Posted: 11/11/2020

Make data the real driving force behind your café’s loyalty scheme

Make data the real driving force behind your café's loyalty scheme

A loyalty scheme is a tried-and-tested mechanism for retaining customers, but they have come a long way from a simple get-your-10th-free-style stamp-collecting exercise, and now technology has brought things a step further and simplified the execution.

The obvious way loyalty programmes build customer relationships is through benefits – rewards, discounts and freebies – but the true driver behind successful modern schemes is data, according to industry experts.

Typically, when most people think of loyalty schemes, they tend to picture a card and the accumulation of points in exchange for a free product. But, says Nigel Bogle chief executive of The EPOS Bureau, while that traditional model still works for many, there is a greater opportunity for retailers if they look more closely at the numbers behind these schemes and the insights they provide.

“From a business owner’s perspective, when a customer uses their loyalty card, it should be a trigger to their system to say, ‘Hey, I shopped with you today and here’s what I bought when I was in your café or restaurant’,” he says. This can then be used to spot patterns, and, in turn, for the business owner to tailor offers and entice greater spend. “For example, the system could automatically detect that it’s been a few weeks since the customer last visited and generate a voucher for the retailer to encourage a return visit.”

Utilising a digital loyalty scheme also gives insight into who your customers are.

Tsewang Wangkang, CEO and founder of app-based digital loyalty platform Embargo, says that data harvested from the app has revealed that, for most cafés on the platform, 85%-90% of transactions come from just 100-200 customers. “At the core of your business is your customers, and at the core of the core are a small number of return customers and it’s really important to know who they are and that you have a communication channel with them,” he says.

Having the data on customer behaviour and a way to connect with your clientele that digital loyalty programmes offer allows you to be proactive, rather than reactive, if customer numbers wane, according to Wangkang. 

“It’s about anticipating, through the data and analytics, when and why things change,” he says, “because usually when venues realise that customers have stopped coming and start reacting, it’s too late. Having the data gives you a chance to pro-actively manage your customer base and anticipate if things are going in a certain direction.”

Oliver Stubbins, general manager of Worksop-based Welbeck Farm Shop & Harley Café, uses EPOS Bureau technology across both retail and foodservice and has used the system to drive traffic during a mid-afternoon let-up in custom.

“We spotted a lull from 3pm and offer a coffee & cake deal at that time which has the effect of getting people to stay for an extra stint or freeing up tables over lunch when we are busier anyway.”

Stubbins has also used The EPOS Bureau’s data to target lapsed customers who haven’t used their card in several months to entice them back with offers. He does admit that the business doesn’t “currently use the data to anywhere near its potential”.

And making the most of this data is crucial. “There is no value in just collecting data. It’s about getting personalised data and then being able to communicate specifically with the customers you need to,” says Wangkang.

“Getting the data into the system is just the first step,” says Bogle. “The retailer’s next challenge quickly becomes how to get actionable insights out.”

Here, too, technology is your friend. “With the right tech, you can quickly and easily identify the people you want to ‘talk’ to, tell your EPOS system that they are the group that deserve a special set of benefits and communicate with this group,” he says.

And, crucially, this is not the endpoint. Tracking customer uptake of the ‘carrot’ offered is the next key piece of data. “What’s the point of pushing out content and offers and incentives if you’re not sure who is listening,” Bogle adds.

With all the number crunching, it’s easy to forget that at the base of all the data are real people. The purpose of this resource, according to Bogle, is ensuring that you are not just churning out a one-size-fits-all scheme. 

Data gives you the opportunity to focus specific offers at specific customers, but make sure that they feel special, and not like the numbers on a screen you’ve used to target them.

Read the latest edition of Fine Food Digest here.

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