Rethinking restaurant customer engagement, loyalty strategies

Restaurants face challenges when creating and retaining customer loyalty as the consumer's wants and needs are continually changing.

Tracking and understanding those needs and wants is a common industry quest. Over half, 54%, of companies are finding it difficult to interpret customer data and understand the needs of the moment, 23% are unsure of what promotions will be most effective and 53% are wrestling with how best to create personalized advertising experiences, according to Vericast research.

All those issues play into the loyalty strategy restaurants are consistently striving to improve — more than half, 68% are aiming to optimize customer data to help build loyalty and 61% are aiming to leverage customer data to personalize engagements and drive more relevant offers, revealed the Vericast findings.

The value of customer data, however, according to Dana Baggett, Vericast's director of client strategy, restaurant category, is not only limited to the development of a loyalty program or enhancing the loyalty program.

"Taking your loyalty data and using it across all of your platform's channels as well as all of your marketing campaigns, is a great accelerator to success," Baggett said in kicking off a panel talk at the Fast Casual Executive Summit. "Consumers want engagement beyond incentives and coupons."

Baggett served as moderator for the panel, "Charting a New Course with Loyalty Marketing," sponsored by Vericast, at the summit held in October in Louisville, Kentucky.

The event, run by Networld Media Group, draws executives from leading brands to share successful ways to build and manage restaurants. Networld Media Group is the parent company of Fastcasual, Pizza Marketplace and QSRweb. The company's next event is the Self-Service Innovation Summit Dec. 4-6 in Miami, Florida and its Restaurant Franchising & Innovation Summit will take place March 24-26, 2024.

The panel featured Bob Andersen, president of The Great Greek Mediterranean Grill; Jon Asher, CMO of Nekter Juice Bar; Josh Halpern, CEO at Big Chicken and Sara Kear, CMO at Condado Tacos.

Condado's all about guest engagement

Within Condado Tacos, which operates 47 restaurants in 20 markets and aims to have 80 to 100 by 2026, loyalty strategy has been all about guest engagement, not transactions, from the start.

"So, we wanted to engage our guests, understand them and learn from them, build trust and loyalty — those were our big goals around loyalty," said Kear.

The brand has been innovative with initiatives. One that worked well was the Best Bud tasting event which invited small groups of top-tier loyalty members to taste and test products in development in exchange for feedback.

"That has been really helpful and mutually beneficial," said Kear.

In honor of National Taco Day the brand launched an AI taco quiz in which players got the taco that best matched their personality.

"[That was] A great kind of marriage between technology and personalization kind of all wrapped up in our food," said Sear, adding surveys have also worked well for the brand.

"When we launched our loyalty program, we were trying to figure out who our target guest really is. We did small group and focus groups," she said, adding one survey focused on 'lapsed and lagging' guests aimed at discovering why guest behavior was changing.

"We sent out a survey to find out what's up and learn from them and we learned a lot," she said, noting there was an unintended consequence.

"We're reaching out saying we noticed something is happening and it rebuilt that trust with the guest, and we were able to reactivate guests with that. That's just a few programs that have worked that were not transactional."

Big Chicken all about talking to guests

Halpern, Big Chicken CEO's, believes a fundamental issue the restaurant industry has when it comes to loyalty programs is not talking to the guest but talking to the shopper.

The brand is owned by basketball legend Shaquille O'Neal and has 26 restaurants open with 332 in development.

"Our loyalty programs, all in all, in the industry, are really about going after the person whose credit card goes into the machine, which is often not the person who made the decision to eat at the restaurant, because we found 70% of the time, the person choosing to eat at the restaurant within the family is the kid, right?," he said, noting "a child doesn't care they could get 10% off the next order of fries, right?"

"What the Big Chicken kid customer wants is to be emotionally attached to the brand and emotionally attached to Shaquille," he added. Big Chicken customers get a birthday text message of O'Neal singing happy birthday and the brand does free ice cream cones on Shaq's birthday every year.

"It's really how do we drive big fun right? So, we're looking at it in a very similar way but different because of the age gating thing."

It's all about emotional connection points and understanding everyone wants to be rewarded differently, said Halpern.

"How do you get rewards away from cash, away from just food discounts and make it where your brand is? It just can't just be about cash discounts — it needs to be about heart," he said.

"Google loyalty and look at all the images that come up. Every one of them is about heart, about love, about passion. And then add the word restaurant in front of it. And all of it's about apps, discounts, and tech stack, right? But the more we're able to get back to the heart, it's all about heart, right? With loyalty, I think the better we be. And that's why Big Chicken is building this thing in a way where we can really go after the heart."

Nekter all about testing, testing, testing

Juice brand Nekter is growing and growing fast — 205 locations and opening almost two a week.

Its loyalty initiatives are moving just as fast as the brand is running 20 different campaigns a week and always testing, said Asher.

"We're always testing things, but we often have franchisees say, 'I want to push more traffic on Tuesdays or after 4 p.m.' and we try it and invariably doesn't work that well, but at least we have that data and then we can let them know upfront," he said.

"Before loyalty, obviously we couldn't tell much about the customer," he added, noting the role of the POS has played a big part in gathering data for the loyalty program's launch eight years ago.

"So, we have a ton of data. We're constantly testing. So, we get all the great stats, and we can bring that to the table and continually optimize things. We can really get to the bottom of that ROI, not only ROI, but customer lifetime value, which is huge to know acquisition costs," he said.

Great Greek Mediterranean Grill focusing on sign-ups

At The Great Greek Mediterranean Grill, the loyalty focus is all about signing up members.

The brand, which has 41 restaurants and aims to have 50 by year's end with over 300 in the development pipeline, is focused on recruitment as that moves the needle the most, said Andersen.

"If you're a new, rapidly growing brand like we are at the Great Greek is, focus on those components of getting more people into the system," he said, noting the brand has defined loyalty in a broad way.

"You know, we have a rewards program, and that's what most people are just referring to as loyalty. But we're also big on email and text programs, and sometimes people are losing sight of that."

Andersen said most consumers don't want to download an app to get loyalty rewards and the brand's main campaign is "getting more people into the system."

He's a fan of contests, especially for opening new restaurants.

"But our team focuses really on three main things. One is creating awareness. You know, you'd be surprised how many restaurants you go into. You don't even know they have an email program or a rewards program or whatever it might be. So put that messaging in front of your guest face, whether they're in a restaurant or they're online," he said.

Secondly, he said, focus on making the offer to sign up appealing.

"The third point is probably the most important. You have to make it easy. It has to be easy for people to sign up," he said.

The brand's approach is one of phases, he explained. Phase one is an all-in POS supplied loyalty program. The second is focused on driving people into the program. The third is getting granular with the data to be able to segment out offers.

"If you're a new and emerging brand and it just it takes it takes time. And that's what we're that's what we fight against is really getting a solid program. Get all our people on the same page looking at it the same way."

Editor's Note: Brands can expand loyalty program exposure for free at RewardsThatMatter.com, a consumer site providing reward and loyalty program perks news, by filling out a directory form.