Best Way to Win Millennials – Loyalty Program

A restaurant loyalty program can boost your business by 35% and develop better engagement with your customers.

Mobile applications are the main media for promoting restaurant loyalty programs. According to the National Restaurant Association, 30% of all restaurants have some kind of loyalty program or another, and research shows that 57% of adult customers tend to visit restaurants with good loyalty programs more often than other places.

A study on award programs done by Loyalogy, leading provider of loyalty program analysis, confirms that loyalty programs can increase customer visits by 35%. The chart below shows the result of that study.


We can see that this is an efficient method of restaurant promotion and should have a special place in the marketing campaign of your restaurant.

Specifics of Restaurant Marketing

There are three basic customers in the restaurant industry:

  1. Unhappy customer – a customer who will leave a restaurant, unhappy and dissatisfied, and look for another restaurant to satisfy his needs
  2. Satisfied customer – a customer who is happy and satisfied with your services, but is open to look for a better opportunity
  3. Loyal customer – a customer who will visit your restaurant regularly irrespective of the competing restaurants

The goal of any restaurant would be to turn the satisfied customers into loyal customers. The best way to realize this goal would be through loyalty programs for your customers, who are millennials.

What does a restaurant loyalty program do?

  • Gives your customers an incentive to visit your restaurant again
  • Helps improve your relationship with your customers
  • Builds your customer database
  • Provides you with the possibility to reward your loyal customers
  • Builds a brand for your restaurant and business
  • Puts your restaurant among the top ones in the restaurant competition
  • Increases the frequency of your customers’ visits
  • Helps you make more money

The first step to administer your restaurant loyalty program is to install a point-of-sale (POS) system in your restaurant. An integrated POS system is the best way to collecting and analyzing customer data, upon which successful loyalty programs are built. The tricky part is knowing which loyalty program is the best one for you. These five tips will ensure that you meet the needs of your customers, regardless of which loyalty program you use.

  1. Types of loyalty programs
  2. Don’t focus just on monetary rewards
  3. Listen to customer feedback
  4. Actively engage with loyal customers
  5. Provide mobile access for loyalty programs

Types Of Loyalty Programs

Before you start a loyalty program, you need to understand the preferences of the millennials.


Based on these stats, we can confirm that a loyalty program combining the first two is the most likely to be popular among customers.

Earn points for ₹ spent

Loyalty programs that enable your customers to receive loyalty points conveniently and quickly. These points can be awarded every time they visit your restaurant and/or order food for home delivery.

Receive discounts

Certain loyalty programs can give out direct discounts to customers, but you can also combine the first two. The points accrued for visiting the restaurant and spending money at the restaurant can be gathered and used as discounts on future purchases.

No matter what loyalty program you choose, make sure they increase your revenue and not drain it.

Don’t Focus Just On Monetary Rewards

When choosing your loyalty program, you need to think beyond just your revenue and think about the impact it will have on the shared values of your customers. You can associate your brand with causes that many of your customers support encouraging them to join your loyalty program. It can be anything from using organic ingredients to standing for a social cause. This will achieve the bottom line and help reduce the monetary rewards you need to offer.

Various studies show that monetary rewards may not be the best way to encourage loyalty. Restaurant owners can use exclusive rewards, such as reservations to a grand event or a members-only special dinner. These are effective ways to cultivate the unique brand relationship that millennials seek.

Listen To Customer Feedback

For a loyalty program to be successful, both you and your customers must be actively participating. You and your staff must listen intently to the needs and desires of your customers. Millennials love to provide feedback, so all you have to do is ask for it. Millennials are active social media users, and you can request them to leave a comment or recommendation for your loyalty program via Facebook or Twitter.

This chart will perfectly depict the importance of actively listening to your customers.


These stats show that millennials quit loyalty programs because they believe that the offered discounts and rewards are not valuable enough. This goes to show the kind of information you can gather just by asking your customers for their feedback.

The most effective way to gather this information is a survey or a poll. You can send targeted emails with attached surveys to loyalty members. You can even incentivise them by offering extra points or some other non-monetary rewards. These surveys can help optimise your loyalty programs and keep your customers coming back.

Actively Engage With Loyal Customers

Gathering members to your loyalty program, although difficult, is not where the real value of the program lies. The real value lies in the skill to sustain the engagement you got through your programs. The following are the factors that encourage customers to participate in any loyalty program.


The data shows that the faster customers can earn points, the more it drives them to participate in the restaurant’s loyalty program. Thus, an effective way to further push customers to participate would be to offer a reward for enrollment and/or for their first visit to your restaurant as a loyalty member.

The theory of ‘Goal Gradient’ is effective in keeping your customers engaged with your restaurant programs. According to the theory, after a customer’s first visit, the restaurant can offer him triple the normal points. This takes him closer to a reward, which has been scientifically proven to prompt him to return even sooner to the restaurant.

An alternative method to this would be to place your customers under various loyalty tiers based on their points. This provides them something to work toward, along with an element of gamification where the customer gets to “level up” every time he gains points. This helps him increase his points and incentivizes him to visit the restaurant more often. You can also offer your customers a way to check their points and see how many more they need to upgrade.

Provide Mobile Access For Loyalty Programs

It is no secret that mobile is king for today’s generation. Most millennials prefer to use online applications to earn, track and redeem their loyalty points. If you are creating a loyalty app, either by yourself or by a third-party, it is imperative that you know what functionality your customers would like installed in the app.


Whatever app you decide to go with, make sure that these functions are available for your customers. It is also better to equip the app with loyalty enrollment as well. That will help streamline the sign up process and make it easier for the millennials to join your program without involving your staff. Your staff should also be well-versed with the loyalty app as they are the ones that customers will turn to if they have any questions.

To recap, make sure you have a fully functional POS system in your restaurant before enforcing a loyalty program. It is essential for managing and analyzing customer data, and also enables you and your staff to provide a greater customer experience by keeping your daily operations well organized. Strong customer experience is the foundation of any successful restaurant, not to mention its loyalty program.

If you are interested in a POS system that can help you do all this and more, call 1800-212-1122. You can also visit our merchant page for more information.

Shalini Prasad

She has been a content specialist for more than four years. She is a passionate reader and loves to read about Science, Philosophy, History and Psychology. She also enjoys sci-fi books and general fiction.

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