Loyalty Trends 2024: 3 Customer Loyalty Engagement Tips

Key Takeaway: Since customers belong to more loyalty programs than ever (an estimated 16.7 total per person), brands must create emotionally resonant experiences that drive enduring engagement. 

Restaurant and convenience store loyalty programs have undergone a significant transformation over the years. They’ve evolved from basic punch cards to sophisticated digital platforms that offer personalized rewards tailored to guest preferences and behaviors. 

While many operators wish to move away from discounting, transactional benefits like special pricing and points-based earnings remain core pillars of guest loyalty programs. According to Deloitte, 86% of restaurant loyalty members say earning and redeeming discounts and rewards influences their program participation. 

At the same time, savvy operators recognize the need to boost stale and outdated programs with new features that increase engagement beyond mere transactions. While discounts act as a motivational foundation, layering on unique experiences, gamification, and other personalized touches can help foster deeper emotional connections that drive enduring loyalty. 

These connections are increasingly important when it comes to captivating a high-value audience spoiled for choice. The National Restaurant Association (NRA) reports that guests belong to an average of 3.6 restaurant loyalty programs, with Gen Z adults belonging to 4.4 programs. Deloitte also found that nearly half (47%) of restaurant loyalty members use their memberships several times a month, and almost a third (32%) do so several times a week.

The importance of strong and healthy loyalty programs is underscored by the fact that it’s easier to keep a customer than acquire one. According to Invesp, new customer acquisition costs five times more than retention, and even a modest 5% increase in customer retention can boost profits 25-95%. 

Regular guests create 80% of your future revenue, according to McKinsey & Co., so make sure you win their hearts with a loyalty program that builds your brand and delivers exceptional experiences. 

Understanding Loyalty Program Health  

As restaurant and convenience store loyalty programs continue to soar in popularity, operators must make sure their program remains the most attractive option for guests. Consistently measuring and monitoring key performance indicators, including the following three, is essential:

1. Enrollment (percentage of total guests in program; rate of new members joining) 
2. Engagement (visits, average check size, reward redemption) 
3. Attrition (lapsers and leavers) 

By gathering and analyzing guest data in real time, operators can identify problem areas and adjust for program optimization. One of our reports, 6 Campaigns to Drive Guest Engagement with Advanced Segmentation, describes several approaches that can dramatically improve loyalty program health. Here are a few of the highlights: 

• “Almost there" reminders drove a 5.5% visit lift for one quick-serve restaurant (QSR) by notifying loyalty members of how close they are to their next reward 
• A spend challenge promotion achieved a 14% incremental lift in check sizes by incentivizing larger orders 
• An outreach to potentially lapsed loyalty members generated 23% incremental spend 

Driving Members Through the Loyalty Lifecycle  

While getting a steady stream of new loyalty program members is an important first step in building a healthy loyalty program, true success hinges on your ability to move members into more valuable categories. If guests sign up for a loyalty program but fail to actively participate, the initial sign-up incentive has been wasted.

For new members, educational nurture campaigns can create stickiness. By deploying a nurture campaign that sends four reminder messages based on real-time activity, we helped one QSR achieve a 15% lift in new members hitting the three-visit mark.  

Some new members may become core loyalists almost immediately, while others may linger as potential loyalists for an extended period. Maintaining interest and preventing churn are paramount objectives for this critical group of potentially valuable guests, who are often motivated by: 

• Surprise rewards and unexpected delights 
• Exclusive access to limited-time offerings or experiences 
• Tier progression opportunities with incrementally better benefits 
• Gamification and achievement-based challenges 

As loyalty member lapses occur, operators must also be poised to quickly identify at-risk guests and deploy 1:1 win-back strategies for those who have deviated from their regular visit pattern. Three proven techniques include: 

1. Tailored incentives based on the reason for lapsing 
2. Reminders of loyalty program tenure and accumulated benefits 
3. Limited time offers for re-activation 

Captivating Modern Guests with 3 Innovative Loyalty Engagement Experiences 

While monitoring loyalty program health and mastering strategies for progressing members through the loyalty lifecycle remain vital for loyalty program excellence, today's guests increasingly expect operators to get creative when it comes to making them feel special.  

To truly captivate modern audiences, brands must evolve their loyalty initiatives to incorporate innovative experiences that cater to guests' desires for flexibility, personalization, and emotional connection. Implementing forward-thinking program features like customizable rewards, values-based initiatives, gamification, and tailored surprise-and-delight moments has become essential for building loyalty that endures and maximizes share-of-wallet potential. 

1. Prioritizing Guest Preferences 

Today's guests want flexible, personalized rewards that empower them to maximize value in preferred ways. Tiered rewards, memberships, and subscriptions cater to this, offering choice and control while driving stickier loyalty and revenue growth. 

Advances in technology have enabled brands to adapt their programs to meet ever-evolving guest expectations in real time, tailoring experiences to demonstrated behaviors. This greater flexibility and customization allow loyalty initiatives to remain relevant across diverse customer segments. 

When convenience store brand Break Time came to us for help, for example, we updated their loyalty program with a flexible tier structure based on frequency and spend. By monitoring monthly member behavior, the program automatically triggers personalized messages when members approach new tiers and achieve new milestones. Soon after launch, 12,000 guests achieved top-tier status and loyalty members were responsible for 42% of all transactions. 

