Loyalty programmes that actually bring in orders

What loyalty does, and who it does nothing for

A loyalty programme is a single agreement. Your guest does something you want and gets something back later. Ordering earns points, points turn into a dish. It never has to be more complicated.

What you get out of it is not just the extra order. It is that you can see who orders twice a month and who disappeared after one try. Without a programme every order is a stranger walking past.

It is not a good idea for every restaurant, though. Walk through these four conditions first.

• People order from you often: pizza, sushi, sandwiches, coffee, the standing Friday night.
• You have your own ordering site, so points are added automatically and nobody has to stamp anything.
• Your guests come from the neighbourhood rather than off a coach.
• There is something cheap on your menu that guests already like.

If most of your takings come from people eating here once in their lives, you are building a card for guests who never return. If the same people order every Thursday, loyalty is the cheapest revenue there is.

The six formats, and which one suits your menu

Six formats turn up in hospitality. All six do the same job, they simply reward different behaviour: some push spend per order, others how often people order.

For almost every restaurant, points are the sensible place to start. Counting visits is simpler but more expensive: an eight euro sandwich then earns as fast as a family ordering sixty euros of food. Tiers and subscriptions only get interesting once you already have a group buying something every week, and a game is fun for exactly as long as you have time each week to hang a new goal in it.

Points hurt your margin less than a credit does

The real difference in money is not between running a programme and not running one. It is between points and a credit in euros.

Hand someone ten euros of credit and they will use it immediately, usually on the most expensive dish they already wanted. You have given away ten euros of margin and got no extra order for it. With points you decide what they redeem against, and a guest who is a few points short is more likely to add something than give up.

Run the sum once. Say an order of 30 euros leaves you 20 euros after purchase costs. Ten euros of credit costs you half that margin in one go. A side you make yourself costs you one portion of ingredients, and the rest of that order still earns your normal margin.

Pick your reward on cost price, not menu price

A reward has to do two things at once: feel valuable and cost almost nothing. That sounds contradictory, but every menu already has items that do both.

Look for what you make yourself and what sits alongside a main dish. Garlic bread, a portion of chips, a house sauce, a small dessert, a soft drink. To your guest that is a gift. To you it is one portion of ingredients, while the rest of the order earns its usual margin.

• Give away: something small you make yourself that goes with a main dish.
• Do not give away: your most expensive dish, which is precisely what your guest would otherwise have paid for.
• Do not give away: delivery costs you pay a courier out of your own pocket.
• Do consider: a reward tied to what you are known for, so it doubles as advertising.

Do those sums on amounts excluding btw. You remit 9 per cent on food and 21 per cent on most drinks, and that share was never yours.

Show the balance, or the card does not exist

This is where most programmes break. Not on the reward, on visibility. A guest who does not know how many points they have is not collecting anything. They have simply ordered.

The balance belongs where the decision gets made: in the ordering screen, with the basket open. Two more orders until your free dessert reads very differently there than the same sentence in next week’s newsletter.

• In the ordering screen, next to the basket.
• On the confirmation page and in the confirmation email: here is what you just earned.
• In a short message at the moment only one order stands between them and the reward.
• On the receipt or the sticker on the bag, for people collecting.

Give new members a few points as a starter, too. In a well-known American study of car wash stamp cards, people handed a card that already carried two stamps completed it more often than people starting from zero, even though both groups had to buy the same number of washes. A card that has already been started is harder to abandon.

Give the points a name that fits your restaurant. Slices, stamps or tokens make the reward more tangible than a balance.

How to get people to actually sign up

Signing up is the step where you lose most people, and it is nearly always the form’s fault. Every extra field costs you members.

1. Ask for no more than a name, an email address and a phone number. No password, no username.
2. Make signing up part of the first order, not something standing next to it.
3. Do not ask for a separate app install before someone holds a single point.
4. Put one line on your ordering page saying what someone gets, not what the programme is called.
5. Have your staff mention it at collection, and put a QR code on the receipt.

Ask separately for permission to email, put an unsubscribe link in every message, and store no more data than you need. That is not only good manners under the GDPR, it keeps your list usable.

Put the programme where the order arrives

On Thuisbezorgd, Uber Eats and Deliveroo you cannot run a loyalty programme that belongs to you. The guest is a member of the platform, not of your restaurant. You get the order, you pay the commission, and the email address stays with whoever passed it on.

On your own ordering site the opposite happens. No commission comes off, the points sit against a name, and your order history tells you who orders what. So use the platforms for what they are good at, being found by people who do not know you yet, and put a reason in that first order to come back directly next time. Points that only count on your own site are that kind of reason.

Connect the programme to your till as well, so points at the counter count as much as points online. Skip that and you build two groups of regulars while rewarding only one.

Work out whether the programme pays for itself

A loyalty programme is only worth something once the extra orders bring in more than the rewards cost. That is one sum, and it fits on the back of a receipt.

Take the margin left on an average order and the purchase cost of the reward. Divide the second by the first and you know how many extra orders each reward has to produce before you break even. If a reward costs more than your margin, your guests are collecting their way into a loss.

After that, look at two numbers every month: what share of your orders comes from members, and how often a member orders compared with someone who is not one. If both climb while your average order value holds steady, it is working. If that value falls, your reward is either too easy to reach or too expensive.