Our last article discussed how to start a customer loyalty program in your pizzeria. In it, we shared advice for pizza business owners who are curious about customer loyalty programs but not sure where to get started. The good news: it’s as simple as eight steps! So, if that is you, we encourage you to check out the article here.
However, we understand that many pizzeria owners have existing customer loyalty programs. Like all things in business, we believe there is always room to grow and improve—including customer loyalty programs! That’s why we’re back to share specific tips on how you can build an even better loyalty program that draws in more customers, sales, and engagement.
7 Secrets for Better Customer Loyalty Programs
The secret to creating better customer loyalty programs is in the science. The consumer research that is. The tips below use statistics about what is working (and not working) currently in customer loyalty programs.
1. Deliver Immediately
Key Statistic: 60% of consumers say they are motivated to join a loyalty program by instant discounts.
The statistic above refers to premium customer loyalty programs (which we will discuss later in #6). However, the principle applies to free programs too. If you want to motivate people to sign up for your loyalty program, you have to provide an immediate incentive.
A popular incentive for joining a loyalty program is, “Sign up today and get X% off your purchase!” It’s an offer that is hard to pass up, especially if the sign-up process is simple. Or you may offer a freebie in exchange for signing up, for example, a free side, an extra topping, or the option to size up the pizza at no additional cost.
When thinking about sign-up incentives, remember that customer loyalty programs should encourage loyalty in the form of repeat business. For this reason, you should consider offering a sign-up bonus that is applicable for the next order (in addition to or instead of an immediate incentive).
2. Have a Re-engagement Plan
Key Statistic: 54% of loyalty memberships are inactive.
Many people join customer loyalty programs, but the sad reality is that many members become inactive. This can happen for many reasons, but it’s up to you as a pizza business owner to ensure that the problem isn’t you.
Communication is key to keeping your customer loyalty program healthy and effective. People are busy and need reminders. Some will also want extra incentives, such as coupons and discounts, to bring them back into your pizzeria.
So, the question is: do you have a re-engagement plan for members of your program who go inactive? Your plan can be as simple as sending a monthly newsletter, points balance reminders, or periodic promotions they can’t refuse. Email and physical mail work, and you can also use effective strategies like retargeting ads on social media and text messages using your cloud phone system.
3. Collect Data
Key Statistic: 86% of customer loyalty programs lack rewards for completing a profile.
Customer loyalty programs offer the perfect opportunity for pizza business owners to learn more about the customers they serve. As this statistic shows, many business owners aren’t taking advantage of this great opportunity! By incentivizing a customer to complete their profile, you can get more people to fill out their profile. In turn, this means you will gather essential data that will help you:
- Understand critical details about your market, such as gender, age, location, household, etc.
- Improve personalization in your communications and the offers you share with each customer
- Improve your marketing strategy so you are targeting the right people with the right messages
When a person signs up for a customer loyalty program, you may only need basic information like their name and email address. However, you can get extra demographic data by offering rewards or points for filling out the profile (like gender, age, household information, etc.), and you can allow them to opt-in to text or email communications. You may even have them identify their favorite items at your pizzeria, or ask other questions that will be helpful to your business.
4. Expand Incentives
Key Statistic: 75% of consumers want to be rewarded for more than just purchases.
This statistic should cause pizza business owners to reflect on how they are rewarding customers in their loyalty programs. Of course, the primary way to accumulate points should be purchases, but is there anything else of value to your business that is worth a reward?
As we mentioned above, it is beneficial to reward customers for filling out their profiles because it allows you to collect extra data that is helpful for various reasons. A few other areas to consider offering rewards include:
- Reviews: Pizza restaurants are local businesses, so Google reviews mean a lot to new customers evaluating which place to try. Encourage more reviews by offering reward points for doing so. Reward points should be awarded regardless of whether the review is positive or negative. But since the person is a loyalty program member and trying to accumulate points, the chances are high that the review will be positive.
- Recommendations: Word-of-mouth marketing is an excellent strategy for acquiring new customers. You can incentivize recommendations by offering members points or rewards when they recommend a friend and that person makes a purchase or joins the loyalty program.
- Surveys: Offer points to customers willing to share their opinions in surveys. By asking what people think of your business, loyalty program, or a new item on the menu, you’ll stay on top of customer opinion and adapt to feedback quickly.
5. Think About Point Expiration
Key Statistic: 56% of shoppers say they changed or abandoned a purchase when they realized their points had expired.
This statistic should encourage pizza business owners with customer loyalty programs to think carefully about how and when points expire. Not only could it mean a lost sale (as the statistic shows), but when a customer suddenly realizes their points are gone, they may become angry and leave a bad review.
One option is to have no expiration for points—although that could get tricky and potentially expensive if people save massive amounts of points and want to redeem them all at once. Another alternative is to have an extended expiration date, for example, a year, which should give people adequate time to redeem acquired points. No matter what expiration date you choose, you’ll want a system to remind people of when points expire, with warning emails/mailers/texts at least a month before the points disappear.
6. Consider a Premium Program
Key Statistic: 51% of retailers with premium loyalty programs say loyalty program members are 4x as valuable as nonmembers.
A premium loyalty program is one in which customers pay to be a member. Perhaps the best example is Amazon Prime, where customers pay a monthly or yearly fee to get benefits like free 2-day shipping and streaming in Prime Video.
As the statistic above indicates, premium loyalty programs work because they drive ROI by focusing on your most valuable (and profitable) customers.
It’s also interesting that the same report found that 95 percent of retailers with traditional loyalty programs have discussed launching a premium loyalty program. When it comes to loyalty programs, premium is the latest trend.
Pizza business owners interested in this idea may consider adding a premium (paid) option to their free loyalty program. The paid option can be structured to provide better rewards, freebies with purchase (such as a free extra topping for each pizza purchase), invitations to exclusive events (like a VIP pizza party, or the chance to try new menu items before anyone else), members-only discounts, and other perks that will attract customers and help them justify the cost of membership.
7. Evaluate and Adapt
Key Statistic: On average, people belong to 14.8 customer loyalty programs, but they are only active in 6.7 programs.
This statistic tells us that customers don’t even use over half of the loyalty programs they join. And that means that many loyalty programs are ineffective (since the point of these programs is to encourage participation and repeat business). To avoid the same fate, you’ll want to continually evaluate your program’s performance and make adjustments where needed. Some key statistics to watch:
- Enrollment Rate
- Activation/Engagement Rate
- Repeat Purchase Rate
- Average Spend Per Member
- Lifetime Value
- Percentage of Sales from Repeat Customers
As mentioned in #4, you can also get incredible insight into what is and isn’t working by surveying your loyalty program members. You can’t change what you don’t observe, so watching these statistics and paying attention to customer feedback will allow you to make changes to keep your customer loyalty program effective.
Better Customer Loyalty Programs
A customer loyalty program isn’t a ‘set it and forget it’ endeavor. Once the program is in place, pizzeria owners should be continually evaluating performance and striving to make improvements that will increase enrollment and usage. Try out at least one strategy on this list, and you are sure to watch your customer loyalty program grow!
