Loyalty Programs (page 3) 

The Arithmetic of Rewards

Whilst I cannot give you specific advice about what rewards are going to work with your customers I can offer up some guidance on how to calculate what is a reasonable level of reward to offer your loyalty program members.

If it’s a food based offering, base the reward on your average order value. For instance your pub’s average food spend per head is £7.00, therefore the point at which a loyalty reward can be redeemed should be when the customer has spent ten times the average. The customer has to spend a minimum of £7.00 ten times to receive their reward, which should be a menu choice priced above the average spend, you can always limit the reward to specific dishes. For instance, you might be prepared to give away a deluxe burger priced at £8.50, but unwilling to give away a steak dinner priced at £13.00. It’s a great way to get customers to try the more expensive items on your menu and encourage them to “up-spend” next time they dine with you.

For a drinks based offering follow the lead of Castle Rock, eight purchases brings one equivalent reward, you dictate reward the customer can choose from (it’s best to offer up at least two things for the customer to choose from).

Form a Real Ale Club, as I have done in the past, where the members have to partake of all the guest ales in a specific rotation, with proof of purchase stamped on a collector’s card to claim a reward. For instance I regularly ran 20 guest ale rotations over six week periods. The club members got one pint for accumulating the first 10 ale stamps, another pint for the second ale 10 stamps. If they missed a particular ale, they didn’t get the stamp, if they managed all 20 ales they got an additional free pint. It’s a great way to make sure your cask ales turn over quickly too and the customer can easily reach the redemption point.

This mechanic can be just as easily used for a wine club, whiskey club or cocktail club, it all depends on what your pub offers.

Using Members’ Information

Apart from the obvious reason of offering incentives to customers and general trade building the main reason to offer a loyalty program is to enable you to more effectively market your pub to your customers. For example with my Real Ale Club, once every six weeks I sent out a newsletter, telling members about the next rotation, with tasting notes and details of events such as “meet the brewer” evenings, pie and pint promotions, beer festivals and national events such as National Cask Ale Week. One of the aims of any successful loyalty program is to gather consumer data, so make sure you use every opportunity to gather and record customer information and then tailor your rewards to their needs, even basic information such as gender and age will enable you to focus your pub marketing. (Don’t forget once you collect customers’ details and use them for marketing and loyalty programs you must abide by the Data Protection Act).

Getting Them Signed Up

Your staff are your greatest asset in establishing and increasing your loyalty scheme membership. You have to train staff to ask every customer if they are a member or want to become a member of your scheme. Your staff need to know how the scheme works, what benefits members accrue from membership, how quickly reward points accumulate and how they can be redeemed. Just as you might incentivise your staff to sell more desserts, so you can reward those who sign up the most members over the period of a membership drive. If the reward for staff members is sufficiently attractive (I find cash is always a good motivator) you’ll be surprised how quickly your membership list will grow.

Top Tip – A word of caution on “membership drives”, don’t do them too often and don’t do them over extended periods of time, as continual pestering by your highly motivated team could irritate customers and turn them away from your business.

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