Why Most Dining Loyalty Programs Fail What others do wrong, and what you can do right.

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1 Why Most Dining Loyalty Programs Fail What others do wrong, and what you can do right.

2 44% Z z z Only 44% of loyalty program members are active. (Source: Colloquy) Most restaurants have some form of a loyalty program, from punch cards or membership cards, to ipad scan systems to vouchers.? So why don t more customers actively use loyalty programs

3 Reason1 There s a lack of focus on increasing diner loyalty. Sustainable loyalty programs focus on acquiring new diners AND retaining current ones. 7 It costs an average of 7 times more to acquire a new customer than it does to retain a current one. (Source: Kissmetrics) = $ Only20% of daily deal users returned to the same restaurant to pay full price. (Rice University)

4 2 They don t offer diners their rewards of choice. Is surprise and delight effective? And if yes, is that enough to motivate customers to dine? 4 out of 5 consumers prefer a rewards program with a clearly defined proposition in which they earn points or rewards, rather than a program built solely on periodic, surprise free items. (Source: Loyalty Pulse) Does a generic reward motivate diners, or does motivation stem from knowing they ll receive something that they truly desire? A trip to Hawaii, a new TV, or even a college education are rewards specific to diners interests. A reward isn t one size fits all. Rewards of choice recognize diners as individuals.

5 3 They re too complicated. With additional cards to carry, photos to take and websites to check in to, it feels like diners are constantly being asked to do extra work just to earn generic rewards. Simplify the earning possibilities. Programs should take advantage of one consistent factor in all dining experiences: $ Customer spend The solution? Once they spend, automatically reward customers with their rewards of choice. No cards to show No coupons to print No mobile phone to scan

6 4They use irrelevant marketing channels or none at all. Be where customers are, at all times. Loyalty programs need to have a relevant presence on relevant marketing channels: Personalized and geo-targeted s User-friendly websites without Flash or PDF downloads A mobile-optimized and tablet-optimized website Mobile apps to offer easy and immediate access In 2012, Nielsen revealed that It s expected that tablet sales will surpass both desktop and notebook sales in the near future. But as recently as Nov 2012, studies showed that only 7% of retailer sites were tablet-optimized. (Source: Skava) $ Only 7% are tablet-optimized 95% 90% of smartphone users conduct restaurant searches and of those users choose to dine out within one 43% of all s are currently opened on mobile devices. (Source: American Express Restaurant Briefing)

7 5They don t engage with loyalty program customers. A successful loyalty program engages customers and uses their feedback to continuously improve and grow their business. Create an easy-to-use platform to create dialogue with customers. Thank customers both online and offline for their loyalty. Respond to both negative and positive customer feedback Engage customers even after their dining experience has ended with 24/7 digital resources Data shows that diners who received a response to their comments revisited that restaurant 20% more often than they had previously to the response; they also spent 16% more money at that restaurant than they did before they received the response. (Source: Rewards Network) = 20% more visits 16% more spent $ Post positive reviews and comments to social media for additional exposure

8 6 They don t use data to make informed program decisions. Only concrete data can measure success. A sustainable loyalty program should use data to: Act Measure Understand who diners are so marketing dollars and efforts can target them more effectively. Analyze data to find which customers are not dining frequently enough or spending at the desired level, and then incentivize them to change those behaviors Engage React 22% Data shows over a 22% lift in dining activity with loyalty members specifically targeted and rewarded to dine more often based on their past dining activity. (Rewards Network)

9 The Rewards Network Member Experience of our members believe our program is easy to understand. 80 % 23 % + $ $ Our members spend an average of 23% more than non-members at program restaurants. Chooses rewards program that interests them 91% of our members have interest in earning currency with their program Registers at least one debit or credit card with program Average member registers three cards with the program. Receives promotional and marketing information from Rewards Network 88% 91% of members regularly use our websites or s to find restaurants. of members actively search for restaurants on the program. Reports created from customer feedback provide restaurant with necessary data to review program performance, analyze competitive benchmarks, and more Reviews dining experience and completes post-dine survey to provide restaurants with valuable feedback Over 12 million surveys filled out to date Dines at program restaurants, uses registered card to pay and automatically earns rewards of choice $

10 To learn more about the Rewards Network dining loyalty program, contact Cheryl Parsons, VP National Accounts, Rewards Network at , at or visit