One of the best ways to create a loyalty program is by tapping into the knowledge of preexisting programs. Check out the five best practices of loyalty programs to bypass failed program attempts and to shape your loyalty program by following winning formulas.

There are key components that need to be present to make a loyalty program coincide with your overarching business goals and strategies and ultimately satisfy your customer base. Below are the top five key components of a successful loyalty program:

1.) Motivate customers
Properly planned and executed programs can foster a relationship between you and your clientele. You must create a program that appears to actually exude a reward. Moreover, you and your staff must convince customers to join the program based on its inherent benefits.

Do not arbitrarily target random customers. If you notice a habitual pattern of the “Jones” family enjoying breakfast every Sunday, you should approach them with an offer to receive a free stack of pancakes once per month.

Let customers know they will receive a free appetizer or dessert during their current visit if they sign up for the loyalty program. This pressure may entice them to sign up for the loyalty program on the spot. We all love instant gratification.

2.) Connect with your customer base on a personal level
Your guests need to feel as if they are more than a mere transaction, a revenue-generating piece of the operations puzzle. Customer-specific prizes are a great way to approach this concept. Your program should permit you to track purchasing records and thus, you can tailor your rewards based on each patron’s preference.

Remember, if customers feel special, they will share the feeling with their friends and family. Positive word-of-mouth is an easy way to increase traffic.

Consider randomly giving an “added bonus.” If your customers feel an emotional bond with you and your restaurant, they will feel obliged to frequent your restaurant.

3.) Keep it simple
First and foremost, facilitate a quick and easy registration process. The last thing you want to do is annoy your customer or deter him or her from signing up for the loyalty program.

“Buy 9 and Get 1 Free” can be a bit overwhelming for the average consumer. Think of an alternative approach to rewarding repeat business. Make the reward attainable or your customers will disregard your program entirely.

Match your rewards to your restaurant concept. If you are a Chinese restaurant, offer a free quart of fried rice. If you are a Mexican restaurant, offer a free jar of homemade salsa. Consistency is key.

4.) Focus on points, not dollars
Some customers may be skeptical if you are asking them to spend ‘x’ amount of dollars. They may wonder if they are actually benefiting from the program or if they are simply adding to the restaurant’s revenue.

By delegating points, it not only makes it more of a game, but also removes that level of skepticism. During slow shifts or times of the season, offer extra points to loyal customers.

5.) Measure your successes
Seek customer feedback and ways to enhance your current program or create a comprehensive, worthwhile loyalty program. After all, this initiative is for your customers and you want it to be successful. Actively utilize feedback.

Effective programs measure and track spending habits. This can help project future sales and help you tailor programs to specific customers.

Evaluate the program after a set amount of time. Remove any pieces that are not functional and add any that you have found would be beneficial. Be sure to keep restructuring the program one to two times per year and communicate changes to your customers. People do not like to be blindsided.


Six Clever Customer Loyalty Programs
By now, you’re used to companies offering loyalty programs. You probably use a loyalty card when you shop at the grocery store, and you might use one for your morning latte at the coffee shop. But wouldn’t you like to offer something a little more interesting than a card swipe for your customers? Check out these ideas for clever customer loyalty programs.

1.) Use Foursquare
Your customers are probably on Foursquare anyway, so why not take advantage of this for your loyalty program? For every designated number of check-ins, offer customers a great discount or a free appetizer. No cards required!

2.) Make it special
It might not sound like a good idea to have your customers pay something up front to join your loyalty program – after all, aren’t loyalty programs supposed to save customers money? But if you market your loyalty program as something elite, for special customers, you can make it seem attractive. Of course, this means you’ll really have to deliver with your rewards. Offer deep discounts and special freebies for customers in the program.

3.) Turn it into a game
Loyalty programs don’t have to be totally boring. Make yours a little more interesting by making it a game! Give your customers a punch card, and when they fill it up with visits or meals, allow them to enter into a raffle for a big prize. If you make it something more exciting than just a typical discount (for example, a large gift card), your customers will be eager to enter. Of course, you’re not limited to raffles…any luck-based game will do the trick.

4.) Do some good
What’s better than helping out your community? Although customers love receiving rewards, they also love giving to others. For every so many meals a customer orders, you can offer to donate money, food or clothing to a local charity. This has the added benefit of showing that your business cares about others.

5.) Offer experiences
Yes, discounts and free food are always appreciated, but experiences are a welcome change of pace. You might try offering access to a special VIP dinner for any customer who orders a certain number of meals in the designated time period. This builds customer loyalty and helps you strengthen your relationships.

6.) Partner up with another company
You don’t just have to offer your own services as a reward! Are there other businesses nearby that pair up well with yours? For example, you might consider partnering with a local movie theatre to offer a “Dinner and a Movie” deal. If a customer purchases ten meals from your restaurant, they’ll receive a gift certificate to the movie theatre. This shows customers that you care about their interests, not just your bottom line.

Customer loyalty programs don’t have to be the same old boring swipe cards. Try offering something fun or unexpected and your customers will be back often.

Source: Buzztime; UniPro Operator’s Edge