Restaurant operators have all talked about the importance of reward and loyalty programs for their in-store diners. These programs come in a variety of shapes and sizes, drive frequency and promote customer engagement. However, they seem to overlook the catering component of restaurant operations.
Most catering customers spend $181 per order, according to the Technomic 2011 Large Orders Off Premise Study (LOOP), which translates to $9,000 per year based on a 50-week sales cycle, said Paul Rooprai, president of Distill Strategic Partners and a faculty member at The Catering Institute.
Rooprai was a speaker on the recent Catering Institute webinar Building Order Frequency with Rewards and Incentives and was joined by Brian Farris, vice president of catering and off-premise with Schlotzsky’s.
Building order frequency improves execution, creates routine habits among customers and fosters stronger relationships with customers, Rooprai said. “The question is how do you incentivize someone to become a loyal customer at the catering level.”
Loyalty is what drives consumer behavior and is what turns one-time customers into frequent ones. A reward is something given in recognition of a service or achievement. Both can be used to drive frequency despite the differences of each.
“Rewards programs are ways to build loyalty and there are lots of different dynamics that go into a reward program,” Farris said. “There are lots of different levers that you can pull to be able to effect ultimately what you want, which is engagement. You want to engage the new guest to attract them. You want to engage the existing guest to retain them and you want to engage your brand loyalists to refer you.”
To drive that engagement, restaurant operators have an arsenal of tools from which to choose. Those include: membership cards, offers and services, points or discounts, referral schemes or other touch points. Those tools also include punch cards, which are easy to use and easy for guests to understand because there is an action and then a reward.
“I think in every reward program that you put together, the fundamental aspect to get people to sign up is this same basic concept: If I do this I get that,” Farris said. “But to be truly effective in your loyalty program and your rewards program, you have to do more. You have to have data and you have to be able to speak to everyone of your guests in an individual way that’s meaningful to them.”
While punch cards are a great way to drive consumer frequency, Farris said operators should use additional tactics to increase levels of engagement. Additional tactics operators should use include:
- A situation where a catering customer signs up and is given an offer after their first-time order or during prospective meetings/calls.
- Rewards points per dollar, per order.
- Rewards that surprise and delight
- Rewards that are specifically targeted to catering/off-premise customers.
While rewards can be used for business purposes, operators should be careful to avoid a “kickback” perception that can exist with some rewards programs.
” We walk very carefully a thin line. A lot of catering orders are purchased with other people’s money. You really have to recognize and appreciate the person who is placing the order without putting them in a situation where it’s a blatant kickback and you put them at risk,” Farris said. “That’s where you need to be creative about going beyond the quid pro quo aspect of your loyalty program.”
One size does not fit all
While some restaurant concepts are using the same rewards platform for their catering customers as their traditional ones, catering is not the same as take-out.
The packaging is different and in many cases catering delivery drivers are dropping off items, setting up for events and retrieving items when the event is over. Additionally, 30 percent of restaurant catering customers order weekly while 20 percent place catering orders several times per week, Rooprai said.
“If you understand the person placing the order isn’t actually eating the food, you might say for every $100 you spend with us, we’ll throw in a lunch for you and pack it separately. That’s different than punching a frequency card,” Rooprai said.
Catering rewards also do not have to involve food or something tangible. For example, Rooprai was working with a catering customer that included a Trivial Pursuit card in every packed lunch, which turned into conversation starters for the concept’s catering customer.
“So we brought an element of fun to what might have been an otherwise boring meeting,” he said. “It was a way to surprise and delight. That might be intangible, but it tells your customer you understand me and understand what the gathering was about.”
However, the key to any program is to give incentives rather than discount.
Greg Seei, CEO and founder of Robust Promotions, said chains are starting to tie in sweepstakes to their catering orders as a way to build frequency. He offered these tips for restaurant operators looking to add value to their catering programs.
- Tie the prize to catering events. If you know that June is wedding month, have a contest giving away free centerpieces and try to incentivize the people who going to be catering bridal showers, he said.
- Think about cross promotions. If a concept is hosting a game or other promotional activity, include game pieces inside catering orders that have to be taken back to a brick and mortar location for redemption.
- Hand out promotional cards at community events. These cards should feature an offer that is tied to a future catering order.
- If a promotion is being held exclusively online, use employees and customers as top promotional evangelists. Use social media to build excitement, but get the messaging and tools right. Additionally, leverage the social networks of your current customers.