How to drive brand loyalty in hospitality while avoiding discounts and promotions

More than half (52%) of people say they now have higher expectations of the brands they are loyal to due to the cost-of-living crisis. This underlines the precarious nature of brand loyalty in the current market – and with loyalty vital to the success of any hospitality business, it’s more important than ever that operators fully understand what drives customer loyalty and how they can maximise this opportunity.

The factors driving customer loyalty​
In partnership with CGA by NiQ we recently took a deep dive into the consumer view of loyalty in the hospitality sector, as part of our GO Technology series of research reports.

What we found is that most consumers are looking for value for money – nearly half (47%) of those surveyed said this was a factor in their loyalty to a hospitality brand or venue. Following behind, factors relating to individual preferences such as their favourite food and drink being served (30%) or because their friends and family like it (28%), came though strongly. This points to the value of shared experiences and the continued importance of word of mouth recommendations, something we looked at in depth recently in our report, “Reaching Hospitality’s Decision Makers”, which you can find in full on our website.

How operators can demonstrate value for money​
However, even though loyalty is very closely tied to value for money - this doesn’t necessarily mean that prices have to be low.
Interestingly, only 14% of consumers said being ‘a cheap option’ made something value for money and a mere 15% said value for money means ‘something on offer’. This insight underlines what most of us already know – that consumers consider value for money in hospitality to be an experience which they feel was ‘worth the cost’. In fact, a not inconsiderable two in five (41%) consumers said that’s where they believe true value lies.

Clearly this presents a huge opportunity for operators keen to maintain margins at this time, as time and resources can be dedicated to delivering great customer experiences, rather than driving footfall through deep cut deals and promotions. Every opportunity comes with its own challenges, however.

In this case, operators keen to drive loyalty through great experiences must be confident they can deliver this during every single visit. The survey results lay out quite starkly how important this is to consumers, with nearly half (49%) of them saying just ‘a few’ bad experiences at a hospitality venue is the number one reason they become less loyal to a brand.

The power of consistency in increasing customer loyalty​
Underlining the importance of consistency, a further quarter (24%) of those surveyed said a single bad experience would cause them to reduce their loyalty to a hospitality brand. And, as we all know, with plenty of options to choose from, people will inevitably look elsewhere if they aren’t getting the high-quality service they want.

One of the ways to look at delivering this, is by identifying the key ‘pinch points’ of a customer journey and work out how to make those moments frictionless and stress-free. We know from previous research in partnership with CGA by NIQ, that the top areas consumers consider to be the most frustrating include struggling to get a server's attention (30%), being told a certain dish is no longer available (22%) and being rushed to place an order (18%).

Solutions that support a team to deliver at these crucial points in the customer journey will help deliver better experiences and therefore drive loyalty. Digital ordering and payment processes, for example, can ease the pressure on teams on the floor by negating the need for duplication of tasks — for example taking orders by hand then entering them into a till. This avoids mistakes being made and frees up servers to spend more time responding to guests’ needs and improving the overall customer experience.

Technology can also give staff easier access to availability information and answers to common queries about dishes, equipping them with better knowledge for better service. Clearly, such systems will never replace staff, but it can give them the tools they need to do the best job they can.

Are loyalty schemes a ‘must-have’ for operators?​
Our deep dive into attitudes around loyalty in the sector also revealed that, while loyalty schemes are not the main factor determining whether customers keep returning to a venue, they remain a key part of the marketing mix.

Well over half (58%) of consumers said that loyalty schemes represent good value for money and nearly half (47%) have joined a loyalty scheme to save money since the cost-of-living crisis, demonstrating their continued and growing role.

With this mind, it’s important that operators assess if their own programmes deliver on this demand – and if not, think carefully about how to design loyalty schemes that highlight great experiences at great prices. 

The growing trend for personalisation could be another key to staying ahead of the competition here. Again, our previous research tells us that there is consumer demand for offers and experiences that are tailored to personal preferences, with 80% of people claiming they have some interest in personalisation from the restaurants pubs and bars they visit. It is something they have certainly come to expect from loyalty schemes with 29% of people interested in a loyalty scheme with rewards that are personalised to their habits and preferences.

Loyalty schemes collect the data that enable operators to create these bespoke offers – personal data will tell us what a customer’s most frequently ordered dishes and drinks are, prompting an offer on a glass of a preferred wine on a quiet evening, perhaps, or a discount on favourite dish. At other times, a free glass of fizz for a birthday or a simple reminder of an upcoming celebration and a prompt to book a meal can boost the bottom line.

It remains true that schemes alone are only a part of the picture, of course. Our research clearly shows that, just as important to remember when it comes to nurturing and growing loyalty, is that value for money is what people are looking for; that this does not mean cheap, and that delivering great experiences – consistently day-in-day out – is vital.

For more information on Zonal click here.​ ​