it is to bring new ones through your door. In fact, a loyalty program often provides a better ROI than most other marketing strategies because it targets your customers, not potential customers.

Loyalty Programs Reward Repeat Customers 

Customers want to feel special. They want to feel appreciated. They want a relationship with your brand and not just to feel like another transaction. Loyalty programs let them into an exclusive club and help them feel more connected to your brand. 

That connection is valuable—and priceless. 

When an occasional customer gets an app notification that they have a BOGO box combo or a free fountain drink, they are more likely to return and spend money at your store. 

A coupon attracts people to try your food, while a loyalty program rewards customers for coming in your door over and over again. It may also encourage them to tell their friends, family, or colleagues about your restaurant.

In addition, return customers tend to be more profitable. A study found that loyal customers typically spend more than first-time customers. 

Allows You To Connect Directly With Customers 

Most marketing strategies focus on connecting with customers (or prospective customers) by casting a wide net. Social media, radio, or even billboards are all about reaching as many people as possible.

While a larger reach can increase brand awareness, it doesn't help you build an actual relationship with your customers.

A loyalty program often requires an email or phone number to sign up, which provides a direct means of communicating with your customers. With Menufy, restaurateurs have free access to their customer contacts that opted-in to receive marketing communications. Restaurant operators can directly market to their customers in-house or through Menufy’s premium digital marketing service, HungerRush 360 Marketing.

Reach your most valuable customers with special offers, deals, or other promotional materials. Unlike social media or paid ads, you own that connection.

Loyalty Programs Can Offer Personalized Offers 

Think about the last coupon you saw—maybe it was for a free appetizer or 10% off your next $50 order. What about customers who never order appetizers or tend to spend less than $50? 

Those customers are left out.

With a loyalty program, however, you can create personalized offers based on actions customers take in your store. If they order pizza every Friday but haven't come for the last two weeks, for example, you can offer a discount on a pizza to attract them back.

Personalizing the experience can improve customer response and, ultimately, drive more sales. 

Final Thoughts 

There’s a multitude of loyalty program options, including old-fashioned punch cards, swipe cards, and now apps. Regardless of which approach you take, your loyalty program will help you attract and retain repeat customers. 

Those repeat customers are the lifeblood of any restaurant, and could serve as ambassadors for your brand. A loyalty program keeps those customers coming back and happy with the deals they receive at your restaurant.