How to use your loyalty program as an acquisition engine

Think about using your loyalty program for another objective.

Most restaurants and retailers seem to use their programs to react to their immediate business situation by doing things like filling in lower demand periods, recapturing lapsed users, or upselling on a current order.

All of which are fine.

I think there is more long-term revenue to be made by intentionally building out use from additional dining occasions.

This means you need to know the types of dining occasions for which you want to compete and why you should be a good choice for those.

For many concepts, there will be three to five. These are expressed in customer rather than operator terms. For example, “a fast meal that is made fresh for me, is customizable, and is healthier” versus “lunch on-premise.”

With your occasions in hand now your goal is to capture as many visits across each occasion as possible. That’s how you leverage your loyalty program into an ACQUISITION program.

Assuming you know those key occasions for which you want to compete (and how you will uniquely deliver), identify those customers who use your company across multiple occasions.

See if you can identify commonalities or triggers that made them users on multiple occasions.

Is there a typical sequence someone moves through as they move from one to two to three and so forth occasions?

Begin to build test campaigns to see if you can build this behavior in those segments you identified that are not yet using you for multiple occasions.

If you want to use discounts, this can be a great place to test and see if they create use. I’d be much more comfortable discounting to get used for a new occasion rather than margin dilution on a visit I would have likely already gotten.

All of the insights that come from a loyalty program and the lower cost means of reach make loyalty programs appealing.

But if you want to extract the best long-term ROI from your program, make your “loyalty” program synonymous with acquisition.



Screen grabs from a recent Cardlytics report on loyalty programs that underscore points made.