How likely are consumers to switch to a competitor’s takeaway or restaurant and what type of communications and loyalty schemes will keep them coming back?
With the cost-of-living crisis making customers more selective about how often and where they dine out, taking excellent care of your regular customers has become more crucial than ever.
Loyal customers provide consistent revenue, reducing the need to constantly attract new ones, which can be costly and time-consuming. A strong base of repeat customers also generates word-of-mouth referrals, one of the most powerful forms of marketing.
But how do you generate customer loyalty? What forms of communication are today’s consumers receptive to? And how do they want that information delivered? These are all questions answered by tech supplier Zonal in its latest GO Technology Report.
Who is more loyal?
According to Zonal, younger consumers are much readier to move to competitors than older ones. They have had less time to grow affinity towards hospitality venues and tend to be more experimental and adventurous in their eating and drinking out.
By contrast, older adults tend to stick to the restaurants, pubs and bars they know and trust. Likewise, parents are significantly more loyal than non-parents, perhaps because they like visiting venues are confident will keep their children happy. Regular visitors, on the other hand, are more fickle; the more often they eat out, the less loyal they are.
Getting communications right
According to Zonal’s research, consumers are generally open to communications – only a quarter don’t want to be contacted at all by a venue.
With consumers getting such a high volume of communications, it is vital to understand exactly what people want and how they want to receive it. It’s also important to get the frequency right. Less may be more here, suggests Zonal, with only 30% wanting to hear from their favourite venues at least weekly — fewer than those who want messages monthly (36%).
What consumers want
It’s probably no surprise that the report reveals consumers are most likely to want to hear from venues about ways to save money (54%). However, they’re open to hearing other news too, including new menu items (44%), price changes (39%), events in the venue (34%) and changes to opening and closing times (25%).
How they want it
With so many methods and platforms for engagement available, it can be hard to know which are most effective. According to Zonal, e-mail remains by far the most popular channel, with nearly three times as much interest as anything else, including newer channels like social media (17%) and WhatsApp (15%), which were once more likely to transform consumer engagement ranked behind all these methods.
Loyalty schemes
By their nature, loyalty schemes should help stop consumers leaving for competitor venues. But they’ll only do that if they give people what they want.
The good news is that people are still receptive to loyalty schemes, with a huge 90% still finding them appealing, according to Zonal. And as with communications in general, customers are most attracted by savings. The most popular type, appealing to half (49%) of consumers, is a member price scheme, which have become very common in supermarkets in recent years. So far, they have been less successful in hospitality, with Pret citing dual pricing as one of the main reasons for its recent changes to its popular loyalty subscriptions scheme.
The next three most popular programs – point schemes, cash back and deals on regularly-bought products – all relate to money off as well. There’s a long tail of other rewards like prizes and subscriptions, and they appeal to younger adults in particular. However, none of them have nearly as much appeal or straightforward financial savings, especially to older consumers, parents and regular guests.
The bottom line is that if you want to keep customers coming through the doors, you need to understand your different demographics, what they want, and how, when and where they want to get it.
