I may ruffle some feathers with this one… Just because you have a loyalty program doesn’t mean you know your guests. Most enterprise-level restaurant brands know only a fraction of their customers. While smaller restaurants can foster personal relationships with their guests, larger brands struggle to replicate that experience at large scale. Often when I ask how many of their guests they actually know, many brands respond by citing the number of members in their loyalty program. When we dig deeper—looking at what percentage of total guests that loyalty base represents—the answer can be shocking. In most cases, brands truly know only 5-10% of their overall guest base. This means that the vast majority of guests remain unknown, whether they’re first-time visitors (70% or whom never return) or loyal guests who represent a significant portion of sales yet aren’t recognized for their loyalty. Even within the top 20% of guests who tend to generate 60% of a brand’s sales, typically fewer than half are part of the loyalty program. Brands are missing a huge opportunity to deepen relationships with these valuable customers. We all want the same thing: for guests to feel seen and valued every time they engage with a brand, whether it’s in person or through digital channels. The brands that invest in systems that make guest data collection seamless will ultimately win and retain truly loyal guests.
This shouldn't ruffle any feathers for people who understand loyalty programs. Our philosophy at RLS perfectly aligns with your statement. Loyalty program is a misnomer. It should be called "rewards" program - usually, but loyalty sounds sexier. The program doesn't generate loyalty, it generates behavioral data (which can increasingly be obtained elsewhere, by the way! - not just via the rewards program). The more interesting question to me is the value of this data. So many brands are obsessed with gathering and cleaning the data, and so few are paying attention to the use cases for this data.
Yep! Totally agree. I would even take it one step further, Noah - Loyalty program members ≠ Loyal guests. Loyalty is irrational. Loyalty programs tend to be rational discount systems. Use the data to know them, show them you know them, and show them they are valued and that is less about a program and more about listening to guests needs by using the data.
There are many missed opportunities to collect guest data when guests dine at the table. Reservations goes only part-way there and doesn’t cover everyone at the table. Loyalty makes inroads, as well. The worst thing a restaurant can do is take payments with no effort to capture guest data. I always tell restaurants inquiring about QR code pay at table that when guests pay with Apple Pay or Google Pay on their phones, you get delivered their verified email addresses 100% of the time. You could get all your guest email addresses automatically! Of course, split the check helps do so for more than one person at the table. In contrast, Apple Pay or Google Pay via NFC doesn’t give you guest emails! Restaurants think card present is so wonderful, but CNP has a much better grasp of guest identity and is willing to share it with you. Does it cost ~30 bps more? Yes, but you get what you pay for! NFC, aka tap to pay, specifically won’t even give you something as meager as the cardholder name.
Loyal = trust Trust my food will be consistent Trust my experience will meet expectations Trust in cleanliness Trust you want my business To Olga’s point- “loyalty program” is a façade for a rewards program. They fall into the “want my business” bucket. The rewards and perks can influence purchasing behavior, but does it make me loyal?
The issue isn't just participation levels in the loyalty program but also how the data is used, and who is evaluating winners and losers (beware if the loyalty provider is also the measurer of results!). AI will radically transform what can be done with data in the future, so concept leaders should focus on the end of what really drives loyalty. Then they can figure out how data and loyalty design can support doing a better job at that -- then work backward -- as opposed to starting by saying we need a loyalty program and working forward.
Totally agree! Allowing consumers to pay how/when/where they want is just the tip of the spear with how unified commerce can enable merchants to collect and leverage actionable data to grow revenue.
Legacy loyalty programs operate under a number of flawed assumptions because they lack visibility to the entire ecosystem. I’d argue most of these solutions are ROI negative. 360 view of your customer doesnt equal 360 view of your customer base.
one creates great customer loyalty with great customer service. People return to places where they feel good when they leave. Most loyalty systems don't include this component and don't know how to bring it into the equation. I'm starting to see people follow the Home Depot model where the associates welcome people and ask customers if they need help.
Founder - FUSIAN
2dYou said something similar on a hike in Palm Springs a few years back... I think about "hospitality at scale", frequently - it's hard - and i'm intrigued, outside of loyalty "data," and great operations what are some ways you see brands "knowing their guests" at scale?