Restaurants Compete to Make Loyalty Programs Stand Out as Consumers Join Multiple Programs

Most consumers returned to dining inside restaurants in 2021, but recently developed habits and digital preferences are determining the strength of their loyalty to their favorite restaurants, according to recent PYMNTS research. Many consumers’ affinity for digital conveniences makes technical features a must for increasing customer loyalty.

Digital Divide: Minding The Loyal Gap, a PYMNTS and Paytronix collaboration, reveals loyalty programs’ impact on customer engagement levels and analyzes how restaurants and food brands can use the programs to build and retain followings. The report presents findings on shopping behaviors taken from a United States census-balanced survey of 2,414 participants conducted between Nov. 11 and Nov. 16.

Consumer dining habits have been altered by the digital shift that occurred during the pandemic, and savvy restaurants are now seeking to leverage technology to make dining in more appealing to consumers.

Restaurants aim to engage consumers in new ways, and a critical driver of engagement — customer loyalty — is itself driven by the smart deployment of technologies. A significant gap separates many consumers from the loyalty programs they desire and the digital tools they wish to access to minimize friction in their ordering experience.

Consumers are not just engaging with new digital tools more frequently, but are also articulating their importance to their overall satisfaction with their favorite restaurant. Nearly half of restaurant patrons engage with a loyalty program somehow, and as many as 34% say that tangible improvements to the way they pick up and order food will have the greatest impact on their loyalty.

The report also found that consumers are using their mobile devices to connect with restaurant loyalty programs in person and online. Mobile technologies are key to consumer engagement, as half of patrons interact with their favorite restaurants’ loyalty programs via the restaurants’ mobile apps. The most common way for table-service restaurant patrons to interact with a loyalty program is through the restaurant’s mobile app, with 50% of loyalty program users doing so.

More key findings from the study include:

• Direct ordering is back: In the last month, 68% of consumers ordered from a restaurant — not through an aggregator — and digital tools that make ordering more convenient powered their engagement.
• College-educated adults and consumers who earn more than $100,000 annually exhibit the highest engagement rates with local restaurant loyalty programs, at 50%.
• Sixty-four percent of Gen Z patrons and 61% of millennial patrons participate in loyalty programs at a minimum of one or two of the table-service restaurants that they frequent.
• Consumers using loyalty programs are willing to spend more at local restaurants to earn customized discounts.

To learn more about how digital features can help restaurants power engagement with consumers, download the report.