How to create a loyalty program for your restaurant

What a loyalty program is (and what it isn't)

A loyalty program is a simple deal with your guests: come back and you earn something. That something can be a free dish after a number of visits, points they exchange for products, or a tier with perks they don't want to lose.

It isn't a permanent discount. A discount goes to everyone, including people who will never return. A loyalty program rewards the next visit, which is exactly the one that's hardest to win. And it gives you something a discount doesn't: you know who your guests are, how often they come and when they stopped coming.

Before you start: decide what you want to happen

The most common mistake is copying another restaurant's program. First decide which of these problems you're solving, because each one leads to a different design:

• More frequent visits. Guests come once a month and you want twice. A visit or stamp program with a close goal works best.
• Bigger checks. Points per dollar spent work best, because they reward higher spending.
• Keeping your best guests. Tiers work best: regulars feel they've already earned something.
• Winning back people who stopped coming. You need their contact details and a way to reach them, so how they sign up matters.

Step 1: choose the type of program

If you're unsure, start with points on spend and a first reward reachable in three or four visits. It's easy to explain at the register and fits any check size. Tiers can come later, once you have active members.

Step 2: work out how much you can give away

The reward has to feel generous to the guest and cost you little. The simplest way to size it is to decide what percentage of a guest's spending you're willing to give back as rewards.

The best rewards are high-margin items guests value more than they cost you: desserts, drinks, starters, a size upgrade. Avoid cash discounts as the main reward; they feel like money and are forgotten quickly.

Step 3: run it without making guests download an app

Almost nobody downloads a restaurant's app, and those who do delete it when they need space. Paper punch cards don't work either: they get lost, you don't know who has them and you can't tell them anything.

What works best today is a digital card in Apple Wallet or Google Wallet, the app that already comes with the phone, where people keep their boarding passes. The guest scans a QR code, enters their name and phone number, and the card stays on their phone with their points balance, their tier and a code to identify themselves at the register. Every time they earn or redeem points, the card updates on its own.

Through that same card you can also send messages to their phone, such as a birthday greeting or a note when they move up a tier, without asking them to install anything or accept notifications from a website.

Step 4: decide how points are recorded at the register

This is where most programs fail: if recording points takes the cashier more than a few seconds, it won't happen during the rush. There are three common ways:

1. Scan the card's code. The cashier scans the QR on the guest's phone with a tablet or phone camera, types the amount and that's it.
2. Look the guest up by name or phone, for anyone who forgot their phone or doesn't want to take it out.
3. Connect the program to your point of sale, so points add up automatically at checkout. It's the most convenient option with several locations, but it needs an integration with your system.

If you're worried about staff giving points away, you can require a photo of the receipt with every earn. That way each transaction has its proof and you can review the ones that don't add up.

Step 5: give your team one sentence

Your servers and cashiers sell the program, not the poster. Give them a short line and ask them to say it with every check:

Track how many sign-ups each shift brings in during the first weeks. If a shift signs up nobody, the problem is rarely the program: it's that nobody is offering it.

Step 6: talk to members without overwhelming them

Having a guest's details isn't permission to message them every day. A few well-timed messages work better:

• Welcome, the day they join, reminding them how close they are to their first reward.
• Birthday, with a small treat to celebrate at your restaurant.
• Tier upgrade, so they feel they won something.
• One or two campaigns a month at most: a new dish, an event, a promotion for a slow day.

Step 7: measure whether it's working

Check these numbers every month. If you can't see them, you don't know whether the program is making you money or just giving away desserts:

• New members per week: tells you whether your team is offering it.
• Visit frequency of members compared with before they joined.
• Share of sales from members.
• Active, at-risk and dormant members: who came in the last 30 days, who hasn't come in 31 to 60 days and who has been gone longer than 60.
• Satisfaction: a short survey after the visit tells you whether people come back because of the program or in spite of the service.

The survey is the other half of the program. A guest who had a bad experience won't come back for points. If you find out the same day, you can still call and fix it; if you find out from a one-star review, it's too late.

Common mistakes

• A goal that's too far away. If the first reward comes on visit 20, almost nobody gets there.
• Rules that don't fit in one sentence. If the cashier can't explain it in five seconds, they won't.
• Asking for too much at sign-up. Name and phone number are enough to start.
• Launching it and forgetting it. Without messages or measurement, the program becomes one more card on the phone.
• Rewarding only with discounts. They cut your margin and don't build a habit.

How SnapRate does it

SnapRate is a platform from Guatemala that brings your loyalty program and customer satisfaction measurement together. Guests carry their card in Apple Wallet or Google Wallet, with no app; you set up points, tiers and rewards; your team records points by scanning the QR, or points come in automatically through a custom integration with your point of sale. Each visit can end with a short survey: if someone rates you poorly, you get a WhatsApp alert so you can act the same day. Up and running in 3 days.

See how it works on the loyalty page or the restaurants page.