What is the best loyalty program to increase your number of customers, the answer to this is easy, it’s referrals? But you probably already knew that, so let me elaborate more. In the world of tech, growth is everything but if growth is not fast or you are essentially considered a “dead” business. This is why many tech startups adopt the philosophy of “growth hacking”, putting growth on steroids. So how does this apply to the restaurant industry or your own business, if you are not a tech startup? Well because for most restaurant owners, technology is not at the core of their business, when truthfully it should be. Restaurants can apply the same growth hacking tactics that these billion-dollar tech companies have had in the past.

In this quick post, I will give you a few examples of how to growth hack your brick-and-mortar operation using technology and a loyalty program. First, you will need an app, not a website or anything that could suffice. The reason you need an app is that an app provides security and makes it much easier to identify referral fraud. You do not want people to just be referring to themselves and reap the benefits. Another reason is that it is the easiest medium to access and more attractive for customers to recommend. A customer is 2.4x more likely to recommend a sign-up for an app than for a website. The growth hacking will come from utilizing your existing loyalty program and creating “planned obsolescence”.

Refer a friend and earn points

In your app, you will want to make your loyalty program very obvious to your customer and market the reward for referring customers. You will want to set your reward system for referrals to be in the best interest of a customer. So say you have a redemption loyalty program, you would want to make your rewards in such a way that if a customer were close to a reward they will still have to spend more to get it or get over that hump. A customer should not be able to earn the exact amount of points needed for that reward. With this in mind, you would offer customers points for referrals the same way they would as if they would have ordered and when they are close to redemption or however your loyalty program is set up, they will need “just one more”.

Minimums

You can set reward redemption minimums, say you have a cashback loyalty program, you could set your cashback minimum to $25 and for each referral, a customer earns $10 in cash back, so a customer will need to at minimum refer 3 people just to even redeem their cashback. This is how growth hacking gets its name, your hacking your way into your customer mind to make them perform certain actions.

Exponential, the more you do, the more you earn

You can set rewards for referrals to be exponentially greater, so the customers who work hard to get you new customers have a bigger incentive to continue. This is a good option to prevent burnout or loss of interest in referring customers if a customer has already redeemed the reward and does not want to get the same thing over and over again.

Referrals that are worth it

It is one thing to get a view, it is another thing to get a signup, it is completely another thing to get a sale. Make referrals worth it, as restaurant signup is worth a lot but it is not worth more than a sale. Require your customers who refer other customers to make the referred customer complete a task. For example, a referral counts if and only if the referred customer makes their first order over $8 or spends over $15 in their first month of signing up. This can help reduce referral fraud and produce valuable customers. Obviously, you would not rely on the referring customer to communicate this information to the referred customer, you would make this obvious in the referral process to both parties.

Switch it up

Do not be static or plain and have one referral program for all your customers. You should give different customers different referral programs to see which one’s perform the best and also change the referral approach and reward now and then, like every 30 days. This will help you diversify your customer base and allow you the flexibility to personalize referral programs to each customer and further their effectiveness. It would not be too far-fetched to assume your regulars are more likely to bring in new possible regulars compared to a first, second, or third-time customer. Make your referral programs tailored based on a customer’s ordering behavior, engagement, a lifetime with the company, etc to really get all the potential out of referral programs.

If you are interested in growth hacking, here is an article to start your journey