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6/18/2014 - Few restaurants offer loyalty programs to customers

Restaurants around the country could be missing out on long-term customers due to a lack of loyalty programs.

If restaurateurs seek to improve their bottom line and at the same time provide a service for their most faithful patrons, they might want to consider establishing a loyalty program, as a relatively limited number of eateries have done so, according to the results of a new survey.

Approximately 50% of survey respondents said they belonged to a restaurant program of any kind, independent research organization Deloitte revealed. That's a sharp contrast to other industries such as airlines and hotels, where 78% and 70% of consumers, respectively, are part of one.

But it isn't enough for business owners in the foodservice industry to simply establish them; marketing is a key component, the poll's results suggest. For example, of those consumers who said they participated in at least one loyalty program, 3 in 4 said it wasn't with their favorite restaurant because they weren't aware if one existed or what was required in order to join.

What bodes in restaurant owners' favor is that of the over one-quarter of survey participants who said their favorite restaurant did offer one; nearly 90% said they took part, according to Deloitte.

"Although restaurant loyalty program participation is lagging, the study indicates that consumers do not have an inherent aversion to such programs," said Scott Rosenberger, head of the professional services firm's hospitality division. "These programs can drive value if promoted effectively, as a restaurant's most frequent patrons are more inclined to join that restaurant's program and use it more than any others."

Variety is key
A core component to consider when establishing reward or loyalty programs is listening to what the customer wants. For example, among pizza place enthusiasts, patrons say they want to have plenty of options. In a separate poll performed by business strategy consulting firm Technomic, nearly three-quarters of consumers who frequented pizzeria eateries said that they wanted more pizza options to choose from, such as different toppings. That's up from 70% in 2012 when a similar poll was conducted.

"Consumers are setting new standards for the quality and variety they expect," said Darren Tristano, Technomic executive vice president. "The fast-casual pizza segment is succeeding because it's matching customers' needs for quality, freshness and the ability to choose from among a broader selection of ingredients."

The aim of any loyalty program is to generate more revenue and profit. With a larger base of customers, however, it can increase the potential for liability. Restaurateurs should be sure to update their businessowners insurance plans so that they can hedge against issues stemming from accidents that take place at the workplace or litigation brought by a disgruntled patron.

For more details on businessowners insurance plans, talk to a local Selective agent today.

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