Our hospitality venues have re-opened, Central London is busy again, and although the pandemic is far from over, we’re now fully ‘living with Covid’. Bars, restaurants, cafés, and pubs are dealing with a number of challenges: lack of staff, supply chain issues and rising costs. But somehow, they must also tackle another key issue: customer loyalty. How can restaurants create experiences that have customers coming back for more? And why is it so crucial now?
Consumer behaviour has changed
Consumers have become used to using third party delivery services like Deliveroo and Uber Eats, breaking their direct link with restaurants. Many office workers are spending more time at home and have lost the habit of going out for lunch or stopping off for dinner before they leave town. People think more carefully about coming into urban areas. Some, particularly older customers, are still cautious about eating out at all.
Restaurants need to focus on customer relationships in this new normal. With budgets tight they need to make the best use of their resources, particularly customer data. They need to encourage new habits, whether it’s dining out, buying DIY meal kits or organising lunch with colleagues on the day when everyone’s in the office. And they must ensure that customers who are still not comfortable visiting shared spaces feel valued and have easy opportunities to interact with the brand.
Loyal customers are more valuable
A survey by PYMENTS found that loyal customers spend 67% more on average than new customers, and that loyalty programmes boost food orders by 39%. These would be compelling figures in normal times, but especially now. It costs five times as much to acquire a new customer than maintain an existing one. After being shuttered for so many months, restaurants need to be doing everything in their power to increase margins.
So how do you start creating loyalty?
Restaurants need to begin by getting the basics right. Customers want straightforward, consistent, frictionless experiences that feel true to the brand, whether they are making a booking, coming into the premises, or ordering a direct delivery.
These experiences should be personalised to each individual customer. This means making smart use of data gleaned from as many different channels as possible. The last couple of years have demonstrated how quickly things can change, so providing clear information on the latest news from the restaurant as well as reassurance on hygiene and safety is also important right now.
Customers value brands with purpose
It’s heartening to know that loyalty isn’t only built on discounts and deals. In 2020 a global study found that consumers are four to six times more likely to buy from, trust, champion, and defend companies with a strong purpose, with the UK scoring particularly highly.
That ‘purpose’ was made up of eight key attributes: fair treatment of all employees, products or services that reflect the needs of people today, ethical and sustainable business practices, support for important social causes, creation of new job opportunities, diverse and inclusive culture, issue advocacy and a strong set of values.
As well as having a positive impact in practical terms, this sense of purpose also helps drive consumers towards having an emotional connection with the brand. This not only drives loyalty but increases spending too. Food businesses that get involved in things like recycling and charity initiatives will be valued for living their purpose and bringing a sense of wellbeing and community to both customers and staff.
Getting to know customers through an app
If budgets allow, creating an app that allows customers to order, make reservations, be part of a community and perhaps earn rewards is a logical solution to the need to drive loyalty. By funnelling interactions through an app, restaurants can gain access to a vast quantity of data and gain a much deeper understanding of customer behaviour.
These insights can be used to give each individual customer a personalised experience. It could be remembering favourite menu items, recommending new dishes based on ordering history or giving the most engaged customers access to ‘secret’ dishes. Today’s consumers expect a high level of personalisation. 91% say they are more likely to shop with brands that provide offers and recommendations that are relevant to them.
An app could also help restaurants hang on to the digital customers they gained during the pandemic, perhaps through new offerings like DIY meal kits, or their own direct ordering system if they have one.
Loyalty schemes need to be simple, intuitive, and accessible via mobile, these are given. But what works for one brand’s loyalty programme may not work for another. Experiences need to stay true to the brand, and the tactics used by the fast-food giants – many of whom have set up loyalty schemes in the last couple of years – won’t be appropriate to businesses centred around healthy eating or fine dining. Campaigns that encourage sustainability or involvement in the local community might be a better reflection of some brands than complicated tiered reward systems or 10% off your next purchase.
No one has quite cracked restaurant loyalty programmes yet
UK restaurant loyalty apps do exist, but it seems they’re not providing the best experiences. Users of Pizza Express and Ping Pong’s apps complain about glitchy ordering and reservation systems, leading to some to abandon them. Meanwhile Wahaca ‘moved away’ from their original app, saying on Twitter that it wasn’t performing as they wanted. It seems that UK restaurant brands haven’t quite cracked loyalty apps yet, and there’s plenty of room for competitors to come in with new offerings.
Restaurants need loyal staff too
Let’s not forget about employees. With 134,000 vacancies in the UK hospitality industry it’s never been more important to attract and keep staff. Having a company culture and staff programme that inspires loyalty and makes people want to stay, could make all the difference. Loyal staff are more productive, need less training, have a positive impact on the restaurant experience, and on profitability. They’re every bit as important as the customers.
Loyalty works both ways
Marketeers often think of loyalty as being a one-way street: how can we persuade people to be loyal to the business? But above all else it’s important to remember that it works both ways. Consumers want to feel that brands are loyal to them: by providing value for money, creating meaningful experiences, offering good customer service, and treating them as individuals.
Really, it’s like any other relationship: you get out what you put in. And in the post-pandemic era, with all food businesses trying to find their place in our new normal, loyalty is the most precious commodity of all.