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CEO Point of View (POV): Loyalty is a Business Strategy

scottFishbowl has worked with clients for over a decade to build email clubs, assess explicit loyalty programs, and deploy data-driven solutions. We touch over 130 million restaurant guests on a regular basis, continually assessing their response to client marketing programs and initiatives.   Out of this experience we have developed a unique point of view on the concept of guest loyalty.  From our perspective, loyalty isn’t a card:  it’s a business strategy.  And we believe that restaurant marketers who want to leverage the power of digital marketing to proactively drive increased frequency and spend – in the way that ecommerce and retail companies have done so successfully — need to think differently about guest loyalty.

Here are some facts to consider.  Data from Fishbowl’s current clients shows that many guests are hesitant to enroll in an explicit loyalty or rewards program. For those who do enroll, well over 50% of traditional loyalty cards remain unregistered. Moreover, these programs typically miss infrequent guests who are nonetheless strong brand advocates as measured by surveys or social comment, as well as guests who enter the database through online ordering or catering.

funnel_loyalty2Think of loyalty-as-strategy as a continuum, one that covers the full guest lifecycle and experience.  It starts with acquisition.  One of the differentiators of Fishbowl’s loyalty approach is that we focus on profitable customer acquisition as the starting point for performance marketing.  Beyond that, we see the key as engaging all addressable guests, moving them along the continuum by learning about their dining behavior, preferences, and spend, and then building a one-to-one relationship through smart marketing programs that maximize each individual’s lifetime value.  In this context an explicit – or traditional – loyalty program may make sense as a program-within-a-program, e.g. as a means of engaging cash customers or heavy users, but it shouldn’t be considered as the overall strategy.

We will be talking more about the implications of our loyalty perspective in the coming weeks, but for now, here are two key takeaways:

  • Loyalty is not a one-size fits all model.  Instead, it should be a collection of guest centric strategies and tactics focused on acquisition and engagement.
  • Building loyalty requires clear marketing goals, then measuring and optimizing on an ongoing basis.