True Loyalty Rewards for Restaurants Comes Via Texting

Forget loyalty programs—the true measure of customer fealty comes from exchanging text messages. That’s the main point of a multi-year survey of restaurants and patrons by customer relationship management platform Mobivity. Its 2021 Restaurant Text Marketing Benchmarks report shows a 44% lift in restaurant visits among text marketing subscribers (those who share their mobile numbers with restaurants they’ve been to) vs. non-subscribers. Mobivity’s report encompasses 15 million subscribers and 500 million transactions between 2018 and 2021. The correlation between people who opted into a restaurant’s SMS list seems fairly obvious. Who would give their primary contact info to a place they didn’t plan to frequent? Despite Some Risks, More Brands Are Blowing Up Consumers’ Phones With Texts But Mobivity’s data tells a deeper story about the way loyalty/reward programs function and the value of inspiring one-to-one connections between brick-and-mortar businesses and always-online consumers, said Chuck Moxley, Mobivity’s svp of marketing. “Too often, restaurant operators equate a loyalty program to a rewards program. Our data demonstrates that guest loyalty—as measured by increases in guest frequency and spend—increases simply because your brand is top of mind, appearing in their text message inbox once or twice a week,” Moxley told Adweek. Bribery's cost Texts from restaurants can take several forms. Sometimes, a customer gets what the restaurant hopes is a valuable offer, typically presented exclusively for SMS subscribers. Other messages simply promote a new menu offering or other reasons to visit. Joining a text program is like being a part of an “exclusive club” for your favorite brands, Moxley said, and a consumer is attracted to that invitation by being rewarded with offers, savings and insider tips—not the promise of a discount, which is ultimately cheapens the dining establishment's brand. Secondly, coupons sent via text train recipients to associate the restaurant’s communications with a deal, as opposed to more meaningful incentives. “If restaurants want to drive guest loyalty, they don’t necessarily have to bribe the customer to visit—they just have to remind them to visit,” Moxley said. “And text messaging, with an open rate of 5 times to 20 times higher than email or app push notifications (respectively), gets the message in front of them often at an ideal time when the consumer is making a dining purchase decision.” Texting saves Measuring the incremental spend of SMS subscribers, Mobivity found that the average subscriber spends an incremental $12.15 in the first six months of being in the program. On top of that, retention rates are multiples higher than email or apps. “About 90% of subscribers are still in the program two years after joining,” Moxley said. “Which means their lifetime incremental value can be substantial.” While the report’s finding of a 23% lift in guest frequency and spending among restaurants' SMS subscribers isn’t that surprising, that retention rate, coupled with a 718% return on marketing spend (ROMS) was not something Mobivity predicted, Moxley said. To get a sense of what that ROMS percent signifies, for every $1 brands invest in text message marketing, they are seeing a return of $7 in purchase redemptions driven by weekly, personalized text message offers. “We instinctively know that text message marketing programs drive value for restaurant operators,” Moxley said. “Remember, 718% was just the average ROMS—there is no reason that a [company] optimizing every aspect of their messaging program and using data to personalize offers and messages to engage their subscribers one-to-one won’t see a ROMS much higher than this.” Asked for specific real world examples, Moxley pointed to one client, Famous Dave’s, a Midwest barbecue chain with 180 locations, reporting a 50 times return on its SMS program. New England-based Papa Gino's and D'Angelo Grilled Sandwiches saw its Mobivity-powered mobile messaging program deliver a 440% average ROMS. A slice in time It’s not lost on Mobivity that the survey needed to account for the devastating impact the pandemic has had—and is still having—on restaurants. Mobivity’s client analysis takes into account such factors as Covid-19 and seasonality to demonstrate lasting trends, Moxley said. The analysis does not use a “static slice in time” for all SMS subscribers, he added. Rather, Mobivity based its findings on when consumers joined the text club, ranging from April 2018 to June 2021. “While things like Covid and seasonality play an influencing factor, it is minimized and balanced by the methodology,” Moxley said. For instance, frequency would have gone down for people joining a few months prior to the start of the pandemic—in general—but has gone up for people joining as Covid-19 restrictions and fear ease. “Our analysis has a balance of when subscribers joined and is not heavily influenced by any one particular date or event,” Moxley said. “The program retention rate has always been high, dating before Covid-19. And we expect redemption rates will only improve as more customers feel safe to return to restaurants and adapt to the new normal.” Restaurants That Thrived During Covid Can Thank On-the-Go Diners