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How to halt the Loyalty “Dine and Dash”

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When it comes to converting restaurant customers into regular, loyal diners, Pamela Sullins of Kobie Marketing says social media is hard to beat

If you’ve been in the restaurant business long enough, chances are you’re familiar with the term “dine and dash” or variations thereof. It’s when customers shirk the bill and leave before management notices. But increasingly there’s a new variation of the behaviour that bears watching. It’s what I call the “loyalty dine and dash”: when customers leave a restaurant without engaging a loyalty programme or simply aren’t loyal to the brand – the “grab and gos” of the “come once and done” variety.

While quality food, good service, reasonable prices and cleanliness nearly always rank as the top four customer expectations, there are a host of other categories that can be tied to restaurant loyalty and make for a more engaging experience, preventing loyalty dine and dash.

According to the Nation’s Restaurant News 2013 Consumer Picks Survey:

  • The so-called “X-Factor” for casual-dining restaurants – or what ranked top in patrons’ minds beyond the four staple factors – was “atmosphere,” voted by 65% of survey respondents as next most important on their restaurant appraisal list.
  • “Craveability” topped the rankings for limited-service restaurants (at 54%) and menu variety was most important at family-dining restaurants at 59%.

The survey results underscore the need for all types of restaurant to think outside the typical loyalty box. Customer rewards programmes can’t just be about discounted dinners or extended happy hours. Loyalty rewards must entice patrons in genuine, experience-driven ways that satisfy their desire for a great atmosphere and keep them coming back for seconds – and thirds!

The recipe for optimal customer loyalty

Encouragingly, “craveability” and “menu variety” can easily be turned into loyalty-related motivators and social media is an excellent method of promoting experience-driven engagement. Restaurants could create enhanced experiences that promote exclusivity – a strongly emotional and coveted state.

For instance, imagine a smartphone or tablet-based menu updated in real time as restaurant goers receive an email or SMS message alerting them that their favorite dessert has become the most requested by popular vote. And the first table to order it earns points toward restaurant-related merchandise like T-shirts and mugs, or the opportunity to attend discounted entertainment like concerts and sporting events.

Smartphone loyalty programme check-in is another excellent way of improving a restaurant’s atmosphere. And considering that social media site Foursquare averages about six million check-ins a month, adding check-in features to an existing loyalty programme app might be the easiest first step.

Why is it so successful in driving loyalty? Because, obviously, social media is social in nature and so are restaurants. Since two particular patron demographics, Millennials and Generation Xers, are likely to broadcast their whereabouts via social media, it makes sense to incorporate mobile check-in into your restaurant brand’s loyalty programme.

In short, brands must be where their customers already are. California-based BJ’s Restaurant and Brewhouse is an excellent example of a restaurant using mobile check-in well. Guests can earn up to six points a day for doing what they normally do – use social media to communicate their location.

Food for thought and the need to cultivate customer continuity

Even with these easy-to-implement suggestions at hand, 2012’s loyalty retention figures have the potential to spoil the picture. Though last year’s Restaurant Industry Tracking Survey found that customer retention rates increased in all 29 restaurants reviewed, no restaurant achieved a retention rate above 78%, with most ranging between 40%-49%. What this illustrates is that restaurants are missing out on a significant customer engagement opportunity as nearly half of all diners fall into the “come once and done” category.

In the “come once and done” category there is no brand loyalty, no repeat business and almost no chance that a “grab and go” customer will become a brand ambassador. Under the most critical view, that type of service has little value as restaurants with high customer churn will always struggle. In other words, restaurants need their regulars.

That’s why well-structured loyalty programmes are so important for casual-dining restaurants. They’re a critical customer engagement tool – beyond simply good food and good service – that tells customers “this is a restaurant that cares about my overall experience”.

So if your restaurant is plagued by low retention rates, adding a loyalty programme – or revamping your existing one to give diners an entertaining experience with great rewards – can help you to truly connect with your customers and keep them coming back.

Just as restaurants have curtailed “dine and dash” with aggressive security measures and frequent stern reminders from staff, so too can “loyalty dine and dash” be reduced to “side dish” status.

 

Pamela Sullins is director of client services, Kobie Marketing