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Contactless Solutions for Restaurants and Takeaways with Digital Menus, Online Ordering, Schedule Order and Online Payments

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Courtesy: the-ken.com

Reverse engineering loyalty

The concept of ‘customer loyalty’ has been decimated over the last digital decade.

Well, not exactly decimated, but transferred to aggregators and inextricably linked to plum discounts on the platform. Loyalty was bought, rather than invoked. Restaurants and hotels had to partner with aggregators, or risk losing business in a new type of loyalty regime—partial to cold, hard bargains.

What restaurants originally espoused was a type of “emotional loyalty”, which was only partly driven by discounts. The concept is archaic now. Personalisation is left up to a bot, not a human handshake. But emotional loyalty can have a more sustainable impact, says customer experience expert Don Peppers:
"If you’re trying to improve customer loyalty at your company, you shouldn’t think of customer churn as a disease, but as the symptom of a disease, like a fever. When fever symptoms are severe enough, the doctor will want to treat the fever immediately and directly, and reactive churn prevention is like providing a cold washcloth to help cool a feverish patient. But the doctor also knows that the only long-term solution to reducing a fever is to administer medicine or therapy to help cure the underlying disease causing the fever (proactive churn reduction)."

So think of the behavioral dis-loyalty of your customers as a fever affecting your company, while the actual disease causing this fever is their emotional dis-loyalty, probably caused by a faulty customer experience, marked by friction and the absence of any genuine human connection.

The death of the bargain

With Covid, all previous trade-offs between emotional and behavioral loyalties are off. Discounts—by aggregators—are on hold. No one’s making plans to go anywhere. So what sticks?

Emotional loyalty

Restaurants and hotels are now trying to pilot a new type of pull tactic—pay now, buy later. The National Restaurant Association of India’s Rise4Restaurants scheme asks customers to buy discount vouchers now to redeem at restaurants when they reopen. It still uses the bait of a one-time 25% discount, but effectively the scheme has inverted the logic of “Buy now, pay later”. And with it, the idea that customer loyalty will continue to be driven by discounts, not emotion.

An interesting scheme, Rise4Restaurants puts a customer’s true emotional loyalty to test. Will you come back when we open up? Do you trust us? In this case, the discount is just a garnish. This type of emotional loyalty begs the question: do you value the brand or the discount?