Light users and the long-tail of your customer base

So much of a restaurant brands marketing energy is dedicated on the heaviest users. Obviously, focusing on the smaller percentage of customers that drives the majority of sales makes sense in a mass media environment.

Good news, bad news. The mass media environment no longer applies to most brands. Enter the long-tail. By the end of the dot com era it was clear that anyone with an interest in an obscure subject could find the content to satisfy them. Apple’s iTunes store offered people the chance to find and explore tons of music they would have never heard about on FM radio. And dozens of publications like Pitchfork sprung up to feed interest in lesser known artists.

Top 40 pop radio still reaches the broad majority of music listeners. The obscure tracks occupy the long-tail following that the majority. Starting in the early 2000’s, marketers developed long-tail strategies aimed at capturing attention from those interested in long-tail subjects.

For example, a customer who always orders veggie items should be offered pork sliders.

When mass media budgets aren’t viable for a restaurant brand, the long-tail strategy can be flipped to apply to light users of the brand. A typical long-tail strategy aims to align the brand to content that reaches fewer people who are more engaged and passionate about what they’re reading. Digital media targeting makes this simple to execute.

For restaurant brands, the light users are the long-tail. The lower their visit frequency, the further out on the tail they are. By NPD estimates, light users make up just under half of all restaurant occasions. Media targeting still applies, but restaurant brands can target them more directly. Anime, non-GMO farming, Lars Von Trier films. These are examples of interest groups that might appear in a long-tail brief. Media would be targeted towards digital publications and content focused on these topics. In the case of restaurant brands, the interest groups are around specific menu items, LTOs or price points that interest them. Brands have the data to know what items individuals love, and not just the most frequent customers.

Loyalty programs and apps are geared towards the reward for many visits or purchases. But to attract light users, create incentives that are smaller but more specific to the individual. Instead of starting the program with a known reward, create a reward based on the initial purchase. A customer orders an Italian sub, offer them a discount on their next Italian sub.

Beyond that example, brands should respect customers enough to offer something relevant. If exact preferences aren’t known, start broad but custom. For example, a customer who always orders veggie items should be offered pork sliders. A customer that frequently buys kid’s meals might not want an alcohol based offer. Extend the length of redemption based on that customers frequency.

A brand can also offer a win-back reward based on the length of time from registered visit. A reasonable time frame might be 1.5x the average duration between visits of all customers. If your average customer visits twice monthly, offer a light user a discount at three weeks. Offer a richer reward at six weeks.

Simple technology can be used to quickly assess and create custom rewards based on a pre-set group of qualifiers. The user specific (but not personal) data consumers provide can be used to make them happier – and more frequent – customers.

Ten Stamps Later and Your Customers Still Aren’t Loyal

What makes you come back for more? Really think about what makes you loyal for a second, because it’s something you never really question.

For brands relying on frequency like restaurants, the loyalty club has become standard practice. Buy 10, get the 11th free. Some can prove that those clubs drive increased frequency, maybe by .5 visits per month. That kind of increase is certainly valuable. But does it drive true loyalty?

The brands I know with successful loyalty programs are also successful in a bunch of other metrics as well. Funny how that works, isn’t it. Zoe’s Kitchen boasts a great performance from its loyalty club and app. But they do pretty well in store traffic and sales per unit across the board. Maybe it’s because they offer a unique menu mix not found at many other places at a reasonable price and executed well, operationally. They serve the food in a cool environment. Their employees are bright and friendly.

Which of those factors brings people back for that extra .5 of a visit? The free panini in five months or good meals and friendly people while you’re earning it?

Humanity Over Apps

I don’t belong to many loyalty clubs. I don’t like treating meals like a contract with Columbia House. I do use the Starbucks app because it provides more than just loyalty rewards. It offers a fast store finder, ordering tools, and nice payment functionality. The loyalty rewards themselves are on the silly side; access to apps and songs and refills.

A funny thing happened at my local store. I ordered a cup in a hurry, and they had just run out of my roast. The barista recommended a different drink I had never tried, and I accepted because of my helpless caffeine addiction. As she handed it to me, she said “On the house, thanks for trying this.” Super good experience.

Later that week, the Starbucks app crapped out on me and wouldn’t let me pay. I pulled out a credit card and haven’t used the app since. What I learned is that I wasn’t going for the gamification. Or the potential for a free 50th cup of coffee. I was going for the rare spark I get when there is an exchange of humanity.

As slick as I think the app is, (it is one of the best) it deleted part of the brand experience when the customer had to fidget with their phone to pay instead of interacting with the barista. Is that the kind of experience we want customers to be loyal to?

Experience Over Everything

Any store can offer your 11th thing free. It’s easy. Not every store can sell you something you want to have 11 times, in a way that makes you happy to do so. Experience is a huge driver for future visits. Most of that made up of elements that aren’t on the menu or with a UPC.

Are loyalty programs worthless? No. Can they alone drive traffic to a mediocre experience? No. If you are examining a loyalty program, make sure to put the same level of effort into the customer experience you expect customers to be loyal to.