Restaurant Success Tips

Millennial foodies are the tastemakers when it comes to emerging dining trends. With strong ties to technology and new ways of engaging with food and beverages, this generation’s shopping and dining habits are worth watching not just for insight into what this generation of young adults (18-38) want, but also the ways they are influencing and changing dining culture as a whole. Lavu spoke with Justin Guinn, restaurant market researcher at Software Advice, an iPad POS analysis and reviews company, on cutting edge ways to market to this generation with your POS.

The benefit of a restaurant engaging with millennials on Twitter or Facebook seems obvious, but why should restaurants focus on courting them with loyalty programs?

Restaurants need to be focusing on millennials (16-35 years old) for multiple reasons. First, they’re now outnumbering Baby Boomers (51-69 years old) as the largest age demographic in the US. Secondly, although there have been murmurs that millennials aren’t brand loyal, this couldn’t be further from the truth. Our report shows that 96% of millennials have or are currently participating in a restaurant loyalty program.

Not only are millennials active participants in loyalty programs, but they’re also eating out more than any other age demographic. A report found that 49% of millennials are eating out at least once a week, while 36% of millennials order takeout/delivery at least once a week. Restaurants should be employing tactics —in this case, loyalty programs— that are designed to capture a reliable, consistent share of this millennial dining pie.

Based on your findings, would you say that millennials are only looking for ‘the best deal’ when eating out?

Millennials are certainly concerned with the reward aspect of any restaurant loyalty programs they join, but that’s not all they place value on. Millennials tend to look for more meaningful relationships when courting any sort of business. They want to see a business stand up and care for the same causes as them. Being in tune with and acting accordingly to millennial preferences is a great way for a restaurant to sustain long-term engagement without giving away a lot of their bottom-line through only offering deals or discounts.

What did you discover to be the main reasons this demographic decides to drop out of a restaurant loyalty program?

Our research discovered various reasons why millennials drop out of loyalty programs. The top reason millennials have quit a previous loyalty program is that they didn’t find rewards to be valuable enough (cited by a majority, 59%). Another 57% said rewarded discounts weren’t high enough. The underlying message here isn’t for restaurants to start offering huge rewards that shrink the bottom-line. Instead, restaurants need to determine (either through surveys or other means) what the threshold is for meaningful rewards; what is it that’s ‘valuable’ to the millennials in their area eating at their establishment?

Another finding in regards to millennial attrition is that 50% end their loyalty program enrollment because the time to achieve rewards was too long. This is another takeaway for restaurants; reward loyalty members early on and often throughout their lifecycle with your business.

Restaurant operators might be hesitant about starting a loyalty program because it seems like a lot of details to keep track of. Would you say it’s a difficult process?

Starting a loyalty program can definitely appear to be a complicated process, especially for the 63% of restaurants who don’t have a POS system in place. A POS system can be a firm, reliable backbone for managing restaurant loyalty programs. It’s a point through which loyalty members can be enrolled, tracked, and rewarded. Essentially, it can be indispensable to any successful loyalty program. And with the onset of affordable iPad POS, these easy-to-use options are creating a little excuse for restaurants not to have a POS system in place.

Lavu Pro Tip: Using an integrated POS system helps keep track of rewards, analytics, and daily management duties.

You uncovered a fairly surprising statistic about how millennials want to track and redeem their loyalty rewards…. What did you find?

Well, to start, somewhat unsurprisingly, our study found that mobile devices have become the most preferred means for millennials to track and redeem their loyalty points, with 40% indicating such. However, while mobility is sleek and convenient, 38% of millennials still said a simple physical loyalty card is their preferred means to earn and use points. So while loyalty mobility should be a point for restaurants to consider as a priority, it’s not currently as polarized as it probably will be just two years from now.

From a tech perspective, what are some ways that an iPad POS system might help turn a random customer —millennial or otherwise— into a loyal patron?

Aside from the actual customer management and loyalty program-specific features, iPad POS systems offer an enhanced customer experience. Many restaurants are using their iPad POS systems to take orders and process payments at the table.

Using their mobile POS this way enables servers to have full command of the menu, since it’s right in front of them on the iPad screen. It reduces server error because they type in the order as the table tells them, rather than writing down or memorizing the order and entering it at a POS terminal afterward.

Lavu Pro Tip: Have your mobile POS system send digital tickets directly to the kitchen to reduce paper waste, and increase order time efficiency.

These mobile systems can even be programmed to prompt servers to upsell certain sides or add-ons when they type in certain orders. For example, a customer orders a hamburger that comes with fries and the server types that in. The server may then be prompted to ask the customer if they want to upgrade to ‘waffle-cut sweet potato fries’ as an alternative for only $1.25 more. So, not only are these iPad POS systems offering an improved customer experience by streamlining the dining experience, but they’re also directly contributing to, and in many cases, helping improve the bottom-line.