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July 22, 2016
Megan Flynn
Millennials and baby boomers, the two largest consumer segments, represent an estimated $783 billion in restaurant sales. They share a common love of cuisine and great service. But they want different things from restaurants.
Millennials prefer trendy cuisines. They are drawn to the latest tableside and social-media technologies for communicating with restaurants and receiving marketing messages. In contrast, boomers are more likely to embrace familiar foods and more familiar technologies such as email, according to the 2016 Restaurant Industry Forecast from the National Restaurant Association. The same report finds millennials are anywhere from two to three times more likely than boomers to have used a restaurant electronic ordering tablet or a tableside payment terminal.
The two groups diverge in their approach to restaurant loyalty as well. In one study from restaurant POS technology reviews and research firm Software Advice, 40 percent of millennials say they prefer apps over loyalty cards to interact with restaurant loyalty programs. And they're more likely than boomers to favor loyalty programs that offer a social or competitive component.
Millennials are also twice as likely as their older counterparts to join a rewards program based on recommendations from family or friends, according to Excentus-Ipsos survey data, even though both groups—40 percent of millennials and 49 percent of boomers—are motivated to join loyalty groups primarily to save money.
How can restaurants cater to both groups, when their behaviors and preferences don't always align?
A few key strategies focused on overall satisfaction and targeted loyalty can bridge the gaps across this broad and valuable customer base, lessening the impact of generational differences.
1. Don’t just cover the basics—take them to a new level
Everyone, regardless of age, appreciates great food, great service and a sense that every restaurant employee—front or back of house—is dedicated to a singularly satisfying dining experience. Delivering on these fundamentals will attract new diners, keep existing diners satisfied and support long-term engagement and advocacy from both groups. According to the NRA, great food that they can't make at home easily is appealing to both groups (67 percent of millennials, 51 percent of boomers).
2. Look to the future and make it mobile
Forty percent of millennials are embracing technology and mobile features for their dining decisions, according to the NRA, while only 26 percent of boomers are doing the same. Make it easy for smartphone-savvy (or less-than-savvy) diners to find information about the establishment, place orders, pay checks and manage their rewards. Mobile capabilities and tools—including a robust and easy-to-use mobile app—are a plus.
Why? 35 percent of customers of all ages are more willing to use restaurant technology than they were two years ago. And while it's not as crucial for boomers, 42 percent of millennials say the ability to pay with a smartphone keeps them in a loyalty program. Mobile technologies continue to infiltrate the marketplace, so implementing a mobile-centric restaurant strategy is critical for satisfying cross-generational customer segments: early adopters, tech-reliant diners and those who are slowly finding their way.
3. Give loyalty a social component
Millennials have already migrated to social-sharing and social communication platforms for obtaining information, personalized marketing, recommendations and communicating with businesses, according to the 2016 Internet Trends Report by analyst Mary Meeker of KPCB. The online review site Yelp, for example, has twice as many millennial users (42 percent) as boomers (21 percent), and millennials (30 percent) are currently Facebook's largest audience. Millennials rely on Instagram, Snapchat, Twitter, Vine and Pinterest, among others, to share information about their favorite foods and dining experiences.
Restaurants can cater to this behavior by building social sharing, social communications and refer-a-friend capabilities into loyalty programs and marketing initiatives. These features can validate the younger generation's inclination to connect without influencing the existing loyalty and behaviors of boomers. Not every customer has to participate, but giving everyone the option supports the desire to connect with the added bonus of cross-channel brand advocacy.
4. Reward millennials for frequency
Millennials dine out on average 13 times a month, compared to 5 times for boomers, according to a May 2016 survey. And if they belong to loyalty programs, millennials are almost twice as likely as boomers to earn, check or redeem their rewards daily, according to Excentus-Ipsos data. Support their frequent interactions and activities by giving them incentives to remain engaged with your loyalty program. That might take the form of mobile push notifications and alerts to congratulate them for earning new rewards, update them on rewards that await redemption or entice them with new and upcoming offers.
Bottom line? Key loyalty strategies that incorporate the pillars of restaurant fundamentals—great food, memorable service, mobile capabilities that meet diners’ needs and the social aspects of brand advocacy—position restaurants for much greater engagement and loyalty that transcend generational differences.
Megan Flynn is executive v.p. of program development, brand & communication at Excentus, which owns and operates the Dallas-based Fuel Rewards program.
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