Loyalty programmes: get guests to come back

Choose one goal and one reward

Do you want new guests to return? Or do you want more visits during quiet periods?

Membership numbers alone do not show whether you are succeeding.

For example, you could try offering one specific extra on the next purchase after five purchases. Decide which purchases count.

State which items the reward applies to and what happens if a purchase is refunded.

This is a suggestion for a test. It does not describe the features of any particular system.

Calculate the cost of the reward

In this hypothetical example, providing an extra costs NOK 8. This includes ingredients, packaging and the additional labour.

Guests have earned 40 rewards in total. They have used 25 of them.

The cost of these is 25 × 8 = NOK 200.

That leaves 40 − 25 = 15 unused rewards. Depending on how the programme works, these may create a cost later.

The NOK 200 is therefore not necessarily the full cost.

Also include the cost of the system, running the programme and messaging guests. A guest who would otherwise have bought the extra may now receive it as a reward.

The restaurant may then lose money it would otherwise have retained from that sale.

Neither the price the guest normally pays nor the ingredients alone show the full cost.

Make the rules easy to explain

Clarify these points before guests sign up:

• What must the guest buy to earn the reward? Where can they see their progress?
• What does the guest receive? When can the reward be used? Can it be combined with other offers?
• What happens if a purchase is cancelled or refunded in full or in part? What do you do if the item is sold out?
• Does the reward apply in the restaurant, online or both? Ask to see how it works in each place.
• Who corrects mistakes when purchases or rewards are recorded incorrectly? Where can employees find a short explanation?

See who comes back

For example, track guests who made their first qualifying purchase in the same week. Count how many return within 30 days of that first purchase.

Do not compare groups until everyone has had the same amount of time to return.

See when guests use the reward and what the rewards cost in total. Also calculate what is left after costs for each visit.

Remember to distinguish this from profit after all fixed costs.

Some members would visit often anyway. Compare with the period before the test.

Note promotions and other changes that may explain why guests return.

Start with a small test

Try one reward for a limited period. Review the results with the staff working at the till.

See whether guests understand the programme, whether you can afford the cost and whether return visits leave money after costs. Clarify how customer information and messages will be handled before you start.