restaurant loyalty

Latent Loyalty: How Restaurants can Improve Customer Retention and Profits through a Digital-First Loyalty Program

Today’s customers are strongly influenced in their shopping decisions by loyalty programs, incentives, and personalized promotions, yet many restaurants and quick-service restaurants (QSRs) have not fully utilized these tools. 1 As a result, they are missing out on repeat business that drives growth.2

The good news is it’s not too late. With just 22 percent of customers satisfied with the level of personalization in their loyalty programs,3 there is a tremendous opportunity to increase customer loyalty and the bottom line.

Lead with loyalty

If restaurant patrons are anything like the 60 percent of U.S. grocery store loyalty program members who say that their program’s financial incentives influence where they shop and how much they spend, 4 then restaurants have a huge untapped opportunity before them.

Restaurants first need to be able to recognize customers by offering them personalized experiences, privileges and promotions that will help them feel valued and create new ways to pay. Ways to do this include:

  • Optimal delivery – Offer a discount code when customers download your mobile app, sign up for an account, or make their first purchase.
  • Gamification – Create a fun, gamified experience to gather and manage points or rewards.
  • Personalization – Provide personalized or exclusive content and offers.
  • Predictive modeling – Use predictive modeling to incentivize new and lapsed customers differently than regular customers.
  • One-click checkout – Create new ways to pay, including methods, channels and form factors.
  • Mobile app – Include convenience features like scan and go, order ahead and pay at pickup.

What do all the above have in common? They require digital execution.

Executing a seamless digital-first loyalty program

Developing an effective loyalty program and integrating it with customer relationship management (CRM) systems, customer apps and payment platforms will often involve working with multiple technology partners. QSRs and other restaurants should look for partners that have strong strategic alliances and integration capabilities, as well as experience and expertise in supporting QSRs and other restaurants.

For example, recognizing the convenience of stored payment credentials is a great way for a restaurant brand to connect the customer to its loyalty program. Through this connection, the restaurant can identify its loyal customers and provide them with a seamless payment flow based on tokenization techniques that replace a customer’s sensitive account data with a unique identifier and a digital token and is then stored in data centers.5

This means customers don’t have to worry about their account details being vulnerable online, and businesses don’t have to worry about keeping sensitive data safe in their environment. It gives customers the best of both worlds: payment security and a great checkout experience. Higher acceptance rates and fewer declines also mean restaurants can benefit from a lift in revenue.

Payments and other digital aspects of a loyalty program must be carefully planned with an experienced partner that can connect all digital aspects to your in-store experience no matter how the customers want to pay.

Keeping customers on board

Unfortunately, most restaurants and QSRs don’t have a clear picture of how to engage customers after initial onboarding. Restaurants need a 360-degree view of their customers that only a sophisticated token management service (TMS) can offer, allowing them to recognize their customers across all their interactions, no matter what payment method, channel or device they use, nor how often they switch between them. 6This TMS partner can also help you spot the increasing threat of loyalty program fraud, which can drain a good customer’s rewards.

Grow with the right partner

Well-managed customer loyalty programs can power growth for quick-service restaurants (QSRs) and other restaurants by driving repeat business and influencing consumers to spend more, more often. 7 Choose the right partner to help you manage a loyalty program that will streamline your efforts while increasing customer satisfaction and financial success.

1. Cybersource+ industries, Food Experience Edition 2021, p. 5,

2. “Powering Restaurant Growth Through Customer Loyalty Programs,” 2/22/22.

3. Apgar, Don. “How Payments Can Drive Better Loyalty and Rewards Programs,” Mercator, April 2022.

4. “What Consumers Expect From Their Grocery Shopping Experiences,”, August 2021.

5. “Powering Restaurant Growth Through Customer Loyalty Programs,” 2/22/22.

6. Cybersource+ industries, Food Experience Edition 2021, p. 10.

7. “Powering Restaurant Growth Through Customer Loyalty Programs,” 2/22/22.

This article originally appeared in Restaurant Dive.

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