How loyalty programs encourage repeat customers

As competition in the QSR and fast casual space continues to heat up – and consumers look for ways to cut back on their daily spending – marketing teams need to take a fresh look at their loyalty program offerings for 2023.

New loyalty solutions allow restaurant chains to better target their communications, create personal interactions and ultimately foster greater engagement with the brand. While the quality of menu items will always be a leading driver of customer satisfaction, a positive experience before, during and after the visit can boost brand affinity and increase the chances of repeat business, something everyone wants.

Here are four ways effective loyalty programs can help your QSR or fast casual restaurant stand out from competitors and keep your customers coming back time and again.

Personalize the rewards

Personalization is the foundation of the most successful loyalty programs. QSRs that integrate personalized messaging and brand communications, along with customized rewards and perks, deliver a more engaging experience than their competitors.

McDonald’s, for example, recently invited its followers across Facebook, Instagram and TikTok to sign up for an SMS marketing campaign that promised “a life-changing opportunity” through a personalized messaging approach. KBP Brands, a major KFC franchisee, began testing an SMS and mobile wallet program at more than 160 restaurants in five states in December with the goal of reaching customers instantly where they are: on their phones.

Providing a phone number, email or other personal information is a trade-off between the consumer and the brand. When the consumer believes he or she will receive value from membership in a rewards program, he or she will opt in and provide their information. Those details are useful for your marketing efforts and allow you to reach them in a personalized way. By properly tracking and securely maintaining customer data, you can tailor your program to meet your customers’ shopping expectations, and offer perks that reward loyalty membership.

Offer rewards that are truly rewarding

Unique program benefits like special promotions, discounts and early access are among the most highly desired loyalty perks for customers. Canadian coffeehouse Tim Hortons offers its members a variety of perks in addition to rewards points, including exclusive offers, skip-the-line access, surprises on your birthday and more.

QSRs can offer their program members exclusive promotions, opportunities to try new menu items early, or even free items or free delivery. The list goes on. These perks help foster exclusivity and a deeper connection with your customers, both of which help win loyalty.

The most successful loyalty programs are centered around customer engagement, as an engaged customer is more actively involved in the program from the time they earn rewards to the time they redeem them. This means that customers who are offered rewards they actually want are much more likely to participate in special events and promotions.

Freedom of choice goes beyond the menu

QSRs are discovering that giving consumers as much choice as possible leads to greater retention and engagement, and that includes the payment process. Restaurant chains that offer a range of payment options at checkout increase the likelihood of conversion and encourage repeat business.

More than half of QSR customers have paid with digital wallets during a recent transaction, according to recent data, which should come as welcome news to restaurant owners. Digital wallets provide fast, contactless payment functionality for the customer, keep lines moving and serve as a tool for driving loyalty.

Utilizing stored payment methods, coupons, currencies or other alternative payment options help increase customer interaction and create a positive experience beyond a simple transaction. By making payment more convenient, you are removing friction and providing another opportunity to create a positive interaction with your brand.

Provide your customers with more purchasing power

In the current economic climate in which inflation rates continue to hover at levels we haven’t seen in decades, QSRs should be thinking of ways to help customers unlock access to additional spending options.

Research shows consumers are increasingly leaning on loyalty programs as the cost of everything from gas to groceries continues to rise. A recent survey conducted by Dig Insights found that more than 60% of consumers surveyed are tapping into their rewards points to help manage rising costs. It makes sense: loyalty points are something consumers have readily available, making them an easy way to save some money.

Restaurants can harness technology within existing or newer loyalty programs to help customers easily redeem points, which can help mitigate ongoing price increases. The restaurant, in turn, can boost conversion rates and offset some of declining sales that come with prolonged periods of inflation.

As food prices continue to climb and more customers are rethinking how often they visit their favorite restaurants, QSR chains must think about the customer experience now more than ever.

Loyalty programs will help restaurants offer a more personalized dining experience, which leads to better customer engagement, more conversion opportunities and greater purchase volume — all of which support the bottom line. With the right programs in place, you can surprise and delight your customers in ways that will keep them coming back for more.