Restaurants optimize rewards programs to gain customer data and boost loyalty

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Red Robin and T.G.I. Friday's enhanced their rewards programs to engage loyal customers
Red Robin and T.G.I. Friday's enhanced their rewards programs to engage loyal customers

Numerous restaurant chains have launched or expanded their loyalty programs in recent months, a tactic that enables them to drill deeper into customer data and create more targeted offers. Restaurants have also begun embracing mobile and social technology to develop a loyal customer base.

Red Robin launched its Red Royalty program across all corporate-owned stores (about 75% of the brand's locations) about a year ago and has been expanding it into its franchises ever since. In February, it introduced enhancements to the rewards program, like making it easier for guests and team members to know a member's reward status when they enter the restaurant, instead of expecting the customer to have checked before coming to the restaurant.

“The exciting aspect of loyalty is it's always evolving as you learn about your guests and become more knowledgeable about their dining frequency, their preferences and how they interact with your brand,” says Dana Benfield, director of loyalty and retention at Red Robin.

Most of the program's communication is done via email, but it is expected to expand further into mobile and social as the program evolves. Members get every 10th item free, as well as a free burger for their birthday month, and a variety of “surprise and delight offers” throughout the year.

A number of apps and programs have also launched aimed at allowing both chains and independent restaurants to gather customer data and encourage loyalty. The recently launched Riiwards offer restaurants a self-service platform that provides a range of rewards to members, whether it's their 10th or 100th visit, and has analytics that measures member behavior and demographics. New programs like Spoonity and Belly also offer turn-key loyalty programs to allow even the smallest restaurants to move well beyond the buy-10-get-one-free punch card.

Minnesota-based ValuedPatron Marketing Services launched its Eat-A-Bite, Give-A-Bit program in March, which uses a smartphone app to incentivize consumers to patronize restaurants by offering rewards and donating the meal punch to hunger relief groups like Feeding America.

Drawing on research from customer engagement and the responses from general managers, T.G.I. Friday's recently rolled out changes to its Give Me More Stripes rewards.

Rather than receiving an emailed certificate when a certain amount is spent (or “stripes earned”) that must be used within 30 days, now members can accrue points over a longer period of time and choose from five different rewards. The casual dining chain now also offers members VIP “jump the line” preference on busy weekend nights, which has proved to be a big hit and an effective tool for recruiting new members.

The company uses a database that tells them what its members order, when they come to the restaurant, and how often. They have also increased their mobile presence with the program, allowing individuals to text “Join” to become a member instantly and start earning stripes right away.

“Our strategic initiative is for the program to evolve so that there is definitely more one-to-one communication the way the customers want to receive them, whether it's via email, via text, via mobile,” explains Shannon Gewinner, VP of brand marketing at T.G.I. Friday's.

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