FoodTec Solutions

Loyalty on Mobile: The New Restaurant Currency

Loyalty programs have come a long way – from the Betty Crocker box top coupons, to punch cards at your local small business, Frequent Flyer programs, to Starbucks rewards and everything in between. The way in which loyalty is administered has been defined and re-defined over time, although the playbook for its success hasn’t changed much. Businesses reward customers for spending a certain amount, usually in the form of points which they can redeem against discounts and rewards at a future date. In essence, businesses use loyalty programs as a way to retain their loyal customers and secure repeat business.

And as any shrewd business would know, repeat customers are incredibly valuable and there’s an almost endless supply of data to back it up. It costs a business 5-10x more to acquire new customers and according to Adobe, repeat customers buy nearly 30% more items per order than first-time shoppers, are 9 times more likely to convert than first-time shoppers, generated three to seven times more revenue per visit and not only are they spending more, but they’re also much more likely to return with every purchase. Having a loyalty program seems like a no brainer.

However, research shows that the average American household participates in 22 rewards programs but only 9.5 of those accounts are somewhat active. The biggest problems with loyalty program participation is a user forgetting they’re members (40%) or forgetting the card (43%). Basically, card-based loyalty programs no longer work for most consumers and instead they want to move away from cards and into their mobile wallet.

An Urban Airship study, entitled The State of Mobile Wallet Marketing, found that 69% of consumers are more likely to use a mobile loyalty card when it is on their phone, especially true for millennial’s (82%), with 73% of consumers more likely to join a loyalty program if points and rewards are automatically updated and visible on mobile loyalty cards. In addition, 81% of Millennial’s are more likely to use coupons if they get expiration reminders on mobile and 54% of those surveyed have already used a mobile loyalty wallet card – and wish brands would use this channel more often.

And it makes sense. People always have their phones with them. There is no doubt that consumers do love rewards, but mobile has influenced how they want to engage with loyalty programs. Instead of the traditional loyalty cards, consumers want to engage via mobile. They want fast, simple, and efficient experiences, with more personalized offers and communication.

Loyalty programs are a superb asset for the food industry to drive repeat purchases and increase advocacy simultaneously. By mobilizing loyalty, businesses can create additional opportunities to engage, recognize, and reward their best customers while at the same time capitalizing on the massive potential mobile has to offer.