Originally published on barandrestaurant.com | Click here to see the article
How many wrinkled, neglected punch cards do you have stashed away in your wallet? Or perhaps the old punch card was replaced with a plastic card touting “VIP” benefits? Either way, forget those cards (which I imagine you already have since, let’s be honest, who actually keeps up with them?). With today’s technological advances and improved insight on customer preferences, bars can now take a modernized approach to customer loyalty that transcends the outdated one-size-fits-all approach that costs a bar its customers and ultimately revenue.
But first let’s agree: A loyalty program is not about giving stuff away; if it were, you would just put food on a table in the street. Your loyalty program is about rewarding those customers that spend money and encouraging all customers to spend more money by modifying their behavior in various ways.
With the right loyalty program, your bar can take advantage of technology in these four ways.
1. A Modern Loyalty Program Starts with Segmentation and Targeting
Leaving behind a one-size-fits-all approach to customer loyalty starts with acquiring customer data. This data enables a bar to segment its customers based on not only demographics, but preferences and behavior patterns. Thanks to innovation, bars now have access to technology that provides easy data acquisition and tracking.
For example, a bar can utilize a hotspot to provide free WiFi to customers in return for sharing their data—which is more straightforward than it sounds since 83% of consumers are willing to share their data to create a more personalized experience, according to research by Accenture. When a bar has access to this data, it can track what days and times the customer visits, how often, and it can even be connected to the POS system to track their purchasing patterns.
That old punch card where the customer buys eight beers to get one free that’s long forgotten in the back of a wallet? It’s no longer needed thanks to WiFi marketing technology. You can look at your dashboard and understand the behaviors of your customers at any time, instantly identifying patterns and, even more importantly, based on these patterns, provide highly targeted messaging to individual customers.
Imagine ten customers walking in at the same time; now that you know their individual behaviors, the system will deliver a different, highly valuable offer based on their specific behavior. And even more exciting, since you have the person’s phone number, you can now send SMS (text messages) of those unique offers directly to their phone as they enter the bar.
Here’s how this modernized approach increases revenue:
We know that a loyal, repeat customer is more valuable than a one-time customer. By segmenting and targeting customers, the loyal customers are rewarded while the “lost” customers are encouraged to return. So the loyal customer that comes every Tuesday evening but always leaves by 6:30 after enjoying the great drink specials during happy hour is instantly texted, “Tonight you get a BOGO entree after 8pm.” While the customer who hasn’t returned in 30 days can receive a message encouraging him or her to return and providing an offer for, “$2 pints on your NEXT visit this week.”
This approach to loyalty incentives encourages repeat customers to not only continue returning but expand their typical sale by trying a higher-dollar menu item. It also brings back lost customers.
2. Give Customers What They Want
Customers now desire personalization and engagement with loyalty programs, and a bar effectively engaging with customers creates not only loyal customers but brand advocates. After all, 82% of customers feel more positive about a brand after engaging with personalized content—but more importantly, the alternative consequence is the lack of personalization can lead to negative sentiment. 42% of customers are actually annoyed when content isn’t personalized, according to Demand Metric.
Decades ago, personalizing a loyalty program was a tough task, but with modern technology and the ability to segment, personalization is straightforward, if you have the right platform (author’s smile). Think about it from the customers’ perspective and how frustrating it is to receive marketing messages that don’t even apply to you. You’ve probably
immediately thrown direct mail pieces for services that are irrelevant in the trash. A person who loves creative cocktails but doesn’t have a palate for beer is not going to love receiving an offer for $2 Pint Night. However, this person would probably be excited to find out his or her penchant for the latest trending martini flavor is acknowledged with a discount on your newly-introduced Martini Monday special.
Personalization can be taken a step further through social media. Now that you’ve pinpointed the martini-loving customers, a social media post can be delivered to them via SMS promoting the latest martini special and Martini Monday. The customer, who sees an enticing apple and elderflower martini for only $5, then shares it to his or her own Facebook feed. That loyal customer has now become not just loyal, but a brand advocate. Brand advocates are valuable customers to have since they find delight in your bar and want to engage and share it with others.
3. Communicating at the Right Place and Moment
While personalization is important when it comes to relevance, so is timing. Receiving a message at the right place and time to make a purchase decision is a driving force in revenue generation. For example, if your entree sales are down, a customer who only ever orders beer is more likely to add on an entree when receiving the offer while already in your bar than at home. So the ability to send an SMS the second someone walks into your establishment is extremely beneficial.
This also holds true for social media. For example, if you are trying to drive more social media followers, then the call-to-action for a like and to follow your bar on social media will be reacted to more positively when the customer is at the bar and enjoying the break from their day, versus someone currently schlepping through the grocery store with three young children.
4. Multiple Technologies are Better Than One
Antiquated loyalty programs operate in a silo utilizing one tactic or channel. In today’s digital world, multiple marketing tactics can be integrated to broaden the reach and impact of messaging to achieve optimal results and better ROI. Research has shown that integrated marketing campaigns outperform a single channel by a whopping 300%. Instead of reaching customers only through SMS, for example, integrating social media, email, and digital signage strengthens loyalty. Here’s an instance of how this can be accomplished:
Say that you’re looking to increase the number of participants in your bar’s loyalty program. Yesterday’s technology was to have a Facebook icon and a QR code with “follow us.” With WiFi loyalty, this is dramatically improved upon. A small coffee shop went from having acquired 600 followers in 3 years to 1,800 followers in 3 months after implementing WiFi loyalty.
But even these outstanding results can be improved upon. Imagine being able to promote a consistent and powerful loyalty program message through not just SMS, but social media and your digital signage that all ties back to one sign-up form. In the case of a Mellow Mushroom franchise in Central Florida, integrated marketing enabled them to increase their loyalty program by subscriber count by 35% year-over-year, but it also enabled focused growth campaigns. For example, the franchise ran an SMS contest leveraging social media, SMS, and digital signage. Customers used a keyword to enter a chance to win a tailgate package with two football game tickets. The immersive campaign was a huge success and led to over 1,000 new Loyalty Program members in less than a month, increasing purchases and social media engagement.
In summary, in order to retain customers, bars need to keep antiquated loyalty programs where they belong—in the past or buried in the customer’s wallet—and instead utilize the advantages of today’s marketing technology. When it comes to turning customers into not just loyal customers but brand advocates, targeted, personalized, integrated marketing will always trump a one-size-fits-all approach.
Originally published in Bar And Restaurant magazine
by Stephen Gould, CogoBuzz CEO/Founder