Restaurant Loyalty Program Ideas and Incentives

In today’s modern, fast-growing restaurant industry, punch cards just aren’t going to cut it. But customer loyalty is essential in order to run a successful restaurant in 2024. Since it can be costly to acquire new customers, retaining customers is a crucial way to maximize profitability. On average, loyal consumers are likely to spend up to 67% or more on their trusted brand than new customers. It's important to delight these top customers and keep them coming back. 

Loyalty programs can help you maximize customer lifetime value by increasing average check size and driving repeat business. In this article, you’ll learn how to get your customers to sign up and become lifelong loyalty program members. 

Ready? Let’s dive in.

What is a restaurant loyalty program?

Customer loyalty programs are a great way for restaurants to keep their customers coming back, and keep them happy. Guests can sign up for a restaurant's loyalty program, and the more times they visit, or the more money they spend, the more perks they get, from free appetizers or drinks to coupons or merch.

Customer lifetime value (CLV) is a metric used to estimate the amount of revenue a customer will generate over their lifetime at your restaurant. CLV is composed of a number of different variables, including average ticket size, average visits per year, average party size, and your restaurant's profit margin. We’ll dive into several different ways you can maximize customer lifetime value through loyalty programs.

How to get more signups to your loyalty program

Engaging customers through your loyalty program is crucial to its success: if the incentives aren’t good enough, no one will sign up! But increasing customer retention by 5% can increase a business’s profitability by an average of 75%, so there’s tremendous opportunity in cultivating a strong base of loyal customers. Below are five ways to get more signups for your loyalty program and increase brand loyalty. 

Invest in Customer-Facing Tablets and Terminals

Handheld devices and POS terminals that are customer-facing allow guests to be easily prompted to add their email address and personal information. By offering a simple ‘opt-in’ checkbox, you can capture new loyalty members during their dining experience. 

Email Newsletters

Email newsletters are a great way to reach guests who have already agreed to share their personal information. In a newsletter, you can call out the incentives of your loyalty program to encourage adoption. Make sure to mention perks like your mobile app, birthday rewards, and gift cards in your email newsletters to keep customer engagement high.

Digital Receipts

Digital receipts create an easy way to capture the necessary information to enroll an existing customer into your loyalty program. By getting phone numbers and email addresses upfront, there should be limited additional information needed to opt into the loyalty program, which will increase the likelihood that they sign up.

Tie Credit Cards to Rewards Accounts

Connecting reward accounts to credit and debit cards will mean guests do not need to present a physical loyalty card or account number. Instead, anytime they swipe their card in-store, they receive loyalty points. 

Reward Tracking on Smartphones

Providing an accessible way to track rewards will ensure customers know when they are close to unlocking a new incentive. 60% of consumers in the U.S. who belong to loyalty programs say they do so for the special offers that aren’t available to others. Think about it - if you’re about to unlock a loyalty reward, it’s easy to justify that extra side dish. An app that gives guests points for every mobile order is an easy way to increase customer loyalty to your restaurant brand.

How to choose restaurant loyalty incentives

Balancing providing great incentives with maintaining (and increasing!) business profitability is a key aspect of a successful loyalty program. It's important to calculate the cost of each incentive to ensure it’s appealing without eating into profitability. Programs like Toast Loyalty provide valuable guest data to analyze and make tweaks to your loyalty offerings. 

Best loyalty program incentives

It’s important to find the right loyalty program incentives that align with your business. Guests enjoy freebies, and you enjoy profits- it’s essential to find options that’ll suit you both. Below are five incentives that can be very successful for restaurants of all types. Some are built on a restaurant point system, and others are rewarded for special occasions. 

Welcome drink

A welcome drink for new loyalty customers is a great way to encourage first-time sign-ups. Once these customers are within your loyalty network, they can work to unlock point-driven rewards. If your cocktails are on the pricier side feel free to offer a free food item instead.

Free appetizer on your 10th visit

Benchmarking a reward on a number of visits encourages repeat dining, and, as we know, repeat customers spend more than new customers. If your appetizers are on the pricier side you could easily switch the reward out for a free dessert or any other low-cost free item.

Discount on a meal

Setting a certain percentage off a meal, or certain menu items in exchange for a high number of reward points is highly valued by guests. Guests will likely spend more, and may also be more likely to invite others who are new to dining with you. 

Free delivery

Offering a free delivery code in exchange for a certain number of reward points can be an appealing offer for loyal online customers. It can also be a useful tactic to make on-premise regulars into off-premise guests as well.  

Free branded tote bag, hat, or coozie

Branded merchandise in exchange for loyalty points is a great way to both show your appreciation for loyal customers as well as maximize on free marketing. Let your customer base model off your merch!

For more information on other restaurant revenue streams and merch check out this article.

Get the right restaurant loyalty system

When exploring loyalty programs, it's important to find one that is easy to use, flexible, and affordable. Toast offers an intuitive, integrated rewards program that works hand-in-hand with your POS. Plus, you only pay one flat fee per month, so you don’t have to be surprised by hidden costs. Three key benefits of Toast Loyalty are: 

Toast Loyalty offers a program that is easy to join, and seamless to use. Toast loyalty provides a variety of channels for guests to sign up, such as through POS systems, online ordering, and external links. Additionally, everytime a loyalty guest swipes their credit card, they automatically accrue points that are recorded through their phone number, email address, or loyalty account. This way, guests don’t need to carry around loyalty cards or remember account numbers.

Toast Loyalty integrates with other Toast products which allows you to unlock even more ROI. By utilizing a loyalty program that integrates with your POS, you are able to maximize the offerings of your tools. Toast loyalty will track when a customer is close to unlocking a new incentive. Products like Toast Go 2 will notify staff so they can encourage the customer to spend more to reach that reward.

Toast Loyalty provides a snapshot of guest data, which creates useful learnings to maximize your program's value. Loyalty guest reporting will show who your regulars are, what their order history is, and will allow you to connect with guests on a personal level. In addition, loyalty data can provide insight into what rewards are working, what rewards are not, and how you can improve on your marketing and retention strategies to get the most out of your loyalty program.

To determine the value you could drive with Toast Loyalty, calculate your loyalty ROI through Toast’s loyalty program calculator (based on real sales data from Toast restaurants). To learn more about Toast Loyalty, watch this short demo video. 

Keep Your Customers Happy and Keep them Coming Back

At the end of the day, you want to create a customer experience where guests feel connected to your restaurant — where new customers turn into regulars and repeat customers feel recognized and rewarded for their loyalty. A customer loyalty program is a tremendous tool to drive your business in the short term as well as the long term, and the payoff will be quickly evident as your loyalty network expands. Build those relationships with your community today by finding a loyalty program that works for you.