Loyalty programs keep customers in the know, and keep restaurants full
Sacramento Business Journal – by Mark Anderson Staff writer
Restaurants and hotels don’t just want you to enjoy your visit, they want you to join the club.
More restaurant operators are finding that the way to lure cost-conscious consumers back to the dining room is by making them members.
And as the long-lived American Express ad campaign said: Membership has its privileges.
“Tough times breed creativity. You’ve seen that time and again, and you are seeing a lot of creativity right now,” said Mike Testa, spokesman with the Sacramento Convention & Visitors Bureau.
A lot of consumers are struggling financially, but they still want to go out and have a good time, Testa said.
By offering customers a deal, it creates a bond with the restaurant.
“You see that in the hotel business. People scratch each other’s backs, and they build loyalty,” Testa said. “If you are good to me, I’ll be good to you.”
Businesses that go out of their way to help out their customers reap the benefits of long-term loyalty, Testa said.
“There are a lot of people who will only stay in one brand of hotel because they have the loyalty plan with that hotel,” he said.
One of the older restaurant loyalty programs, the Fiesta Regional offered at Il Fornaio restaurants, dates back about 15 years.
The program begins twice a year, offering members a, “passport”, a cardboard booklet that looks somewhat like a passport. It has space for stamps for each of the six regions from which the restaurant’s chefs prepare a special menu. People who get a region stamped get a free gift on that visit, and customers who get every region stamped get a $20 gift certificate.
The free gift has ranged from custom plates representing the region being highlighted to gifts from Il Fornaion’s retail selection, such as special olive oil, bread mixes, gifts sets and even clothing.
Sign up, check in, get back
Mikuni Japanese Restaurant and Sushi Bar has had its Koki Club frequent diner program for about six years. The membership allows customers to redeem points for gift cards, as well as find out about specials, incentives and new menu items, said Derrick Fong, chief executive of Mikuni.
Koki Club’s 30,000 members get a swipe card, so points and rewards are automated and easy for the customer and the restaurant to track.
The frequent dining program rewards Koki customers, not only with Mikuni rewards, but also with offers and discounts at other businesses’ even some other restaurants.
“It’s our way of showing our appreciation of frequent diners,” Fong said. “And by adding the other businesses’ there are about 40 of them, it makes it a little more fun.”
Enotria Restaurant and Wine Bar routinely sends out e-mail blasts to its customers informing them of specials, fixed-price meal options, wine pairings and ongoing events such as Wednesday Neighbor Night.
The restaurant also recently started a frequent diner program for people who subscribe to the e-mail list. In that promotion, the diner gets $10 off the bill the first time returning to the restaurant, $20 off the second return visit and a free wine dinner on the third return visit.
The restaurant, which also does retail wine sales, is developing a wine club with online shopping.
“They are just things that make you feel special. These are just small things, but customer service is all about doing the small things,” said Susan Barry, general manager of special events at Enotria. “The hospitality industry is not about meeting the needs of people. That is a given. People expect good service, everything to be clean and done well. It is in exceeding their expectations that people feel special.”
The Paragary Restaurant Group uses e-mail blasts to send special deals to members of its iEats Exclusive club, a system it set up in house a couple years ago.
The offers are things like $20 or $30 three-course meals at the restaurants the company operates, such as Paragary Bar & Oven, Spataro, Esquire Grill and Centro Cocina Mexicana.
“They do really well for us, and we can track it,” said Callista Wengler, head of marketing for Paragary. The system is up to 18,000 subscribers. In a recent week, it drove $12,000 in sales for one of the promotions.
In the iEat program, patrons call the restaurant to reserve a table and leave the reservation code “iEat.” The specials are typically good for Sundays through Thursdays, which are slower times for restaurants than the weekends.
In addition to offering specials, the iEat program entices the members with the menu selections available for the meal. It usually has a few special appetizers, and a choice of two or three main courses, with detailed descriptions.
“The description is really important. It helps paint the picture,” Wengler said.
Service brings them back
Grange Restaurant & Bar, in the ground floor of The Citizen Hotel, has its servers present diners with a guest book at their table. If the customer fills it out, the waiter then handwrites and mails a thank-you card to the person. And the next time the person has a birthday or an anniversary, Grange sends out a $20 gift card, said Troy Christian, general manager of Grange.
“To get a handwritten card in the mail is unusual these days. And then months later you get a gift card in the mail when you have probably forgotten all about it, and that really brings people a sense of service,” Christian said.
Grange also has a range of promotions. One wildly successful one last year was a “Follow the Chef Lunch,” where a group of people could go shopping at a farmers market with the chef, and then watch the chef prepare, cook and present the food.
“That is a promotion, but ultimately, it does build loyalty,” Christian said. Some people kept coming back to the program, and bringing their friends with them. The promotion sold out the entire time it was offered. It will be returning later in the spring, and the restaurant is trying to find a way to allow more people to attend. It had been limited to 12 people and then 20.
Another big factor behind promotions is to draw people into a restaurant who otherwise might not go.
Denny’s Corp. restaurants in a commercial aired during the Super Bowl offered anyone a free Grand Slam breakfast at any of its restaurants a couple days after the game.
In some markets, the offering got local media attention because people lined up around the restaurants, but more importantly, the offer got a lot of people into the restaurants. Denny’s has done two major remodels to all its restaurants in the last decade, and for a lot of people, their perception of a Denny’s might be 20 years old.
“The power of promotions is they get you in the door,” Testa said.
Disney Corp. had a promotion through December 2009 that let anyone into its parks for free on his or her birthday.
“It’s not just small or large chain restaurants, Disneyland is a giant corporation, and they are offering a promotion to show their customers that they are doing something for them,” Testa said.
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