Even as major restaurant chains across the country launch loyalty programs or improve their existing programs with increasingly personalized deals and offers, there remains a huge amount of untapped demand. In fact, PYMNTS research has found that about four in 10 consumers say they would be encouraged to make more purchases if the restaurants from which they were ordering offered loyalty rewards programs.
While this pent-up demand is noteworthy in and of itself, it doesn’t tell us much about how best to engage those consumers. After all, a single twentysomething is likely looking for different features and rewards from the loyalty program of a table-service restaurant than what a married couple of bridge millennials (those between their early thirties and early forties) looking to feed their family would want from their favorite quick-service restaurant (QSR) loyalty program, for instance.
Now, new PYMNTS research from this month’s edition of Delivering on Restaurant Rewards, created in collaboration with Paytronix, shows us how the demand for increased loyalty options breaks down across demographics. Most notably, 56 percent of married couples without kids, 55 percent of married couples with kids and 53 percent of singles are not using loyalty programs at table-service restaurants due to a lack of availability.
These numbers are well above the previously cited four in 10 consumers who would be encouraged to spend more with loyalty options in general. This means table-service restaurants have an opportunity to boost spending for more than half of their married customers and their single-without-kids customers: One study from researchers at Northwestern University found that loyalty programs increase purchasing by 20 percent and that instantly redeemable rewards increase spending by 68 percent.
While the desire for increased loyalty options at table-service restaurants is the highest, the demand is significant across the board. At QSRs, 37 percent of singles (with or without children), 42 percent of married couples without children and 43 percent of those with children are not using rewards programs simply because they do not have access to them. By adding loyalty programs or by better promoting their existing programs, QSRs may be able to turn their occasional customers into regulars.
These data are also key to getting a sense of which consumers are already adopting loyalty programs — for instance, over half of married couples with children are using loyalty programs both at QSRs and at table-service restaurants. Meanwhile, only about one-quarter of single consumers are using these programs at either type of restaurant. This indicates, for one thing, that restaurants may be able to get the most from their current rewards members by offering deals targeted to these married parents, such as bundled family meals or limited-time child-friendly menu items.
Additionally, if restaurants want to target consumers who are already amenable, they may want to focus on those in their early forties and younger. PYMNTS research indicates that almost half of all bridge millennials are restaurant enthusiasts, “restaurant customers who order from sit-down restaurants or from both sit-down restaurants and QSRs twice a week or more,” as are 41 percent of millennials and 42 percent of Generation Z consumers. This is good news for restaurants, as these enthusiasts have also been the quickest to adopt loyalty programs — more than 60 percent of restaurant enthusiasts are already using loyalty programs. Of course, knowing the demographics of these loyalty-hungry consumers is only the first step. Next comes making the programs as appealing to these consumers as possible, with the help of data and artificial intelligence (AI).
“Guest expectations have changed forever. Exceeding them requires not only improving the loyalty offering, but also using program data to improve the guest experience,” Michelle Tempesta, head of product for Paytronix, told PYMNTS in an interview for January’s Order to Eat Tracker. “Brands like Panera Bread and Jimmy John’s positioned themselves well by being early adopters of Apple Pay and Google Pay. They enabled diners to not only pay, but to pass their loyalty identifier via a contactless tap at the point of sale. Guests feel safe, and the brands deliver an exceptional experience.”
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