Hospitality sector and Customer Loyalty

Azpiral > Azpiral Client News  > Hospitality sector  > Hospitality sector and Customer Loyalty
hospitality

Hospitality sector and Customer Loyalty

The hospitality sector in Ireland represents an important part of the tourism industry and includes hotels, restaurants, pubs and clubs, guesthouses and self-catering operations. These businesses operate in a competitive environment. We focus on the restaurant business specifically and look at consumer trends and how loyalty can benefit restaurant owners, for the course of this blog post.
The emergence of new chain restaurants and their continued expansion has led to huge competition in the restaurant sector. With increasing competition between restaurants, attracting new customers can no longer guarantee profits and success, but retaining existing customers is of more importance. Consequently, customer loyalty is considered to be a vital factor for success, continuation, and profitability of the restaurant industry. In a recent study, 71% of the core customers who belong to at least one restaurant loyalty program will join the loyalty program of his or her most frequented restaurant and then use it more than any other loyalty program (Deloitte, 2014) Engaging customers has never been so important for this sector.
The restaurant sector is divided into two categories quick service restaurants (QSR) and full-service restaurants (FSR). QSR include fast food restaurants that offer a lower price point and convenience. In general, QSR is popular for the demographic between 25 -35 years old, while FSR includes both casual dining and white tablecloth restaurants. More popular to the 54-64 age demographic. This demographic are highly motivated by price promotions. A little insight into your customer’s behaviours and expectations can change the course of both your service and loyalty offerings and in turn, distinguish your restaurant from competitors and also keep you ahead in this era of digital Darwinism.
An essential element to building true customer loyalty and, not just increasing repeat visits, is understanding your customer’s wants and expectations. Loyalty programmes delivered and managed through an integrated loyalty platform can harness your customer data in real-time through the ePOS or online. This type of system is less intrusive and doesn’t require restaurant owners to badger customers for personal preferences. Instead, each transaction leads to rich customer insights. This data equips decision makers with invaluable insights into their customer’s behaviour. After you’ve identified your customers, it is strongly advised to personalise interactions with your customer base i.e. offering a free birthday dessert to your customer on their birthday or even better, offer them their favourite dessert for their birthday. Simple gestures like that have been proven to heighten brand affinity. All loyalty involves customer engagement. Therefore, all tasks that promote the kind of customer satisfaction that best matches your service offerings need to be executed well. This includes through various types of communications.
There are many ways for restaurants to engage their customers. Using strategic channels of communication is one and it is certainly underutilised in the restaurant sector. However, mobile and mobile applications are increasingly popular among quick service restaurants, more restaurants should embrace channels like this. The advantages of such platforms include widespread access, flexibility, portability, and immediacy. Restaurants see great power in adding mobile to their loyalty programme because it provides another means of interaction, mobile offers and mobile payments, giving customers a convenient alternative to payment. Mobile analytics also give great insight into your customer’s behaviours, enabling decision makers to improve promotions and advance tailored offers to your customer’s needs. A good mobile loyalty program should not only increase customer retention, but it should be a way to acquire new customers. In a nutshell, it’s a digital way to spread word of mouth.
A QSR embracing loyalty and mobile loyalty is Starbucks. Starbucks, which is one of the largest coffeehouse chains in the world, also happens to have the most successful loyalty program in the US. This is a huge achievement considering the level of competition in their market. Starbucks recently introduced a rewards programme based on spend which has proven extremely effective for them. The more people go to Starbucks to drink coffee, the more they are rewarded, thanks to “My Starbucks Rewards,” their new loyalty programme.
How it Works:
Customers sign up to “My Starbucks rewards” for free and can have a gift card or loyalty card. With the gift card, they can load spend onto the card and start collecting Starbucks ‘stars’. Giving customers the option to load spend onto their card makes them feel like their drinks are free when they redeem using their gift card. Every time a customer purchases a beverage they earn one star, the more they buy the more stars they collect, the bigger rewards they receive. When customers register for the Starbucks loyalty card they are at the welcome level, which includes a free birthday drink. Once a customer earns five stars on their loyalty card, they reach the green level which entitles them to get free refills of tea or coffee. Customers with 30 stars are considered Gold-level customers. These customers receive a free drink for every 15 stars, a personalised Gold Card that recognises them as preferred customers, and customised offers and coupons based on past purchases.
Starbucks also added another channel to their loyalty programme by introducing a mobile rewards app. The app allows customers to order and pay through the app, check their loyalty account details and avail of promotions. Over 1 million Starbucks customers are registered on the “My Starbucks” app. This has been a great attribute to Starbucks loyalty programme success. Starbucks have seen an increase in customer engagement and customer retention since they added a rewards-based loyalty programme and app.
Azpiral recently integrated with PAR PixelPoint® POS Software. PAR’s Hospitality segment has been a leading provider of restaurant and retail technology for more than 30 years. PAR offers technology solutions for the full spectrum of restaurant operations, from large chain and independent table service restaurants to international quick service chains. For more on this integration read https://www.azpiral.com/azpiralpro-integration-to-par-pixelpoint/.

Keep in touch via our Newsletter

Download our Ebook

Azpiral Magazine September Issue

You have Successfully Subscribed!