Points based on bill totals – do they tease customers or are they a useful tool?
Did you know that in most cases a well-thought-out loyalty programme based on accrued bonus points pays off better than discount giveaways?
In today’s challenging economic conditions, middle class restaurants are struggling to stay afloat. Some have had to reduce employee benefits and change their suppliers to maintain sales levels. Others are taking a different path and choosing to invest instead of tightening their belts – these venues have channelled all available funds into advertising and implementing loyalty programmes. When every discount card issued can mean future losses in profits, business professionals start thinking more carefully about how their investments in promotions will bring returns.
When you calculate potentially lost profit, you can see that a 10% discount on a £100 bill means your revenue falls short by £10 in cash. If a venue uses a bonus program, the restaurateur does not lose anything when the bill is paid. Instead, the customer is given an opportunity to spend more money in the same venue when he or she comes again. Once the guests accrued enough bonus points, they can exchange these points for a dish from the menu. The cost to the restaurateur for this item (i.e. self cost) is much lower than its price for the customer (selling price). For example, if 10 points equal 10 pounds, does this mean that the restaurant loses all of them when the client decides to spend his or her points? Of course not. When the restaurant gives away a dessert for 10 points (pounds), it is actually only giving away 3 pounds—its cost price. This way, the venue gains much more than it loses. In a typical case, a bonus loyalty programme with a calculated payback gives you:
Make sure that guests see their accrued points on the bill so that they have an incentive to come back
Restaurateurs who use Tillypad XL know that this system allows you to print current point balances on bills. You have to admit that this not only saves time for a waiter who might otherwise be asked to check a balance, but also reminds your guest about their active participation in your loyalty programmes. When guests learn that they have already earned points, they will most likely come back again to earn even more or to spend them.
Depending on the goals of your loyalty programmes, you can opt for different points-earning schemes. You can decide which categories of customers will be able to partake in promotions, which menu items will generate points, and what, if any, payment method restrictions will be in place. You also determine your own bonus percentages and point validity periods.
Give your clients a choice of which treat to receive, and motivate them to actively participate in your promotions — soon you will see how your restaurant sales begin to grow.