The key to any successful loyalty program is the same as what brings most restaurateurs to work everyday: delighting guests. So how do we ensure that we deliver on this promise every time our guest interacts with our loyalty program?

The Formula

The epitome of customer delight is delivering something of high perceived value at low or no cost. The ultime goal - leaving the customer thinking "I would have paid more for that."

For a business to thrive, it must deliver this experience while also making a profit. This requires combining high perceived value with low actual cost and, importantly, open inventory. What does this mean?

In this post, we'll use an example to demonstrate, and provide some steps for you to apply this formula for your own business.

1.) Identify Perceived Value (Or Create It)

Perceived value is the value a person assigns to something, regardless of its explicit price. Frustratingly, perceived value can vary wildly from person to person, but there are a few places you can count on everyone agreeing. A few we like to rely on:

1.) Save me time

2.) Relieve my anxiety

3.) Teach me something I can re-use

4.) Provide me comfort

5.) Elevate my profile/status

In the case of a restaurant reservation, we've hit squarely on 1 key to high perceived value - anxiety relief. If reservations are scarce or unavailable, we can add elevated status to the list.

When working with partner restaurants, we commonly focus on categories such as access, education, branded items, and community.

So, step 1: to begin brainstorming your own loyalty rewards, start by making a list of the things you offer to your guests that are likely to have high perceived value.  

2.) Look at your Costs

Evaluating cost is a bit less challenging than value as there is less subjectivity - a dollar is a dollar. The key here is thinking about how cost can change over time. 

To look at familiar example, the cost of a first class seat to an airline months before a flight is very high - it's not a high ROI idea to offer this to a customer as an award. But, as the time of the flight approaches and the likelihood of the seat getting booked decreases, the cost of this offer slowly approaches to zero. The best part: the perceived value stays the same - incredibly high!

In the case of our hypothetical reservation, the cost could be high - but if you can guarantee the guest is more valuable than your typical walk-in, the risk decreases signficantly.

Now, step 2: take your initial list of perceived value items and cross off any items that carry a high cost. 

3.) Utilize (or Create) Excess Inventory

Inventory is a lynchpin to the reward ROI formula that is hardest to control. Without it, there's no delivering the amazing value to the guest. If a flight is fully booked, airlines can't deliver the "upgrade delight" to any customers that flight. 

Of course, there are ingenuous ways to create inventory - whether through good negotiating with a vendor or stashing something away for a special occasion. Sometimes the return of giving something away can be 10x the price you could have gotten for it.

So, step 3: to complete your list, try to estimate the likelihood of "excess inventory" any item may have. The higher the likelihood, and the higher the perceived value, the better the candidate this item is for delighting your guests!

If going through this process with some help sounds fun, let us know. Wisely provides a Program Specialist to all partners at no cost. 

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Wisely empowers restaurant groups to grow and sustain profitability by acquiring valuable new guests, converting them into regulars, and keeping them happy for life. Our software is easy-to-use and enhances productivity, so staff can focus on what really matters. For more information or media inquiries, please contact us at hello@getwisely.com.