Restaurant customers are expressing their loyalty like never ever before which is a good thing for foodservice operators as 5% to 17% of total restaurant revenue is driven by the most loyal 2% to 3% of customers.
Those are findings from the Paytronix annual Loyalty Report 2022 which also revealed 55% of restaurants report loyalty check sizes have increased more than the price of their items and there is a generational shift under way with Millennials and Gen Z consumers picking up slack from the Boomer customer demographic, according to a press release.
Key report highlights include:
- In 2021, loyalty spending hit the highest level on record, demonstrating that even with rising inflation, loyalty programs are a valuable source of revenue. Casual dining, fast-casual, ice cream/snack/coffee and Mexican/sandwich concepts all saw the highest annual spend per guest of any year for which Paytronix has data.
- Top loyalty guests overwhelmingly represent the highest spenders and the most frequent visitors, and they offer a lifeline during an economic downturn. At convenience stores, the top 8% to 10% of loyalty members visit an average of 32 times a month — more than once a day — and four times as often as the next highest tier.
- Millennials (36-55 age range) have an outsized percentage of spend, while the Baby Boomers (56-plus segment) have an outsized percentage of visits. The largest untapped potential lies with Gen Z, (16-35 age range), as this group has the most guests who neither visit nor spend. Both the growth in spend for Millennials and the shrinkage in spend for Baby Boomers indicate that Millennials are the future of loyalty programs.
- The spend per check for convenience store loyalty members increased by about 25% last year, and much of it can be attributed to price increases in both fuel and in-store items. While the spend per check increased approximately 25% from 2020 to 2021, the annual spend for convenience store loyalty members increased nearly 40%. Fuel purchasers were paying more per gallon and visiting more often.
“The Paytronix Annual Loyalty Report shows that the potential of loyalty to build relationships between customers and their favorite brands has never been greater. Between the ongoing generational shift and the critical importance of the top tier of 2-3% of guests, it has become increasingly clear that growing cadres of loyal customers are vital for the health of brands. And the loyalty members of convenience stores who visit daily show the potential of loyalty customers to visit more often,” Lee Barnes, chief data officer, Paytronix Systems Inc., said in the release.