Do you need a loyalty program for your Canadian restaurant? How to decide and set one up

Loyalty programs are everywhere in Canadian retail, and many restaurant owners wonder whether they need one. The answer depends on how often your guests could realistically visit, how you earn your margin and how much effort you can give it. This guide helps you decide, and shows what to watch for if you start one.

What is a loyalty program really for?

It has one job: to turn a guest who might return into a guest who does. It does not make people like your food. It rewards the habit they already have, and it gives you a reason to remind them that you exist. In a year when Restaurants Canada reports that most Canadians are eating out less, a reason to come back to you rather than to the next door is worth thinking about.

When does a program make sense?

It tends to work best when:

• Visits are frequent. Cafés, bakeries, lunch counters and casual restaurants see the same people weekly.
• The average spend is modest, so a small reward feels meaningful.
• You have a simple offer to give, such as a free coffee or a free dessert.
• You can record visits easily, without slowing the line.

It works less well for a fine-dining room that guests visit twice a year. For that kind of business, a birthday invitation or a seasonal note may be better than points.

What are the main types?

1. Stamp card. Buy nine, get the tenth free. Simple, cheap and easy to understand.
2. Points. Guests earn points based on spend and redeem them. More flexible but more complex to run.
3. Tiers. Guests move up levels with more visits. Works for larger businesses with a wide range of rewards.
4. Membership. Guests pay a regular fee for perks. This needs careful costing.
5. Surprise and delight. No formal program, but staff recognize regulars with a free side or a seat at the bar.

For most independents, a stamp card or a simple points scheme is plenty.

How do you work out whether a reward pays?

Cost the reward at what it costs you to make, not at the menu price. Then ask how many extra visits the program must bring to cover it. If a free coffee costs you little, and a regular visits twice as often because of it, the sums are easy. If the reward is a main course, be careful. Limit the reward to a dish with a healthy margin, and set an expiry date.

What are the Canadian privacy and anti-spam points?

If your program records names, phone numbers or email addresses, you are collecting personal information. Under federal privacy law, you must explain why you collect it, obtain consent, protect it and report serious breaches. The Office of the Privacy Commissioner says that small businesses are subject to the breach reporting and record-keeping requirements. If you send commercial messages by email or text, Canada's anti-spam law requires consent and an easy way to unsubscribe. Quebec and some provinces have their own laws, so check yours.

Collect only what you need. A phone number or an email is enough. Do not ask for a birth year unless you need it.

How do you launch it without a fuss?

1. Choose one reward. Keep it simple.
2. Train staff to ask. "Would you like a stamp?" at every table or order.
3. Make signing up quick. A few seconds at the till.
4. Tell regulars. A sign, a note on the receipt and a mention on your page.
5. Review at 90 days. Count how many guests joined and how many returned.

What mistakes should you avoid?

• Making the reward too hard to reach.
• Making it so generous that it loses money.
• Collecting data you never use.
• Forgetting to honour the reward when staff change.
• Sending too many messages.

Are you hoping your regulars will come back more often?

A good program is one that your guests understand in five seconds. Mosey is a food discovery app where diners rate the dishes they ate and build lists of favourites, and its tools for businesses include loyalty rewards. Nobody can pay to outrank you there, because Mosey Gold is earned from ratings alone.

More guides for your business:

• How to fill quiet restaurant nights in January and February in Canada
• How to get more customers for a Charlottetown restaurant beyond the summer rush
• How to get more customers for a Saint John or Fredericton restaurant using the city markets

More in the Canadian guides for food businesses.