Day 3 - From the National Restaurant Association - State of the Loyalty Industry

The State of The Industry – questions from the audience for the Givex Loyalty Panel at the National Restaurant Association. I thought this would provide insight into some of the questions restaurants are asking about loyalty and engagement marketing programs.

1. Are you using data from your loyalty program to enhance the customer experience at the Point of Sale?
a. Response one from panel participant who has a large coalition program: No
b. Response two from a restaurant considering a loyalty program: They use customer feedback, but it is not integrated into the POS

2. How much time should you spend on your loyalty program development and continued support if you are a small chain (2 locations)
a. Response one from panel participant who has a large coalition program: You should allocate ¼ of an FTE for program development and administration

3. For a small regional restaurant chain, how do you address the logistic challenges? How do you get them to enlist?
a. Response one from panel participant who has a 20 location loyalty program: Servers, wait staff, and front line people are the best way to accomplish that. Yet you need a detailed training program to make sure they understand the program, and the objectives / value proposition.

4. A medium sized restaurant asked, “Margins are low (12-13%) in my restaurant, and I have heard the mention of 10% reward payouts and discounts, is that an effective discount? Is it still profitable?”
a. Response one from panel participant who has a 20 location loyalty program: Yes, our program is very profitable. We look at total spend, lift and change in spend patterns.
b. Response two from a restaurant considering a loyalty program: They have a 2% current cost for customer solicitation and they are themselves trying to figure out if a 10% reward make sense
c. Response from Loyalty 360: Consider all soft and hard benefits of the programs. There is no set threshold for rewards, make sure you engage and listen to you customer to make sure you develop and continually monitor the program to make sure it is engaging in the manner that the customer need/want. Always consider the perceived value of the reward and the ability to drive behavior.

5. Do loyalty programs provide a return?
a. Response one from panel participant who has a 20 location loyalty program: Yes, our program is very profitable. Yet ongoing maintenance is very important.
b. Response from Loyalty 360: Absolutely, yet programs cannot be developed and rolled out in a vacuum. They need to be pro-actively monitors with the end user in mind.

6. There is a concern about the proliferation of cards and getting someone to card “one more card.” Are there different methods (credit card, alternative technologies) by which you can identify them.
a. Response one from panel participant who has a 20 location loyalty program: Yes there are several “new” technologies, but they may not drive the behavior, not integrate with your systems. It was mentioned that Givex has several of these technologies that are integrated into their loyalty offering.

7. The final question was around the percentage of sales that come from a membership program, as well as when sales fluctuate (up or down) in total, how do the sales of the loyalty program participants change?
a. Response one from panel participant who has a large coalition program: He would not give the percentage of sales from the loyalty program, but he said when same store sales are up, the loyalty program participants are up more, and when same store sales are down, the loyalty program participants are down, but by not as much.
b. Response two from panel participant who has a 20 location loyalty program: 70% of their sales come from their loyalty program members, it was quoted by the CEO last fall and he was free to divulge the information. They loyalty program, its database and information base are integral in all of their marketing initiatives.