Customer loyalty has long been the ‘holy grail’ of hospitality. The old saying is true – it really is easier to keep a customer than to find a new one. And for years, café operators have striven to unlock the potential of this basic concept by developing customer loyalty schemes of one variety or another. But unfortunately, they don’t always achieve the desired results. Why? What can a café do to set up a loyalty program that can genuinely aid business growth?
What is a Customer Loyalty Program?
To survive, every café needs customers – and lots of them! So how do you go about getting the customers that you find to return after the first visit and potentially continually? One way is to create an incentive to get them to come back again. The age old ‘buy-9-coffees-get-the-10th-free’ card has long been used to encourage patrons to return regularly so as to receive a reward for their loyalty. Of course, there are now far more sophisticated adaptations, but the basic premise is always the same.
One of the primary aims of a customer loyalty program is to engender good will which, when coupled with some form of perceived bonus, will hopefully result in regular customers who frequent your venue. Or if they are presented with a number of different cafés to select from, members of your loyalty program will, more often than not, choose you.
But it is worth bearing in mind that these programs aren’t guaranteed. For instance, cafés based in a high tourist region will be unlikely to get a high percentage of regular, long-term repeat business because most of their patrons aren’t local, and return home when the holiday season is over. Additionally, customers do occasionally sign up to a program without really intending to become ‘regulars’ simply because the offer is made… let’s be honest, how many store loyalty cards are sitting in your desk drawer at home?
So what are some basic ideas that will help your customer loyalty program to be successful?
Keep It Simple – For You and Your Customer
One key ingredient in running a successful loyalty system is ensuring that it is easy to understand and low cost. After all, that is why ‘coffee card’ loyalty is still by far the most used program type in stand-alone cafés – it is just so simple to manage. The more complex the setup, the less likely your customer is to appreciate the benefits and utilise them, and the more effort it will take for you and your staff to promote and maintain it. Even the use of plastic loyalty cards is falling out of favour due to the fact that they clutter up wallets and purses, and are often discarded.
Understand the Liability Involved
It is worth mentioning that any offer of a free coffee or a purchase being made using ‘loyalty points’ involves a level of liability. Some businesses have run into trouble because they have not accounted for this. For instance, if a business is running on an overall profit margin that is lower than the effective discount percentage being offered as a loyalty incentive, then the end result would be catastrophic! So make sure you understand the real costs of the system you set up – another reason to ‘keep it simple’.
Find Other Ways to Promote to Your Loyal Customers
It is important to find ways to communicate with your regular patrons and offer them further incentives to increase their visits or the amount that they are spending per visit. Could you utilise social media to offer some sort of meal deal to your regulars? Particularly during a traditionally slower day or time of day at your venue? After all, the point of a customer loyalty program is to increase your business, not just give a discount on items that the customer would probably have purchased anyway.
Remember – It Doesn’t Replace the Need for Good Service
It must be said that most of us regularly visit a café or restaurant, not because we have joined a loyalty program, but because we like the coffee and the food, the staff are friendly and the venue has a relaxed atmosphere. Conversely, we are highly unlikely to return if we don’t like what we ordered, or the service was bad. So the success of any customer loyalty scheme cannot be guaranteed unless the café is genuinely somewhere the customer wants to return to.
Yes, finding ways to encourage customers to return and support your café regularly really is a key to your ongoing success.
This article was originally submitted as Uniwell4POS content for the Cafe Culture website.