Home Restaurant Understanding next generation loyalty for restaurants in 2023

Understanding next generation loyalty for restaurants in 2023


Next gen loyalty programs are a smart, effective way for restaurants to stand out and build a stronger connection with guests. These creative, personalized loyalty programs use tech and customer data to create an experience that goes way beyond discounts.

Well-designed loyalty programs can help restaurants attract guests and encourage repeat visits. But traditional rewards programs based on points or punch cards may not be enough to earn customer loyalty in 2023. Next gen loyalty is a fresh, creative approach that personalizes and streamlines the customer experience.

Quick Links
Why loyalty programs need an update
What is next generation loyalty?
Styles of next gen loyalty programs

Why do loyalty programs need an update?

Traditional loyalty programs based on spending or frequency of visits can help boost revenue and encourage customers to come back. But statistics show that people want more out of restaurant loyalty programs.

The average person belongs to more than 14 loyalty programs. However, 65% of consumers engage with fewer than half of those programs. The same Forbes article notes that more than 90% of businesses offer some kind of loyalty program. That means it’s even more important for businesses in highly competitive industries like hospitality to stand out with loyalty programs that go above and beyond.

Loyalty experts have been using terms “next generation” or “next gen” loyalty when forecasting likely trends. A long way from the punch cards of the past, next gen loyalty relies on cutting edge technology to make it easy for restaurants and customers. And ideally, next gen loyalty programs offer perks like unique experiences, personalized recommendations, seamless convenience, and value that goes far beyond discounts.

Rather than rewarding loyal customers, restaurants with next gen loyalty programs work to earn their customers’ trust and loyalty. It builds deeper relationships with greater lifetime value. The result is a more meaningful emotional connection with customers, which can boost long-term revenue.

Using technology can help people get more out of restaurant loyalty programs. | Credit: Getty Images

What does next generation loyalty look like?

Next generation loyalty programs rely on new strategies and the latest technology to provide tailored experiences and attract a younger generation. They may use AI to create personalized restaurant recommendations or streamline the reservation process. Digital tokens like NFTs can take the place of rewards tiers, giving guests access to perks like priority reservations and free menu items.

Other next gen loyalty programs go beyond the free model of traditional loyalty programs. Instead, guests pay a fee to gain access to impossible-to-get reservations at the country’s top restaurants, invites to exclusive events, or other members-only VIP rewards.

Technology

Technology plays a huge role in next gen loyalty. Mobile apps and AI chatbots can offer seamless reservation systems and deliver menu recommendations based on a guest’s past orders.

Digital tools that integrate with POS systems and reservation platforms can store, track, and analyze customer data. You and your team can use this data to deliver personalized treatment and high-level service.

Creativity and innovation

Next gen loyalty spotlights exclusive and exciting experiences. Guests may get access to special events, cooking classes, or personalized wine tastings only available to members. Creating spaces for your customers to connect—not only with your business, but with each other—is another way restaurants can build loyalty with guests.

Image depicts a group of diners using phones at a restaurant table.

Using guest data through a next gen loyalty program can personalize each experience. | Credit: Getty Images

Transparency and trust

The flipside of collecting your customers’ data is storing it securely and using it ethically. Customers, especially younger generations, want to know how their data is being used and the value they get in return. Restaurants should be clear about how they use customer information by spelling it out in messages the customer sees when they share their data.

Collecting data for personalized service

In exchange for sharing their data, guests demand bespoke dining experiences. By collecting and analyzing data, restaurants can understand customer preferences, dining habits, and purchase history.

Restaurants can use that knowledge to tailor their offerings to each guest. Recommendations based on past preferences, special surprises for birthdays, and exclusive menu items can wow customers and make them feel valued.

Ethical data storage and usage

When collecting and storing guest data, privacy and consent are the top priority. Follow data protection regulations and use secure storage systems for customer info. Data should only be used in ways that benefit the customer and enhance their experience. Handling guest data ethically is yet another way restaurants can build consumer trust and confidence.

Image depicts a restaurant worker holding a tablet.

Restaurants that implement gen loyalty programs can improve guest trust. | Credit: Getty Images

Service mentality and high-level hospitality

Using technology to create a smoother, more convenient customer experience isn’t a substitute for the high-level service that defines the best dining experiences. Next generation loyalty programs must be built around warm, welcoming hospitality. Showing guests how much you value them during in-person interactions multiplies the digital benefits of a next gen loyalty program.

Loyalty programs, values, and authenticity

You can have the most cutting-edge loyalty program out there, but it means nothing if your staff can’t walk the walk. That means embodying the values and authenticity that resonate with customers, from your dining room to the restaurant’s social media accounts.

As you’re creating or leveling up your loyalty program, make sure it’s aligned with your business’s brand identity and mission. By designing a loyalty program that reflects your values, you can attract like-minded customers who are excited to support your business.

Image depicts a guest using a tablet to select an order.

Technology plays a huge role in next gen loyalty. | Credit: Getty Images

Styles of next-gen loyalty programs

As with traditional loyalty programs, restaurants can manage next gen loyalty in different ways. Choose the approach that works best for your brand and target audience.

Subscription-based

Believe it or not, your most loyal customers will pay a membership or subscription fee for the right perks. Loyalty programs built around subscriptions can create a stronger emotional connection with guests. The extra revenue can also help subsidize freebies or discounts.

Experiential

Experiential loyalty programs offer unique and memorable experiences for loyal customers. You might give loyal guests access to private dining spaces, invites to special events, or secret menu items.

Gamified experiences

Tapping into guests’ competitive nature can make next gen loyalty programs more appealing and more fun. Gamified loyalty programs include features like earning badges or unlocking higher membership tiers to encourage guests to stay engaged.

The restaurant industry is constantly shifting, and loyalty programs need to evolve to meet changing consumer expectations and help your business stand out.

Next gen loyalty can help restaurants to stay ahead of the competition, build guest loyalty, and provide personalized hospitality that keeps guests coming back for more.



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