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How can restaurants and cafes use data to identify and reward their loyal customers?

How the hospitality industry can increase customer loyalty

Even though restaurants and cafes don't typically have membership programs like retail businesses do, it doesn't mean it would be impossible for them to identify their loyal customers.

But before we get into how that can be done, let's discuss why this is important.People can choose to frequent a cafe or a restaurant for many reasons. In most cases, however, it eventually comes down to these three pillars: the quality of food and beverages, the ambiance of the space, and the quality of the service.

Sure, with enough luck, if a customer thinks that a particular cafe serves the best carrot cake in the world, it alone might be a reason enough for the customer to keep coming back, but if the staff is unfriendly and the atmosphere noisy, the whole customer relationship is built on a very fragile foundation, and the customer is more likely to switch to a competitor at some point.

Actually, almost every other consumer would stop supporting a brand after several bad experiences, and as many as one in three would walk away after just one negative incident.

It is therefore important to ensure all the three pillars are solid, and then start looking for business opportunities in returning customers.

It is important to remind that frequency of visit is not automatically a sign of loyalty – or in other words: Only a customer who feels genuinely connected to your business won't leave you when they find someone a bit cheaper.

So how exactly can restaurants and cafes identify and reward repeat business, improve customer satisfaction and further, how can they turn frequent customers into loyal ones?

Get to know your customers better with data

As an actor in the hospitality industry, collecting data is probably already a part of your everyday practices. Do you track, for instance, how many times a dish is sold during a day, what are the popular times when people visit you, what is the average ticket cost, and so on? 

But have you ever thought how well you actually know your customers?

The next step is collecting more detailed first-party data, says Alice Stratton, a global managing director at a data connectivity platform LiveRamp. First-party data is data a customer has opted to share with your business. According to Stratton, this is typically done through offering a discount in exchange for an email address or including login information for a restaurant app.

While this may give you decent insights to the behavior of an individual customer, you still need to figure out what to do with this information.

Use data to provide personalised experiences

People already know to expect monetary benefits from loyalty programs, so focusing in customer experience can be a real brand differentiator.

Customer experience influences purchasing decisions especially in restaurants and hotels, where 74% say positive interaction is an important factor in the decision-making.

Personalised experiences can mean, for example, remembering what a customer has ordered previously or what their favorite dishes and drinks are. It sure feels nice to walk into the cafe around the corner where the staff remembers just what you usually order, doesn't it? With digital solutions, this information can be stored in the system and automated to predict when the next visit would possibly take place.

Let's say I would visit my local cafe every Friday afternoon and order a latte – and every now and then a slice of carrot cake on the side. By tracking this behavior digitally, the cafe could send me a discount offer on evenings when there's carrot cake left, about to expire. I would feel special and probably swing by the cafe on my way home to enjoy this special treat.

However, don't forget that trust is still the most important currency when it comes to dealing with personal data. According to PwC, eight in 10 consumers in the U.S. say that their willingness to share personal information depends on how much they trust a company.

Lastly, remember that technology is only a tool, not a solution. Most of us still like to have some kind of human element in the experience – especially in case of trouble. When seeing technology as an opportunity to complement the human-to-human interaction side of customer experience, you can differentiate yourself from competitors, delight your customers – and increase their loyalty.

How to get a more complete image of your customers? Solutions like ClowID can help you to get data from more of your customers than just the ones in your loyalty program, while letting them remain completely anonymous – thus increasing their trust.

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