Despite the cost-of-living crisis, eating and drinking out is as important to Britons as ever. Our latest GO Technology research report in partnership with CGA by NIQ and UK Hospitality, revealed that 65% of consumers say eating and drinking out remains a priority for their social life.

In a cash-strapped market, however, brand loyalty is precarious and operators can’t afford to rest on their laurels. Our research highlights that the key to building a loyal customer base is consistent delivery of the fundamentals of hospitality – like high-quality, good-value food and drink, excellent customer service and an overall seamless experience. Read on to find out how tech can help…

Firstly, why do customers spend time in hospitality?

The most popular reason that people choose to go out in hospitality is to socialise with friends and family (50%), followed by celebrating a special occasion (44%). We also know that people view eating and drinking out as a treat – with 41% of people saying they visit hospitality for this reason.

Operators that make life easy for customers to create these moments, such as adopting online booking systems or allowing customers to make tailored requests based on the occasion, will increase the likelihood of customers returning.

What role does hospitality play within communities?

Our research also underlines just how much consumers value hospitality businesses, with two in three (64%) consumers saying the hospitality sector plays an important role in their local community. Despite the pressures that the cost-of-living crisis has presented, 60% say they still want to support local businesses within their communities.

Operators can tap into this affection for local businesses by organising events or raising money for the community. This can help venues to demonstrate their value beyond just being a place to go for food or drink. From pub quiz nights to donating a percentage of sales to a local charity can help build a stronger and more loyal network and customer base, as well as build a positive reputation for the business in the area.

How can businesses build loyalty?

Loyalty is the foundation of growth and success in hospitality. It generates the repeat visits that venues need to survive and thrive, and the brand advocacy needed to engage new guests. And our research shows that consistently delivering on the fundamentals of hospitality is key to generating this. Top of the priority list for guests are:

• Quality of food (53%)
• Good customer service (50%)
• Value for money (48%)

However, it’s not enough to occasionally deliver on these basic elements of hospitality – delivering them on a consistent basis is crucial. This is even more important at a time when spending is tight, as people want to be confident they will get what they pay for.

Having friendly and knowledgeable staff is a significant factor in terms of loyalty for a third of consumers (30%), our insight showed. We know that people make hospitality great, so ensuring staff are delivering on customer expectation and great service goes a long way.

Achieving all this is no easy feat, however. Having processes and technology in place can play a helping hand. Operators that consider investing in solutions which help increase efficiencies and alleviate staff pressures, will set themselves up to succeed in delivering the exceptional service customers expect, encouraging them to return time and time again.

How can technology help?

Technology should never interfere or take away from the overall experience but, if used correctly, it can work behind the scenes and do the heavy lifting. This provides operators and staff with the time and headspace to focus on delivering great service to customers.

For example, having your EPoS linked to your stock and management systems means getting real-time updates on stock availability, which removes the risk of customers making orders, only to find out a few minutes later that the item is out of stock – one of the things we know customers find particularly irksome. Additionally, linking mobile ordering and payment devices to the main tills removes the need for staff to re-key any orders which saves time and minimises errors. This means customers spend less time waiting to be served, or in queues at the bar.

Using technology can also provide operators with a wealth of insight about customer spending behaviours and habits. Having this data, and in real-time, means that operators can get a detailed overview of how well the business is performing, even down to individual menu items. Having this information to hand is really useful when it comes to helping to drive repeat visits. With this data, operators can use the insight gathered to create bespoke deals, promotions, offers and incentives based on customer preferences. This will encourage people to re-visit and reward them for their custom, helping build their loyalty.

Download the full GO Technology: The value of hospitality report here!

Loyalty is currently a hot topic in the hospitality industry but there remains a lot of confusion. What do consumers mean when they say they are loyal to on-trade brands? Is it the same as for other retail brands? How can the sector create and maintain customer loyalty? Does it genuinely add value to the bottom line – or does it really just boil down to discounting?

