Raising Regulars
Famous Sam's Turns Occasional Diners into Loyal Guests

Loyalty programs are worth the time, work and effort they take.    
    The purpose of a loyalty program is to convert occasional customers into loyal guests, and this can have a major impact on the profitability of your business. Creating this type of loyalty within your business is not expensive, but it is priceless.
After you reach the break-even point at your business, all increased sales will yield 40-60 percent profit, because you’ve paid all your fixed expenses. So, new sales dollars through a customer loyalty program can generate thousands of dollars in new profits. 

People Respond to Rewards
    Most Americans actively participate in some type of rewards program and most are enrolled in more than one. This is a tremendous opportunity.
    Yet only about 25 percent of food and beverage operations are offering their guests a customer loyalty program, according to the National Restaurant Association. The NRA also reported that over 51 percent of adults surveyed are more likely to patronize a business that has a loyalty program.
    So, how do you start a customer loyalty program? You must begin by getting contact information for your customers so you can market to them.
    An effective customer loyalty program begins by providing incentives to your current guests. Bringing your current guests into your business more often will dramatically increase your profits. Then, when you provide outstanding service and high quality food, it makes the guest feel important and creates within the guest a sense of loyalty to your restaurant. This is a win/win situation.
    When guests are loyal diners at a business they bring in new customers — family, friends and business associates. These loyal guests become positive word-of-mouth advertisements who share the virtues of your business.

What’s Important
    What are the signs of success for an effective guest loyalty program?
    To better understand this question we asked Brad Snyder, General Manager of the Sierra Vista, Ariz., Famous Sam’s Sports Bar. Snyder is a 13-year veteran with Famous Sam’s and is also responsible for human resources and marketing for the 6-unit franchise.
    “Recognizing your customers and making them feel important is essential to an effective customer loyalty program,” Snyder says. “We have had phenomenal results with our customer loyalty program. It has given us a great increase in sales and profits.
    “We continually focus on making sure that all our guests feel important, and we let them have fun. We work with our management team and employees to let them help us discover different ways we can accomplish this goal. Employee involvement is essential.”
    “We have nearly 6,000 customers in our MVP Club,” he says. “We contact these customers at least once a month and more if we have a special event. We try to have special promotions two to three times a month. To make the loyalty program work, your service staff has to be properly trained and provide outstanding food and service — and get contact info.
    Snyder uses sign-up cards at each table. “When guests pick up the cards, this gives the service employees an opportunity to explain the MVP Club to them,” Snyder says. “The server would say, ‘We’re glad you’re here, and as a way to show our appreciation, we’ll send you special offers, including a bonus for joining our MVP Club and a free dinner on your birthday. We appreciate you coming in and we love to give you rewards.’”
    You must have a lot of planned interaction with the guest on his first visit. Snyder has trained his employees to recognize first-time guests and to ensure outstanding food and one-on-one personalized service to produce a return visit within 21 days.
“If I can get the first-time guest back into the business 3-4 times in the first couple of months, I can make regulars out of them,” he says.
    Successful loyalty programs have at least three factors in common: (1) The right mix of short-term and long-term rewards for the businesses unique customer base, (2) an effective communications program that keeps their customers engaged, and (3) a program structure that ensures the desired profits.
    “The birthday mailings are showing the best returns,” Snyder says. “Over 50 percent of the customers we invite come in and bring 4-7 people with them, sometimes more. The check averages are much higher because people like to spend more on their birthdays.
    “With 6,000 names in the database, that means I average over 500 birthdays a month, which brings in at least $10,000 in additional sales.”         NCB


Ron Wilkinson is the founder of NightClubandBarMarketingGroup.org, specializing in maximizing sales and profits for clients. For more information, call (888) 776-3484 or visit the site.