You’ve got a restaurant loyalty app but why isn’t it increasing loyalty?

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It’s been revealed that by 2020 there will be 21 billion connected devices invading our lives. A pretty mind-boggling stat, right? And considering the fact that mobile users spend 90% of their time on apps, it’s no surprise that restaurants are zoning in on this digital emergence. The likes of McDonald’s and Subway are already making strategic digital transformation updates, with the launch of new mobile apps proving to be a key element in becoming more digitally focused and forward thinking.

QSR and restaurant brands are recognising that creating memorable experiences for diners will help win the stomach share and allow them to dominate the market. Paying by mobile app has certainly hit the headlines over the last year, with research confirming that more than a quarter of people aged 18-34 would be more likely to dine at a restaurant if it allowed them to pre-order and pay via an app. It seems that today’s diners are no longer willing to interact with staff, order at a counter or browse a menu once seated, they instead prefer a faster, digital approach requiring minimal effort.

Earlier in the year Britain’s biggest pub chain, Wetherspoons, launched its ‘order and pay’ app to allow customers to place an order and settle up without even leaving their seat. Fascinatingly, the makers of these apps claim that they allow customers to be more sociable, however, some would argue that eliminating the interaction with staff is almost the definition of unsociable. But hey, at least we now have a valid excuse to go on our phones at the dinner table, and restaurant owners certainly won’t be complaining as the average spend rises by about 20 percent when technology is used to place an order.

With mobile apps forecast to be a 38 billion-dollar industry by 2020, brands are recognising that they not only improve operational efficiency but also drive customer engagement. Greggs, the largest bakery chain in the UK, gives away regular free items via its app, encouraging repeat custom and often leading to additional purchases being made when people redeem the offers. Pinkberry’s and Earl of Sandwich in the US have also significantly benefitted from launching loyalty programs that are integrated into their mobile apps. Last year, 32% of Pinkberry’s transactions came via their mobile loyalty app, and Earl of Sandwich customers spent on average 22% more when using the app.

In addition to pushing out loyalty schemes and increasing engagement, mobile applications allow brands to collect priceless customer data. The information collected during sign up and in-app use can be utilised to develop targeted and highly personalised messages that will grow frequency and spend. The Harvard Business Review states that personalisation can reduce extra costs by 50%, lift revenues by 5-15%, and increase the efficiency of marketing spend by up to 10-30%. So, it appears to be a real win-win for both end users and the restaurant that has launched the mobile application.

In an ideal world, consumers would always seek out and download a restaurant’s mobile application upon first visit, however, this often isn’t the case. According to the 2017 U.S. Mobile Apps Report, 51% of people still don’t download any apps in a month. This highlights that only a small proportion of people, usually the younger generations, will download restaurant loyalty apps, meaning there’s a huge data gap. When you also consider the fact that for every 10 customers who walk into a business only 3 are likely to return it seems restaurants need to use additional methods of data capture to truly understand their target market, be able to communicate with them effectively and drive repeat custom.

There’s no denying that mobile applications are growing in demand and helping to deliver a happier, more memorable customer experience, but for restaurants to deliver a best in class service they’ll need access to as much demographic and behavioural data as possible about those buying into their brand. Customer insights around frequency of visits, where people have travelled from, how old diners are and how they move around a venue will help restaurant and QSR brands to make strategic business decisions and launch new offers and menu options according to what their customers actually want.

The main takeaway for restaurant teams is that this is a highly competitive market where customers want to feel valued and have access to promotions with ease. Through the effective use of data capture and complementary mobile applications, it is possible to increase loyalty and deliver a more interactive and engaging experience for today’s digital savvy generation of diners.

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