To answer these – and more – questions, we gathered eight of the industry’s top operators for a chat about all things loyalty. The foundations of the discussion were key takeaways from Zonal’s recent GO Technology: The New Loyalty Landscape report, including:

• Consumers are loyal to 2.1 hospitality brands on average
• The top reason that would make consumers loyal to a brand is if they feel it is value for money (47%)
• Other top reasons are that it serves their favourite food and drink (30%); that the service is top quality (28%), and that their family and friends go there (28%)
• When consumers talk about value for money, they don’t necessarily mean cheap. For 41% of consumers it means ‘worth its cost’
• Three-quarters of consumers said that their loyalty was unchanged since the cost-of-living crisis began in 2021
• More than half (52%) of consumers agree they have higher expectations of the brands they are loyal to now compared to before the cost-of-living crisis
• Younger consumers are more likely to join loyalty schemes to save money since the cost-of-living crisis began than other age groups, with two thirds (65%) of those aged 25 to 34 saying they have done so, compared with 47% of consumers across the board

The research was used as the basis for a wider discussion around the topic, which began with a debate around the positives and perils of discounting.

Discounting discounts

Certainly, pre-Covid there was a lot of discounting in the market, particularly via schemes such as Groupon but by and large these were not used strategically, and attendees questioned if they actually built loyalty or delivered any value. One operator admitted since removing discounts entirely as part of their marketing strategy, the brand’s NPS score had risen “significantly” and the number of no-shows had dropped.

Not all operators thought discounts should disappear, though.

“Not all discounts are a bad thing. If you have evenings when your venue isn’t full and you offer a discount that gets loyal customers through the door and feeling special then, as a mechanic that delivers on business requirements, that works.”

Mark Derry, Chairman, The Heartwood Collection

Focus on quality, not quantity

For those operators utilising their customer data to drive loyalty, the opportunity is around focussing rewards on those who are already engaged and enthusiastic about your brand. Creating offers that target this group is the most effective way to create advocates for your business and driving footfall.

“Our recommendation is to ‘work’ your CRM, targeting a smaller number of contacts who are more likely to respond, rather than the ‘spray and pray’ approach. For example, 500 of your loyal customers, not the entire 5,000-strong database. It then becomes more of a reward rather than an offer, which perhaps poses the danger of more widely cheapening your brand.”

Dan Brookman, CEO, Airship and Toggle

Cash-loaded loyalty

Some operators in the room advocated for different styles of loyalty schemes, a step beyond being part of a database that offers rewards (and perhaps discounts) to those that sign up. Some advocated giving teams on the floor the budget and permission to reward customers as they saw fit – aping Pret A Manger’s “random acts of kindness” scheme of old, where each store had a budget which they could use to reward customers with a free coffee or a treat.

Others looked to create more of a “members club” look and feel to loyalty schemes.

“Our loyalty scheme is a little different, in that we offer a card that can be pre-loaded with cash, acting a bit like a membership scheme I guess, which can be used across all our pubs. It’s not run on a points-based system like a Nectar card but more about rewards such as ‘buy 5 coffees, get the 6^th free’. This works well for us, not least because it means we have the cash up front – some of which does not get redeemed. People don’t talk about that but it is a benefit for us.”

James Nye, Managing Director, Anglian Country Inns

Personalisation is a must

Another hot topic was personalising offers by using data. For example, for groups of customers that always order a burger when they eat with you, sending bespoke offers created around this that tempt them in on quieter days of the week or if they haven’t been in for a while.

“When it comes to communicating with loyal customers it has to be bespoke. If you are emailing them to highlight a promotion then it has to be personalised – an offer on their favourite wine or send out a prompt to your biggest Guinness drinkers highlighting a new Guinness-related dish in the menu, for example.”

Anthony Pender, Founder, Yummy Collection

It’s always been about consistency

As our research clearly pointed out, customer experiences are absolutely key when it comes to building a base of loyal customers – 49% said one or more bad experiences while visiting a hospitality brand would case them to reduce their loyalty. This puts pressure on operators and their teams to deliver excellent customer experiences every single time – but hasn’t it always been this way?

“What is the definition of loyalty when it comes to hospitality brands – is it as simple as people who would recommend you to others? This idea highlighted by the report, of it being around consistency of good service is also key, and that is something that’s always been true.”

Ann Elliott, portfolio NED and Board Advisor

For more on loyalty and digital loyalty schemes, check out the resources section of our website, including this piece on All You Need to Know About Digital Loyalty Schemes.