Optimizing Restaurant Loyalty Programs with Mobile Engagement

Everyone needs to eat, yet a continual wave of challenges for the restaurant industry could certainly make one lose their appetite. According to the National Restaurant Association, 92% of restaurant operators say the cost of food is a significant issue for their business, and staffing was 3.6% below pre-pandemic levels at the beginning of 2023, i.e. 450,000 open jobs.  

But don’t get discouraged: the National Restaurant Association also found that 84% of guests say going out to eat with friends and family is a better use of their mealtime than cooking and cleaning up.

So with guests wanting enjoyable dining experiences coupled with a growing expectation that industry competition will be more intense this year than last, what’s the recipe for success? For restaurants looking for repeat diners and want them to dine more often, they need to invest in and optimize their loyalty programs.

When looking to optimize a loyalty program, start by examining the value guests derive from the program and how to orchestrate an elevated customer experience. Loyalty programs should make them feel special, valued, and included.

When guests feel valued it results in increased engagement and greater affinity for the restaurant when they earn rewards as part of a loyalty program. Over half of guests report loyalty programs being the key reason for choosing a specific brand – which is a big number compared to only 18% of diners who regularly stay with the same restaurant. In fact, one of the top reasons consumers switch brands is when they don’t feel like a business recognizes them as an individual or knows their personal interests.

Loyalty Program Impact on a Company's Bottom Line

Despite the aforementioned rising food prices, 10% of American consumer income is spent on food. Since as much as 20% of profits can come from loyalty programs, restaurants who make the investment in optimizing their loyalty program will save money in the long run. If this doesn't get your stomach rumbling then consider these stats:

• When executed correctly, new restaurant loyalty programs average 200% profitability after 18 months.

• Increasing customer retention by just 5% can increase a restaurant’s bottom line by as much as 95%.

• 77% of customers are willing to add more items to their cart in order to take advantage of their loyalty program benefits.

In order to most effectively execute a successful loyalty program, brands need to turn to mobile. Mobile channels including SMS, MMS, Mobile Wallet, and in-app Push are able to capture the broadest audience and effectively deliver personalized, relevant, and timely messaging to drive purchases, and they can instantly deliver points and rewards to drive repeat purchases and nurture brand loyalty. 

This is all possible because of how effectively these mobile channels can track customer behavior and interactions without facing any privacy repercussions. This is done by only collecting two types of data:

• Zero-party data: customer information that they voluntarily offer up to you as a means of receiving more relevant content, such as zip code, name, email address and other personal data (and recent research shows that more than 40% of consumers will share personal data about themselves with a brand if they think it will elevate their customer experience).

• First-party data: information that’s collected around how your customers engage with your brand, from the text messages they open to the post-click browsing they do on your website.

This leaves brands with a clear trail of breadcrumbs that can lead them down the path to deliver the most tailored experience to each of their customers.

This comprehensive guide shares the top 5 essential mobile activations that the restaurant industry needs in order to achieve high loyalty program engagement and ROI.

Now for the entrée. Savor these next five courses, each of which is a key ingredient to a well-executed loyalty program. Get a taste for how to optimize mobile for loyalty that increases guest engagement and improves ROI.

1) Utilize Mobile Wallet in addition to a mobile app.

32% of consumers - particularly ages 21-24 - say a brand’s app that’s too slow or hard to use is a top reason why they engage less frequently with a brand’s loyalty program. The most loyal consumer base drives most app installs, with the current rate for app downloads at just 4%. Mobile Wallet is a mobile channel that’s native to all mobile devices - no additional download required - that will help brands reach a broader audience that they’re still missing. For Vibes customers, more than half of their loyalty members install their loyalty card to their mobile wallet, but it does not deter from mobile app downloads. Using both mobile app and Mobile Wallet will generate high engagement across guests of all ages.

By making an investment in both a mobile app and Mobile Wallet, brands are able to regularly connect with a wide range of guest segments to drive greater action and see more bang for their buck with their loyalty program.

2) Make it personal.

Personalized, relevant messaging is key when it comes to effective guest engagement in loyalty programs.

On average, a consumer is a member of 14 loyalty programs but only active in 6 . Personalization can bridge the gap, separating effective loyalty programs from inactive ones. More than two out of five consumers say they are willing to give brands their personal information in order to have a more personalized customer experience. Yet many of them - particularly those over age 40 - say brands are not personalizing interactions enough. The question, then, is not if brands should be collecting consumer data or not but rather how to best collect and use the data to deliver a personalized experience.

From using first name in a text message about an order status, to delivering real-time point balances on a mobile wallet loyalty card, delivering a targeted promotion for a member’s favorite meal, or deploying interactive mobile wallet punch cards rewarding guests for their next purchase, the opportunities to personalize interactions on mobile are endless. Each mobile engagement is a touchpoint along the guest journey that helps build brand loyalty faster.

3) Optimize text messages by send time.

About 78% of U.S. consumers say that texting is the primary activity they do on their phones in a given day, a higher percentage than other daily activities such as checking social media, consuming content, using email, and making phone calls. However, a poorly timed text message from a brand they love may not only disrupt their day, it may also result in them no longer wanting to hear from that brand again.

To effectively use the immediacy of mobile messaging, restaurants can set a text message to automatically deploy within 3 hours before a mealtime local to their SMS subscriber’s time zone to capture interest at everyone’s appropriate decision times. Then, brands can send personalized rewards to deepen interest, drive more visits, and increase revenue. Peak times to consider include between 8:00-9:00 a.m. for coffee runs before a morning meeting, between 11 a.m.-Noon for lunch time rushes, and between 4:00-6:00 p.m. for convenient weeknight dinners to pickup or get delivered. 

Since text messages are opened within the first 90 seconds, on average, compared to emails that are opened 90 minutes after initial send, mobile will help restaurants break through the noise and effectively reach their customers before it’s too late.

4) Update rewards points in real time.

What motivates members to engage more in loyalty programs is not just personalized benefits and rewards, but also ones they don’t have to jump through hoops in order to get. In fact, 61% of consumers worldwide would use their rewards more if they were applied automatically and more than half would use them more if they could more easily track their points.

Mobile wallet passes are completely dynamic, meaning all of the real estate on the pass can be updated at any time, as often as a brand desires, and in real time.

By having the ability to update the content on saved mobile wallet passes with new information at any time, restaurants can keep their members up to date on their earned points or rewards, status level, and member-exclusive offers and benefits. Members will quickly learn that they can count on their mobile wallet loyalty card to always reflect their most current account details and that they can easily access it right on their phone without repeated logins and cumbersome searches through an email or app inbox required.

​​It’s not hard to see how this tactic will help boost loyalty program engagement – rewards are tangible outputs of value and inclusion, helping to boost consumer sentiment.

5) Make their mouths water with MMS visuals and gifs.

Everyone’s a little bit visual, so imagery can play a vital part in enticing guests to eat at a restaurant. 45% of U.S. restaurant goers said they actively seek out food photos on restaurant websites, so imagine what it can do for the customer experience if the visuals came to them directly on their phone. 52% of consumers say that half or more of their purchases are influenced by convenience, so taking the work off the guest’s shoulders and delivering them the visuals they need to make a decision on where to eat will be a no brainer.

Check, Please!

Through this delicious meal, brands can take away how to build long-lasting loyalty by meeting their customers where they are, on their mobile devices. Mobilizing loyalty programs with Mobile Wallet, SMS, and MMS engages customers through personalized, timely, and relevant messaging to increase sales and customer retention. Get in touch with Vibes today to learn more about how we can help you take your business to the next level.