Playing the loyalty card

How do you encourage your customers to keep coming back? Our panel of industry experts give their views on developing effective loyalty schemes

Paul Grace, Coca-Cola Enterprises

Loyalty schemes clearly work when they are done on a mass scale — take Nectar and Tesco Clubcard, which promote repeat business, and help the retailers to understand the people shopping in their stores.

On a pub level, it's harder, but success can be achieved if the correct planning is put into place. Think about the offer you are trying to promote and continually question yourself at every stage whether you can afford to give 15% off the next bill, or free desserts on every visit.

Try to capture some data from your customers — a mobile number could allow you to send a simple text to people telling them about your next curry night; an address means you could send out a Christmas menu in November with a special offer to stimulate early bookings.

Basically, the more you know about your customers, the more tailored your offer can be. Remember, if you are asking for some formal registration, you must ask consumers if they mind being contacted. You should not share this information with any other parties without the individual's consent.

Geoff Brown, Punch Taverns

Loyalty schemes can have a major impact on sales, especially if you use them to drive footfall during quieter trading periods. For example, if you have fewer customers in the afternoon, you could consider a loyalty scheme targeting the "grey pound". If you are unsure about the value of loyalty schemes, try dipping your toe in the water with a simple bounce-back mechanic.

When you know your pub will be busy at certain periods (such as Christmas, bank holidays or Sunday lunchtimes) offer simple deals to customers for return visits. Offers such as free mid-week desserts, free or discounted drinks will attract customers. That way you can test the value of establishing a direct and personal relationship with your customers before investing in launching a

loyalty scheme. 

Be clear about your objectives and what you hope to achieve in return for launching a loyalty scheme, and remember to keep it simple — the clearer the offer, the more chance you will have of your customers using it.

You should also try to keep it fresh, so that you continually remind customers about the advantages they will receive from participating — for example, when you launch a new menu you could invite loyalty-card holders for an exclusive tasting session.

David Scott, Carlsberg UK

Loyalty can be a time-consuming piece of activity if you start to get into lots of complicated conversations with your consumers — however, if you get it right, you can drive repeat visits and sales into your outlet.

At a simple level you could learn from the coffee chains and offer a simple collector-card mechanic — for example, buy five pints and get one free or buy 10 pints and claim a free meal.

Remember, with all of the scaremongering going on in the papers at the moment, consumers may appreciate a reward for supporting the on- trade — and what better move than giving them something

for nothing?

Something involving a little more work, but equally effective, is creating a reason for consumers to keep returning to your outlet. Good examples would be supporting your local football team or creating a darts league, so that consumers have a sense of belonging and return to your pub on a regular basis. Small things always help, such as free food after the match or a decent prize consumers want to get their hands on.

Whatever you decide to do, loyalty only works if consumers can rely on the activity taking place on a regular basis — so always stick to the same night and time to ensure you don't disappoint.

Imogen Pudduck, Red Bull

In my opinion, loyalty schemes can be a good idea if your target market is heavily weighted towards, for example, the student market, which can be fickle in its choice of venue, but love a good deal.

However, if you are a smaller independent business, I would suggest other ways of building customer loyalty that would be better and more long-term than loyalty schemes. 

Market research company HIM lists the top four most important things consumers look for when entering a pub or bar:

1. Atmosphere: At number one, this is a sure-fire way to generate loyal customers, who come to your establishment for the vibe you create.

Whether it's the best place to watch the big game, has a cosy country-pub feel or late-night live music, people love a good atmosphere and knowing what they'll get on entering their favourite haunts. Focus on your atmosphere to ensure you don't disappoint.

2. Pricing: Regular customers like to feel assured that you have a strong range at reasonable prices.

Eighteen per cent of people actively compare prices between pubs and bars in the area. Research the local neighbourhood and ensure that your pricing is competitive.

3. Range: Thirty per cent of people think your food and drinks range is of key importance. Ensure you offer a strong range of key products, not over-cluttering your bar or menu with too many options, but ensuring the most popular items are available and clearly visible at the bar.

4. Staff friendliness: You can't beat it. If your staff make customers feel special, they will feel loyal in return.

If you tick all these boxes, you will build a loyal customer base, which loves your place quite simply for what it is.

Sarah Lewis, Diageo GB

The main purpose of any loyalty scheme is to put more cash in the till by giving something of value back to the customer. Good schemes are an excellent opportunity to increase sales, but if they are developed without clear plans for return on investment, business goals and customer targeting, the cost and administration could outweigh the potential for success.

Before embarking on a loyalty scheme, think clearly about what the purpose of the promotion will be. Are you trying to encourage an extra drink or food purchase, increase customer numbers during quieter periods, attract new customers, or increase spend?

Each of the above will demand a different approach to implement a loyalty scheme successfully, but remember to plan your budget carefully. As a general rule, always think about giving away something that is high cost to the customer, but low cost to you, such as price discounts, trading up in spirit measures, or free drinks or food with an existing purchase. Only give away what you can afford, but bear in mind that it can be of value to take a short-term hit for long-term gain. This is particularly relevant when embarking on a longer promotional schedule, so think about your expected return versus your initial investment.

To get value out of your loyalty scheme, keep your customers' target age in mind. The younger crowd is likelier to respond to "cool" and exciting offers while older customers will be focused on how the scheme can improve their experience in your pub. Don't forget to shout about what you're doing via in-store PoS, outside signage, leaflet drops or advertising, as this can be as effective as the scheme itself.

Finally, you can always try to share the cost with local suppliers and businesses via a joint loyalty scheme, which may provide additional benefits for your customers through added value and excitement. Plus it can be a great way to forge better links for your outlet within the business community.

Graham Donald, Matthew Clark

Loyalty schemes can work as long as the rewards are appropriate to keep people in the scheme. They can be difficult to administer and the redemption of rewards needs to be budgeted. Never run an open-ended scheme — always make sure it has a closing date, otherwise you could be redeeming rewards forever.

The other word of caution is that loyalty schemes only work for people who participate in them — just because you like collecting