Venue operators continue to seek innovative ways to retain customer loyalty amidst ongoing market uncertainty and price consciousness. For these reasons, Zonal’s latest GO Technology Report in partnership with CGA by NIQ uncovers strategic insights into brand loyalty. According to the latest findings, loyalty in the hospitality sector largely revolves around operational fundamentals:
- High quality food and drink
- Great service
- Welcoming atmosphere
Consumers expect venues to get these basics right, rewarding operators that do with repeat business. Nevertheless, building loyalty through experience is no longer enough in current market conditions.
The report suggests strategic digital engagement with consumers supports brand loyalty and encourages repeat visits. Given almost three quarters (73%) of consumers say they are happy to be contacted by restaurants, pubs, or bars, the potential is clear for venues to effectively communicate with the majority of their customer base.
However, the research reveals varying consumer preferences for communications across different demographics. Younger consumers, particularly those aged 25 to 34, are most receptive, with only 20% not interested in being contacted. Parents and regular visitors to the On Premise are also more open to receiving messages than non-parents and infrequent guests. Accordingly, the report advises segmented communication targeted to these nuanced preferences.
In terms of how consumers want to hear from venues, email remains most popular among almost half (47%) of consumers, almost three times as many as those who prefer newer platforms like social media (17%) or WhatsApp (15%). This preference reinforces the value of traditional communication, especially when used in a meaningful way and without bombarding customers.
In addition, the report identifies loyalty schemes as an allegiance magnet, with the potential to prevent a hefty 90% of consumers open to loyalty programmes from defecting to competitor venues. But loyalty schemes only perform optimally if they align with specific consumer pain points.
The most appealing benefits are financial savings, with almost half (49%) of consumers favouring member-only pricing, a model gaining traction in retail, but yet to fully take off in hospitality.
Other popular loyalty programmes centring around cost savings include:
- Points-based schemes (39%)
- Cashback offers (37%)
- Deals on regularly purchased products (29%)
In contrast, younger consumers and regular guests are also interested in rewards like prize draws and subscriptions, although these incentives hold far less appeal compared to straightforward financial savings.
At the same time, the report also cautions against barriers to loyalty programme adoption, with more than a third (38%) of consumers put off by upfront membership costs, almost a third (29%) deterred by subscription lock-ins, and 22% discouraged by a perceived lack of value. It is essential for hospitality brands to address these concerns when aiming to win the loyalty of a wider customer base.
Karl Chessell, Director – Hospitality Operators and Food, EMEA commented: “Customer retention is key to long term success and loyalty is hard-earned. But it can be bolstered by thoughtful, targeted communication. Brands striking the right balance between in-venue experiences and strategic engagement outside the venue are better placed to retain their existing customers, despite the crowded market. It’s all down to understanding the value of these loyalty drivers, and incorporating them into a broader, cohesive brand experience that keeps customers coming back.”
Click here to access the latest report. GO Technology is based on an exclusive survey of 5,000 nationally representative British consumers. To discuss the research and ways CGA by NIQ helps businesses drive loyalty, email client director Andy Dean at andy.dean@nielseniq.com.
