Editor’s Note: This post was originally published on September 20, 2016 and was updated for accuracy and comprehensiveness on Aug 23, 2018.
If there is one industry that lives and dies by repeat purchases, it's the food and beverage industry. The ticket prices are relatively low and margins are slimmer than other industries, meaning you need to sell in high volumes! Volume can be created by getting people to buy more per visit or by getting them to visit more often, which is where a loyalty program comes in.
The food & beverage industry is extremely competitive. You are not only competing against other shops like yours, but you are also competing against all of the alternatives. This stiff competition means that food and beverage companies can really benefit from creating customer loyalty.
Wondering what this looks like in practice? Here are 4 examples of effective loyalty programs in the food and beverage industry, split between restaurant locations and retailers of food/beverage products.
Happy Way's Happyway Fam
Happy Way is an organic and natural health snack brand from Australia with a best-in-class rewards program. In an increasingly crowded space that often takes itself too seriously, Happy Way differentiates themselves with eye-catching pops of color and joyful graphics.
They leveraged this approachable branding by creating a brand community with their rewards program. While they do reward members for social sharing and making purchases, their program is primarily centred around the power of referrals.
Each referral creates a potential new customer and shows that existing customers trust and love the product. For a new, thriving business like Happy Way, this is incredibly important. With a continuous cycle of engaging and sharing embedded into their brand experience, the Happyway Fam program will help them continue to experience this exciting growth for years to come.
Starbucks’ Starbucks Rewards
Not only is this program one of the best loyalty programs in the food and beverage industry, it is also one of the best loyalty examples in the world. Starbucks has done a fantastic job motivating loyalty in their customers.
The thing I like the most about Starbucks is that it uses a premium rewards level to incentivize customers. While the use of tiers is often most effective in cosmetic programs or with other luxury brands, it fits in extremely well with Starbucks’ program due to the brand image they have created.
These tiers motivate customers to shop more often in order to achieve that gold status. Sometimes the best motivator in a loyalty program is not the rewards, but the thrill of the chase. Everyone wants to be the best, and Starbucks challenges you to do so!
With their loyalty program, Starbucks put together an amazing loyalty explainer page and even a video to quickly explain how to use the program and the benefits you receive.
Like I said, Starbucks is not only one of the best beverage loyalty programs – it is also a top 5 loyalty program in my opinion!
While Chipotle's loyalty program was simply promotional and is no longer active, it remains a noteworthy example of the new era take on the classic loyalty punch card.
To participate in the program, customers were required to purchase a certain number of entrees to begin earning entrees for free. While this sounds fairly simple, the program was more than meets the eye. If customers stayed loyal for the entirety of the program, they began to unlock merchandise and experiential rewards like hats and catered events.
As previously mentioned, this loyalty program took the classic punch card program to the next level! Shoppers were rewarded for their frequent patronage, and their ability to earn was restricted to a three month period. This definitely encourages shoppers to increase their purchase frequency and lower their average time between purchases. All in all, this is a basic yet effective way to drive the metrics that a food and beverage loyalty program should deem important.
Jones Soda’s Jones Rewards
Jones soda is an amazing example of a food and beverage loyalty program done right! While there are multiple reasons why, let's hone in on two. First, Jones does an amazing job of nurturing new loyalty members. By sending tailored email communications that offer members 100 points just for joining, Jones demonstrates their understanding of how important customer information really is.
When members join the program it gives Jones an opportunity to market to them in the future, especially if they find the program engaging!
The second area that Jones excels in is how they use their loyalty program to establish a sense of community. By selling soda online, Jones knows that they are asking customers to trust their brand and their product without tasting it first. While it's initially hard for customers to trust companies without a reference point, they do trust other customers! Incentivizing shoppers to share their opinions with points creates more of a conversation around the products and offers new customers valuable social proof.
As you can see, Jones offers program members points for leaving product reviews, as well as engaging on social and making purchases. This social community establishes trust for new shoppers by offering evidence that previous customers love the product. With valuable rewards on the table, Jones Soda has ensured that this cycle will continue with every new member of their program.
Tips for loyalty programs in the food and beverage industry
I hope the above examples have inspired you to find ways to improve your own food and beverage brand’s retention strategy. Since we’ve had the privilege of developing rewards programs for so many businesses in this industry, we've compiled three of our loyalty best practices, just for you:
1. Gather customer information
Because the food and beverage industry is all about selling high volume, you need to have as much information about your customer as possible. We always recommend giving bonus points to your customers when they register for a customer account. This gives you more info to market to them in the future.
2. Reward customers for sharing their experience
Because you cannot sample or smell online, it's important for your brand to establish trust in another way. The best way to do this is to encourage your existing customers to show new shoppers how awesome your products are.
We recommend that you reward points for actions like leaving a review, sharing your store on social media, and even following your social accounts. This gives new customers who have not tried your product the confidence to do so!
3. Try a percentage-based reward
A percentage based reward encourages customers to spend more. The more they buy with that purchase the more value they get from that reward. Just keep the percentage reward lower than your average profit margin and you have a win-win strategy.