Episode Summary

On this episode of Restaurants Reinvented, we’re talking all things restaurant loyalty with two top loyalty experts — Diane Le from Punchh and Olga Lopategui from Ollo Consulting.
Both women (who happen to be new moms) agree that loyalty programs have changed a great deal in the last several years. Today, the emphasis in restaurant loyalty is all about creating a one-to-one relationship with the customer. If you personalize your marketing to them and show that you care, it goes a long way to enhancing the experience and purchasing behaviors.
Punch cards are nearly a thing of the past — though that was the inspiration behind the Punchh name — and instead, Diane says good restaurant marketers use technology and all the data that comes with it to create a personal relationship whenever they acquire a new customer.
“Restaurants used to have no data and now they have a flood of data …  often they don’t know what to do with it. After I left the corporate world, I made it my joy and passion to help restaurant brands make use of that data for smart marketing,” Olga says.
Olga and Diane discuss their top tips for marketers and brands (which include what tech trends to stay on top of), the most important loyalty metrics to track and the importance of focusing on the customer experience. 
“Even though we’re layering on all these things, like data and machine learning and all of the stuff, keep it within the heart of a marketer’s role — which is to make a great customer experience,” Diane says.


🍽 Name: Diane Le, Account Director
🍽️ Company: Punchh
🍽️ Key Quote: “Your frontline staff and your operations team can make or break your loyalty program,” she says. “If they’re bought in and asking every guest: ‘Are you a member of this awards program?’ The program is going to soar. If they’re not bought in … they can kill it.”
🍽️ Diane on LinkedIn
🍽️ Name: Olga Lopategui
🍽️ Company: OLLO Consult
🍽️ Key Quote: “If you consistently communicate with [guests] about things that matter to them, then your probability of building that connection with them is much stronger and their probability of loving the brand and coming back is much higher.”
🍽️ Olga on LinkedIn

Key Insights

🌶️ Loyalty programs are so much more than just points.
It’s time to change your mindset around loyalty from Transactional to Relational. A good loyalty program, Olga and Diane agree, not only addresses consumer wants, it connects them directly to the brand so they feel truly understood—ultimately building an unbreakable bond.
🌶️ Loyalty is really about Smart Marketing.
If you think of your loyalty program as a program that makes customers more loyal, you’re expecting too much out of it. But if you frame it as a “this is the program that helps me learn about my guests and market to them smarter and cheaper,” then you’re setting yourself up to get more out of it as a marketer.
🌶️ You can’t have a loyalty program without technology — but don’t lean on it too much.
SMS is all the rage: “People can literally text one word to a five-digit number and can join the loyalty program like that,” Diane says. But it’s worth keeping in mind that SMS is also one of the loyalty programs people opt out of the quickest, which is why you need to market to customers through several channels rather than relying on the latest tech trend.

Episode Highlights

Start with the customer experience and relationships.
Loyalty at heart is always about the customer experience and those relationships. So start there…. If you were just a manager at a store, how do you want to treat your best customers? How do you want to treat your new customers? And then take that experience and digitize it.
Always think through, what do you want to do for your own customers? And then work with your technology partners and loyalty consultants to build that.
The loyalty team members you need.
To be successful, your brand’s loyalty program needs a solid team including:
  • An executive sponsor for buy-in at the very top that says, 
  • A technical IT person to help advocate 
  • At least one Marketing person. We [at Punchh] generally recommend two marketing people. So one is generally a product manager or product owner or someone who’s going to own the loyalty project and think through the big picture strategically – like a VP of Marketing or Manager/Director.
Use Data & Segmentation for Smart Marketing.
Start by using whatever data you have to provide a more personalized experience. Look at how you can segment your data to be more relevant with guest — look at your most popular products and purchasing patterns.
What Can Kill Your Loyalty Program?
Your Operations team and in-store staff need to be fully on board and versed/well-trained on the loyalty program goals and objectives. Employee motivation and training is so important when rolling out a new program. Marketing and Operations need to be in lock-step on this.
The most important loyalty program metrics
The top three are always:
  1. Participation rate, as a percentage of your overall sales. 
  2. Visits. You want to make sure that overtime the visit rate is increasing. 
  3. Spend lift. So how much is someone in a loyalty program spending as compared to those who are not in there? All the data comes from your POS. … ROI is always how much more does a loyalty member spend versus a non loyalty member?
“…a good metric, if you’re starting off, is to aim for 10% participation rate. So one in every 10 people who walks in, they should be a loyalty member. If you can get to 20, 25%, you’re in great shape, because that means one in every four or every five is a loyalty member. … really successful programs have like 40, 50, 60% participation,” says Diane.
The Future: AI & Machine Learning
AI and machine learning is the future of loyalty programs and marketing in general… being able to close the loop to understand — how is my marketing affecting my consumer — not just through the loyalty channel, but also adjacent channels, using loyalty and non loyalty in different ways. “So understanding how all of this fits together and how your marketing dollars work, that’s really one of the more exciting parts.”

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