6 must-haves for your restaurant's loyalty program

Over half of all restaurant customers use loyalty programs, making them one of the most effective ways for brands to increase traffic and profitability. Guests, for example, typically join an average of 3.6 restaurant loyalty programs, and Gen Z adults lead the pack, averaging 4.4, according to the National Restaurant Association's 2024 State of the Restaurant Industry. Having a loyalty program, however, isn't helpful lacking in three areas, according to Clutch Coffee Bar co-founder Darren Spicer, whose loyalty platform has achieved 84% loyalty participation rate thanks to its:

• Ease of use for customers and the company.
• Consistent, engaging offers/new products.
• Heavy adoption by customer base driven by employees actively promoting.

"We believe that by offering an incredible experience, premium drinks and incredibly fast service, customers have come to count on us and remain loyal once they try Clutch for the first time," he told FastCasual. "We also make our Rewards easy to use (signup only requires a phone #), and we are consistent with providing offers (a 'reason') to continue to engage and utilize our rewards platform."

Having a loyalty program, however, isn't helpful lacking in three areas, according to Clutch Coffee Bar co-founder Darren Spicer.

Mooyah Burgers Fries & Shakes' app, which has over 600,000 loyalty program members ordering from nearly 80 locations, takes a similar approach to Clutch Coffee.

"While we offer customers that chance to earn points, our loyalty platform is more than just the free food," Mooyah president Doug Willmarth told FastCasual. "As a marketing tool, we use the platform to increase visit frequency and create more brand affinity with our target audiences. We provide a high-value offer of a free burger to drive sign-ups. Then, once they are in the program, our rewards members receive periodic offers tailored to them. Members can also unlock free menu items in exchange for the points they earn, as well as unveil exclusive access to new menu items. Our goal is to get all loyalty members to download our rewards app so they can take full advantage of all of the perks and messaging that we send."

Like Willmarth, Amy Peart, CEO of Hyve Brand Concierge, a digital infrastructure provider, said personalized offers were one of the most important aspects of a successful loyalty program. Her other must-haves include data analytics and seamless integration.

"Just as every brand and location is unique, so is each customer," she told FastCasual. "Celebrating this uniqueness and tailoring loyalty rewards and incentives to individual preferences is crucial. Personalization not only enhances the customer experience but also fosters a deeper connection between the brand and the customer, leading to increased loyalty and engagement."

Using your loyalty programs for data collection

A robust loyalty program should provide actionable insights derived from customer data, said Peart, whose S.N.A.P. Platform — a solution that combines marketing automation with local marketing strategies — emphasizes the importance of data analytics in driving effective loyalty initiatives.

"By analyzing purchase history, behavior patterns and engagement metrics, brands can gain valuable insights into their customers' needs and preferences. Armed with this information, they can create more targeted marketing campaigns and loyalty initiatives, ensuring maximum impact and return on investment."

Spicer also relies on his loyalty program for data collection

"We are thoughtful when looking at when customers visit, what they order, and when they are most likely to engage with a promotion sent their way," he said. "We study the data hard here so we can create offers to excite them personally. We really aim to cater to their tendencies."

Seamless Integration, Peart's third recommendation, ensures a frictionless experience for customers and employees, making it easier to enroll, track and redeem rewards.

"By keeping things integrated and accessible, brands may maximize the effectiveness of their loyalty programs and drive long-term success," said Perat, who thinks Dutch Bros, Chipotle and Tiff's Treats are exemplary in implementing effective loyalty programs.

"Their seamless integration into mobile apps makes it convenient for customers to engage with the loyalty program while also providing valuable insights for the brands to continuously improve and innovate," she said.

A lesson on loyalty programs from Noodles and Co

Noodles and Co, which has over 5 million loyalty members attracting an average of 50,000 new loyalty members per month, uses the data gathered from its Noodles Rewards app to monitor, track and respond to guest sentiment and to create a personalized and customized experience, said Danielle Moore, director of Communications. It also recently launched a program called, "Extra Goodness" within the app program to reward members with daily perks and discounts.

Noodles and Co uses the data gathered from its app to monitor, track and respond to guest sentiment and to create a personalized and customized experience, said Danielle Moore, director of Communications.

"The Noodles Rewards program is so well received by our guests due to our focus on personalization," said Moore, agreeing with Peart's assessment about the importance of tailored offferings. "Our Extra Goodness program, how we activate special rewards offers for national food holidays, and member-exclusive items have also been our biggest drivers. We often see spikes in traffic to our digital channels and a boost in rewards member sign-ups during these key moments in time."

Noodles saw this last year when the app launched the chain's Chicken Parmesan dish two weeks before the nationwide roll-out.

"This type of reward member exclusive not only drove program sign-ups, but it drove acquisition within our loyalty program and created more value for our rewards members so frequency increased across the board," Moore said. "This campaign was a two-pronged approach, which allowed us to maximize results through the rewards member exclusive and the nationwide launch. Through the national launch, we were able to generate a second wave of guest engagement and excitement through our digital channels. The results from this campaign were some of the most successful we have seen since the launch of our Tortelloni dishes in 2021."

Because its rewards members spend 50% more than non-rewards members and digital sales account for over 50% of all sales, Noodles' loyalty program and the rest of its digital channels must be top-of-the-line.

"Technology plays a large role in how we operate, from our Noodles Rewards app to our digital channels, to the tech advancements that have been made in-restaurant through our new digital boards, technology drives our business forward," Moore said. "Our digital menu boards across our restaurants also successfully elevate our rewards program. We rolled out digital menu boards across our system in 2023, which allows for targeted guest communications by market and daypart, and enables menu innovation and dish seasonality. These boards can increase each restaurant's flexibility for culinary testing and menu simplification so guests receive clear and concise communication across all Noodles restaurants.

"This investment in technology benefits our supply chain by providing each restaurant with measurable data to determine what's in demand and scale supplies and operations based on that restaurant's unique needs."