In a comparable way, we helped Smashburger achieve a 20% increase in spend and a 16% lift in visits using AI-powered micro-segmentation. Automated campaigns and personalized offers tied to individual preferences (French fry lovers, vegetarian guests, etc.) delivered a 61x return on investment (ROI).

As pressures mount from continually shifting consumer habits, inflationary factors, and other economic elements, restaurants and convenience stores must aim to build flexibility into their loyalty programs––an agile approach that recognizes the strategic value of guest loyalty as a driver of sustainable growth. 

2. Shifting to Emotional Loyalty 

While traditional loyalty programs focus heavily on transactional rewards like discounts, modern guests also seek experiential and emotional benefits that create deeper connections. This value equation factors in quality, uniqueness, experience, customer service, and community, rather than a focus on discounts alone. 

As National Restaurant News highlights, an ongoing industry debate is raging between operators who favor discounting versus those who prefer to emphasize everyday value by emphasizing food quality, service speed, menu items, experience, or price. Operators who’ve been taking a break from discounts argue that it improves revenue, while those who’ve been leaning into discount promotions say they do so to increase traffic. While operators decide which approach works best, the key to success will lie in striking the right balance between “enticing customers with deals while making sure revenue still grows.” 

The most successful loyalty programs blend both approaches, providing special pricing and earnings capabilities that make financial sense, complemented by engaging emotional features that elevate the overall guest experience. Deloitte points out that emotional benefits help operators earn greater “share of heart,” which can dramatically increase customer lifetime value (CLV). 

Three examples are: 

• Peet’s Coffee’s Peet’s After Dark, an exclusive event featuring food and beverage influencer Olivia Noceda mixing mocktails and sharing special cake recipes 
• Dutch Bros’ limited-edition mystery sticker 
• Jimmy John’s offering The Ciao Down silk scarf, a limited-edition item to promote the return of fan-favorite Caprese Salami Pesto Wrap as well as its Italian heritage

The goal is to connect with loyalty members on such a deep level that they rely on your brand to make their lives easier, more fulfilling, and, in some ways, more complete. Here are four of the ways operators are making these kinds of important connections: 

1. Affinity programs tap into guest passions and values by linking brands to relevant causes and facilitating community involvement like volunteering or donations. 
2. Early and exclusive access to new offerings, influencer collaborations, and feedback opportunities help make members feel special. According to Deloitte, 60% of consumers rate early access to new products and experiences as “important” or “very important.” 
3. Upgraded or premium service, via priority seating, carryout lines, or dedicated service channels for loyalty members can incentivize more purchases. In the same Deloitte survey, nearly two-thirds of respondents said they value this type of treatment.
4. Partner programs facilitate engagement with multiple brands that are meaningful for guests. For example, two loyalty giants, Delta SkyMiles and Starbucks Rewards, joined forces in 2022 so members of both programs can earn one mile per $1 spent at Starbucks and double Stars on days they travel on Delta. 

By carefully designing loyalty strategies around emotional connections, operators can forge longer-lasting bonds with their most valuable guests. 

3. Gamifying for Excitement  

People inherently love to be recognized for their achievements, which is why gamification is a powerful engagement tool for restaurant and convenience store marketers. By leveraging deep insights into guest behavior derived from loyalty program data, brands can build engaging initiatives that create the excitement of competitive fun. 

Challenge rewards, surprise and delight programs, and digital "treasure hunts" all provide avenues for gamification that drives engagement. For example, a coffee chain could award a special badge to members who check in for their morning drink five days in a row, then offer a surprise free drink after two consecutive weeks of the daily ritual. 

A casual dining restaurant may run a quarterly game in which members earn entries into a prize drawing by trying limited-time menu items or redeeming rewards on specific days. The possibilities are endless when combining gamification elements like competition, achievement, and unpredictable rewards. 

These three real-world examples demonstrate the impact of thoughtfully designed gamification strategies: 

• Original ChopShop’s “Four Visits Fast” challenge helped turn new loyalty members into more frequent visitors.

• Great Harvest Bread Co. drove 35% increases in visits, frequency, and spend, using AI to create engaging, 1:1 "Visit Challenges." 

• Dutch Bros used earned in-app stickers and other gamification elements, like connections for special offers or freebies, to revitalize its old loyalty program and gained 1.4 million members in the first month.

By tapping into universal human motivations like instant gratification, social recognition, and leveraging low input for high output results, restaurant and convenience store brands have another way of transcending purely transactional loyalty benefits. A gamified experience transforms loyalty programs into entertaining journeys that keep guests excited for more. 

Revitalizing Loyalty Engagement Today 

Loyalty programs with transactional benefits alone are simply outdated. To cultivate a healthy, long-standing loyalty program, brands must pay more attention to creating emotional connections and designing engaging experiences that meet modern guest expectations. 

Prioritizing engagement is no longer a nice-to-have for loyalty programs—it's an imperative for cultivating long-lasting customer relationships that drive sustainable business growth. By embracing these strategies today, operators can revitalize their programs to maximize their full revenue-generating potential. 

To learn how Paytronix can help you develop a high-performing, personalized loyalty program tailored to your business, download our complimentary loyalty guides for restaurants or convenience stores today. Or contact us to discuss taking your customer loyalty strategy to the next level.