Third-party delivery and guest loyalty programs may be undergoing a major change, according to attendees of this week’s TechTable conference.
Several of the mega-forces shaping the restaurant business are set for a near-term change in direction, predicted participants at an industry event this week, citing third-party delivery and guest loyalty programs as particularly likely to veer sharply.
Here’s what they foresee for those sales drivers.
The restaurant loyalty card is dead
Lettuce Entertain You Enterprises, Rich Melman’s model multi-concept operation in Chicago, had overcome a host of challenges to develop a single loyalty program for regulars at any of its 120 restaurants and 65 brands. Patrons were even willing to pay a $25 charge to enroll, which they could only recoup by dining in an LEYE restaurant at least three times.
But management detected a problem, and it was a biggie: “The average age [of members] was 47,” recalled Jennifer Bell, EVP of marketing and a partner in the firm. “It had been 47 for some time, and we had opened all these cool places for young people.” Its card-carrying loyalists weren’t the customers it was hoping to win and keep with each opening.
The company decided to jump to a new generation of loyalty program, a setup that would appeal to consumers accustomed to dealing with apps. It began the process of luring patrons to that new platform, an endeavor Bell described as dauntingly expensive. Servers were offered a $5 commission for every person they convinced to download an LEYE loyalty app. Bell also worked with Facebook to identify would-be members and solicit their enrollment.
It also discovered that patrons were more likely to redeem their discounts with an app. Some users of the LEYE loyalty card had run up credits of more than $1,000, but didn’t even realize it because the process for checking balances was complicated. With the app, the discount is instantly accessible and ready to be used.
The tough slog was worth it, Bell attested at TechTable. “Our app now has almost 300,000 people on it. We started with 7,500,” she said. And the average age of loyalty program members has dropped to 38.