Overview
Loyalty has come a long way since the stamp card, and hospitality operators now have many sophisticated, digitally-enabled loyalty options available to them. Before committing to any loyalty programme, ask yourself the following questions:
Will the scheme increase frequency of visit, and/or basket/check size? If not, you’re just reducing the cost of product that your customers would have bought anyway, eroding margins.
Will the scheme give you information about your customer? If so, what will you use it for? Most consumers are comfortable with the idea of sharing some of their data to get something in return (like money off). But the data needs to be relevant and actionable. So maybe you find out how often your customers visit. What will you do with that information to boost sales? If the answer is ‘give away product’ (or discount), is the data you get worth the investment in lost margin?
Can I get this information from another source? Your in-store Wifi provider, and credit card processing company, or even your local business improvement district, can all be rich sources of data about who comes to your venues, without your needing to offer a loyalty programme.
Critical functions
If you do decide that a loyalty scheme is right for your business, these are the sorts of things you need it to provide:
Rich customer data, potentially brought together with other sources like merchant acquirer data, to give actionable insight
Data on your product performance, e.g. basket/check size and composition (you should already know your best performing products, so you don’t need a loyalty scheme to tell you this - despite what many of them will tell you!)
Powerful reporting functions to enable the data to be used
A seamless user journey to ensure uptake and compliance
The ability to identify opportunities in real time, perhaps using machine learning
The ability to deliver highly targeted, perhaps even personalised, campaigns
Important integrations
Most loyalty schemes are enabled by an integration with either the POS system or the card payment system. For example, if your scheme is delivered by the customer showing a QR code at checkout, your POS system will need a customer-facing barcode scanner to capture this.
The rich data generated by a customer loyalty scheme is very valuable - to you, to the scheme operator and to your competitors. You’ll want to ensure you get the most value from it by ensuring it can be captured in your customer relationship management system (or potentially a data warehouse). But keep in mind the impact GDPR has had on your ability to gather, transfer and keep personal data. Even if the system you buy claims to be ‘GDPR-compliant’, your own staff may cause a breach (and risk a serious fine) by taking data out of a compliant system.
Users
Your customers
(Possibly) your frontline staff - though some schemes can be delivered without staff involvement, or even knowledge
Marketing team, for developing campaigns
Finance team, for reporting on outcomes and monitoring impact
