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*Disclaimer: Updated February 2016 to reflect more current statistics. Originally posted in July 2013.

A National Restaurant Association study of tabletop marketing recently found that promoting loyalty programs led to repeat visits for 72% of patrons.

Now, other than stating a precise percentage, this finding is probably not an earth-shattering revelation on its own; get customers to join a loyalty program when they visit your restaurant, and there’s a good chance they’ll turn into repeat visitors. What’s more interesting is the question that the study doesn’t (fully) answer: the “how” of loyalty programs.

Specifically, “how do you get your customers to engage with your loyalty program?” Say you’ve recently initiated such a program and are advertising it on tabletops – as the study (rightly) suggests you should do. How do your customers go about joining that program? What is the best way to engage with those who have joined?

If your answers to the above questions involve an email address sign-up, followed by emailed newsletters and coupons, you may be losing out on valuable repeat visitors.

Instead, consider implementing a similar program via SMS. SMS is a far more effective method – from start to finish – of executing an effective loyalty program, and represents the best shot of achieving that 70%+ repeat-customer rate.  Here’s why:

Opt-ins: Getting Members

Let’s start with the initial opt-in. Your first goal with a loyalty program is to get customers to sign up. For this task, email is simply not all that practical in a restaurant setting – especially when compared to an SMS opt-in. Consider that, if you’re trying to opt users into an email list, your main options are:

  1. Have a customer physically write their email address down (to be added by staff later)
  2. Hope that a customer will remember the offer later and opt-in via web-form or email from home
  3. Expect that your customer has a web-enabled phone that would allow them to opt in while at the restaurant

Arguably, your best option of those three is to have a customer use their phone to hit a web-form to subscribe. However, if you’re already asking customers to use their phones to join your list, why go a route that introduces additional friction into the process (i.e. smartphone-only, WiFi-dependent, email address length, “where’s the ‘@’ sign on my phone”, etc.)?

A much simpler option, which requires minimal effort on your customers’ part, is to simply ask them to text a keyword into your restaurant’s 5-digit short code (e.g. “Text REWARDS to 55155”).

Acquisition, of course, is not just limited to a mobile number database: SMS is a perfect way to drive app downloads.

Views/Opens: Getting Eyeballs

OK, now that you have subscribers – let’s move on to how you’ll get them to read your updates. After all, an enticing offer with compelling copy and a strong call-to-action is completely wasted if members don’t bother to open the message. Your next goal, it follows, is making sure all those subscribers actually see your content.

Here is where SMS really starts to dominate traditional Email-marketing. The popular Email Service Provider, MailChimp, lists 22% as a benchmark open-rate for the Restaurant industry (across all industries, the average is probably closer to 25%) as of January 2016. Contrast that with a whopping 98% (!) open rate for SMS, based on a 2014 study of mobile customers done by Dynmark. SMS provides a clear advantage by increasing – by orders of magnitude – the number of members who will actually view your content.

Engagement: Getting Foot-traffic

After building your list and maximizing the number of people reading your content, the final goal is to use your program to incite some action from your members. Most likely, you want to give them a reason to come back a second/third/so-on time.

At a basic level – just for starters – SMS subscribers tend to engage with SMS marketing campaigns far more than email subscribers engage with email campaigns. Another recent study which compared SMS to Email, found that SMS has 5x the response rate of email marketing.

On top of that, SMS marketing presents immediacy advantages. Remember the 98% open rate for SMS from that 2014 study referenced earlier? Well, what may be even more impressive is that the same study also found that 90% of SMS users read messages within three seconds of receiving them. The implication that follows for restaurants is that SMS is a perfect way to implement time-sensitive offers to subscribers. Perhaps to bolster traffic at times when people are not normally dining at your restaurant, or to instigate foot traffic during a particularly slow day.

One final advantage of SMS: proximity. Customers always keep their phones within arms’ reach and have the potential to receive offers – not just when they’re at their computers, but also while they’re on the go (perhaps looking for a place to have lunch today).

At the end of the day: whether your goal is getting more subscribers, more eyeballs or more customers through your doors, choosing SMS marketing for implementing your loyalty program has the potential to affect huge gains in levels of repeat business.

Mobile marketing makes creating a proprietary loyalty program quick & simple for marketers in any industry. If you’re interested in learning more about creating such a program via SMS, see a quick demo of Waterfall’s platform.

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For more information on SMS vs Email Marketing, check out the following articles:

SMS vs Email Marketing: The Gloves Are Off

Email vs Text: What Do Customers Prefer?

Email vs. IM vs. SMS: Choosing the Right One

SMS Versus Email Marketing

 

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