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Should Restaurants Rethink Their Loyalty Programs?

1 Mins read

Restaurant Business says data from loyalty provider Paytronix reveals that while loyalty programs are now more cost-effective to operate, they’re still typically pricier than regular discounting.

The new Paytronix Loyalty Report: 2023 says, “Many restaurants have made their loyalty programs less generous recently in response to increases in their own operating costs.”

Some food chains raised the amount consumers had to spend to get a reward. Others changed the level of discounts they had previously offered. Restaurant Business says, “Moves like those have apparently helped rein in the growth of loyalty costs, at least compared to regular discounting, which appears to be rising as restaurants try to attract inflation-weary consumers.”

According to Restaurant Business, the Paytronix Report shows that “while the average loyalty transaction still costs the restaurant about 9% more than a simple discount, those transactions can also yield additional benefits” for restaurants. “Loyalty members typically spend more per visit than non-members. Last year, the average loyalty check was 5% larger than the average non-loyalty check—a difference of 54 cents.”

The report also reveals that loyalty members dine at restaurants more often than the average guest. Paytronix reports that the “top 10% of loyalty members make up 44% of restaurant loyalty visits and about half of loyalty spend.”

Do you offer your customers a loyalty program? Many small independent restaurants don’t think it’s worth it. But, as the report shows, loyalty programs drive visits—in some cases, a lot more visits—to your restaurant.

And, of course, one of the biggest advantages of offering a loyalty membership to your diners is the data you can gather on their dining habits, making it easier to create marketing strategies that will resonate with them.  As Paytronix explains, “The knowledge of what a guest wants and when they want it, combined with a deep well of data, means that as guests change their relationships with brands, brands can change their offers to match.”

Loyalty stock image by julie deshaies/Shutterstock

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