Many pubs and bars are looking to their food offerings and loyalty programs as they try to increase dwell time, average spend, visit frequency and expand their customer base.
Mintel statistics show that diners have cut back on the frequency of their pub/bar visits over the past year, with only 16% visiting pubs to eat during the day at least once a week, compared to 19% in 2021.
The cost-of-living crisis means consumers are more price-conscious, and for many, dining out is an indulgence rather than a given. 68% of consumers agree that the rising cost of living has made eating at pubs/bars less appealing.
This has resulted in a change of behaviour - with customers now “shopping around” for the best experience, atmosphere, food quality and loyalty programs. Recent statistics show that 90% of consumers research a restaurant or pub before visiting - more than any other industry.
A growing challenge for pubs and restaurants
This presents a challenge to premium pubs and bars, who know that rewards programs increase the number of new customers, but don’t want to devalue their offering or cheapen the customer experience with half-baked loyalty schemes.
Many marketers and FDs also don’t want to end up in a situation where new customers only visit when they see a rewards program - the same trap some casual dining brands fell into during the email marketing boom.
Discounting also feels like a backwards step for profits at a time when there is extra pressure on customer satisfaction and businesses due to the rising cost of labour, ingredients and food.
However, statistics from Mintel show that 77% of UK adults agree that rewards programs would encourage them to eat at pubs/bars.
So how do premium bars and pubs navigate promotions and motivate customers to earn rewards, without sacrificing their standing as a premium destination?
With this statistic in mind, many groups will have pub visitors who are there for solely drinking visits or occasions. Identifying these segments, and then persuading them to give the food offer a try (and rewarding customers that do) can be an incredibly powerful targeted marketing strategy and works to increase repeat customers.
Young’s had great success in January 2022 with a rewards program that led to a significant increase in customer retention. Visitors in December were rewarded with £10 off their meal in January, when spending £30. Those who visited and redeemed the offer were quickly offered a follow-up of treating a friend to dinner when purchasing two main courses.
These offers were presented under the same banner of ‘surprise and delight’ as their other yearly rewards, meaning customers weren’t expecting these to be long-running discounts but provided a real incentive for captive app users to come in for a dining occasion.
Young’s is running a similar linked promotion this year, to engage regular customers and drive footfall at a time of typical downturn of hospitality trade in January.
Building customer loyalty programs through pseudo-currency
Building persistent surprise and delight loyalty also offers a premium experience to customers. Peach launched their Peach Pounds in 2022, tracking customer data points like visits and interactions with the brand, and rewarding them with pseudo-currency after a certain threshold has been reached.
The omnichannel approach combines in-app ordering and loyalty redemption with other touchpoints, such as hotel stays, booking tables in advance and sending in feedback.
Peach’s award-winning pubs have an extremely high-end food offer, with bespoke menus per site and chefs who have control and influence over the menu choices. They place a great deal of focus on sustainability and premium ingredients, and don’t feature persistent discounts or offers on pub menus.
Customers earn rewards (Peach Pounds), which are redeemable against food and drink, and with the average guest receiving £7.50 per reward to use on future purchases, it feels generous and substantial. This in turn works to build on customer loyalty and fuels repeat purchases.
Bex Wilkins, Marketing Director, said “we use the Peach Pubs app as an instant way to engage with guests. We reduce lapsing of guests through automation and by rewarding our loyal and valuable customers.”
Segmentation and the value of customer data
The last tool hospitality marketers are using to manage loyalty programs, predict customer behaviour and retain customers is segmentation.
Revolution Bars bucked industry trends and delivered strong sales throughout 2022, and reported over 1.2 million guest users of the Revs app. Revolution seeks to cater to multiple segments and is well-known for its student offering.
They also market incredibly successfully to older segments, including after-work drinks visitors, daytime city-centre lunch trade and experience-seeking graduates with disposable income.
This personalisation is present within the app, as the group shows their deeper discounts to students only after they’ve verified their account. Office workers and graduates who are looking for a premium cocktail offering worthy of their Instagram grid are served a different loyalty strategy.
Mintel reports that 18 to 34-year-olds are most likely to agree that dining at leisure venues is more enjoyable than pubs and bars (36% vs 21% of the total), and with this forming a core part of Revolution’s demographic, the group uses their app and digital marketing to highlight both the quality and value of their menu.
Your customer loyalty program doesn't have to encourage deep discounts and eat into profits
By designing your own loyalty program that suits the needs, desires and segments of your brand, you can leave loyal customers feeling rewarded and incentivised to visit, without deep discounts.
Successful campaigns can be established that offers guests a thoughtful, personalised reward, with targeted messaging that doesn’t dilute the wider brand perception.
If you are using digital ordering, loyalty and marketing to drive customer engagement over 2023, we’d love to discuss the approach and possibilities for your scheme.
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