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Rewards programs – The Basics

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Rewards programs – The Basics

Rewards programs have been around for decades. But are they worth the time and investment? 

Those who feel the call as a restaurateur know that a great atmosphere, menu, excellent service and the right location can only take you so far. It all comes down to your customers and delivering increased value to profitable customers to convert them into loyal customers who become even more profitable over time. 

Rewards programs – Cartoon


The most successful restaurateurs understand this approach and make it a point to get to know their best customers personally, offering them special services and attention. The more opportunities you have to continue connecting with your customers, the higher the chance of converting them to regular patrons. While a social media presence can help, there is no guarantee that you are reaching your profitable customers. 

The Advantages

A Rewards program can take care of both and ensure you reach your intended audience. While short-term promotional giveaways or specials of the month can motivate new or existing customers to try a product or service, a rewards program focused on building loyalty has several benefits and advantages for your establishment, over and above an uptick in sales.

  1. A rewards program can accelerate the loyalty life cycle, encouraging first-or second-year customers to behave like a company’s most profitable tenth-year customers.
  2. Rewards programs can accelerate loyalty by delivering increased value to profitable customers. 
  3. Loyal customers become even more profitable over time.
  4. Consumer insight and trends are easier to identify among your regulars.
  5. Rewards Program can be an effective way to build buzz and get valuable customer feedback before adding them permanently to your menu. 

Building A Rewards Program

 Despite the advantages, rewards programs are widely misunderstood and often misapplied. Focusing on a long-term strategy to build loyalty will better guide how you implement your Rewards Program. 

  • Decide what you want to achieve with your program. Are you trying to boost sales quickly or is this part of building a loyal customer base? 
  • Choose who you want to target. Not all customers are equal and your core focus should be to get your profitable customers on your rewards program – or you will fall into the trap of only luring customers looking for a freebie.
  • Set a goal and make it specific, realistic, measurable and attainable on time. Wanting to spend two weeks on a program you intend to use to triple sales for the next six months might be a little too ambitious. Start small and adapt your goal to keep momentum, remember there is no direction but up. 
  • Set a budget and keep track of all the costs associated with your program. While rewards are ultimately designed to bring in more sales, they have a cost. Your costs should be carefully monitored and accounted for.
  • Make your program feasible, a rewards program should be beneficial to both parties. Customers are looking for better value you want to make a profit. So offering a free drink or meal should not break the bank. 
  • Design your program that requires customers to perform in a specific way, but is straightforward enough to achieve. For example: Offering a free drink on sign-up gets customers onto your program, and offering a free meal after six purchases over R50.00 through the rewards program keeps them returning.

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