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The Menu – the latest insights on restaurant technology trends, customer successes, and best practices.

  • April 11, 2018

How to Nurture Restaurant Loyalty: The Key Role of POS Technology

Gene Yasuda
Content Strategist

For restaurant operators today, loyalty programs are essential. After all, keeping existing customers is far less costly than attracting new ones.

But do you really know if yours is effective?

Operating successful loyalty initiatives is more complex than it seems, and knowing the correct answers to important questions is a must. Do you know if your rewards are relevant? Are loyalty programs going to become obsolete if millennials are less loyal than baby boomers? What role does technology play in loyalty?

Providing insights for these queries was the main objective of Oracle Hospitality’s just-published global study, The Loyalty Divide – Operator and Consumer Perspectives, Restaurants 2018. Oracle Hospitality commissioned Morar HPI, an independent UK-based consultancy, to survey more than 13,000 consumers and 500 businesses across retail, hotels and restaurants in Australia, Brazil, China, France, Germany, India, Mexico, UK and US. The findings are designed to help restaurant operators refine loyalty initiatives and better understand the new levels of personalization they’ll require to be effective.

The report – which was released at Oracle Industry Connect, an innovation and technology summit held April 10-11 in New York City – shows there is a significant “disconnect” between operators and consumers when it comes to their perceptions of loyalty. For example:

  • 50% of restaurant operators believe guests would enroll in every loyalty program made available to them, but only 27% of consumers say they actually do. Furthermore, 23% say they rarely join programs.
  • 47% of operators believe their loyalty program offerings are mostly relevant. By comparison, only 27% of consumers share that opinion.

Closing these “perception” gaps will be crucial in gaining consumers’ allegiance.

“Hospitality is an industry that celebrates personal interactions and a rich knowledge of guest behaviors,” said Mike Webster, senior vice president and general manager, Oracle Hospitality. “World-class operators are now leveraging adaptive intelligence to deliver unique connections based on guest preferences as they move beyond simple loyalty and discount schemes. The result is greater engagement and social advocacy for new dining connections.”

The Loyalty Divide addresses several key topics – including differences in generational behavior and technology’s role in nurturing loyalty – to help restaurant operators develop effective strategies.

One of the more surprising revelations is that younger consumers profess to be more loyal today, contradicting society’s typical portrayal of them:  

  • 44% of millennials (25-34) say they are more loyal to restaurant brands than before. And 30% of millennials plan to sign up for every loyalty program, while 48% of baby boomers (55+) say they will only enroll in select, relevant programs.

It’s also an imperative for operators to realize that building loyalty today is no longer a task they can handle exclusively by themselves – especially in the age of social media. According to the survey, 51% of guests are likely to research brands on social media before buying, and 48% are likely to share photos of restaurant experiences on social media. And it’s noteworthy that 38% agree that restaurant recommendations made by social media influencers are more trustworthy than those made by celebrities.

Perhaps, most importantly, operators need to understand the motivations that drive consumer loyalty. To help with that pursuit, the report identifies four “personas” that consumers adopt ­– The Broadcaster (41% would submit a YouTube review in exchange for a reward), The Enthusiast (50% want to engage in new and exciting menu items), The Lazy Loyal (72% like programs where points are automatically redeemed) and The Seeker (58% would exchange personal details for personalized promotions) – when making restaurant choices.

Discover more about these consumer archetypes and learn how to win their loyalty by reading The Loyalty Divide. Download your copy here.

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