Overview
This document aids with the transition of an existing client to a Bank Loyalty program, as well as the transition of new clients importing their customer data into a Lunchbox Bank Loyalty program.
What is Bank Loyalty?
Bank Loyalty is a loyalty system that allows customers to spend loyalty points they have earned when ordering from the restaurant. It can be compared to popular businesses where a user would play arcade games, and when they earn enough tickets, they will bring them to the redemption store to claim rewards based on the number of points they have available.
An example of a popular Bank Loyalty system is Starbucks’ loyalty program:
Create an account with Starbucks
Order a beverage and pay through the desired method
Stars are collected with each purchase
Use the banked stars to earn rewards
What are the features & benefits of Bank Loyalty?
When a registered customer makes purchases, they will accumulate points for those purchases at a rate that is pre-defined by the Restaurant Partner (e.g., 1 point per dollar).
The points balance is maintained independently in the bank system and can be reviewed by the customer in the Rewards section of the Website or the App.
When the customer visits the Rewards page after accumulating points, they will conveniently see the full list of rewards that are available to be claimed and the points required for each. The points balance is updated after the order has been processed
Rewards that cost more points than the patron's balance will show as disabled.
When a reward is claimed, the required number of points will be deducted from the patron's points balance, and the reward is added to the patron's wallet for use during check-out.
Onboarding Guide
New Client Launching Bank Loyalty
As a new client that is launching Bank Loyalty, they will define their Bank Loyalty Matrix and define the Tiers that help determine the rewards. The Bank Loyalty Rollout Template is used to aid with the rollout of the program. Here's an example of how it usually works.
Defining the Bank Loyalty Matrix
Three parts of Bank Loyalty are critical to an effective and successful launch and they are as follows:
Identification of Menu Items that will be included for redeeming rewards
Determination of how the guest spends will be converted into loyalty points ( points to $$ ratio)
Decision on how many loyalty points a guest needs to have to claim a reward associated with the Menu Items.
Step 1: Identify the bank reward items
Identify which menu items to include in Bank Loyalty for guests to redeem rewards.
Run an analysis on the menu item costs, the margins, the order popularity, and overall profitability.
Determine which items are the most enticing to the guest, or which items have the potential to be promoted or featured more prominently?
These metrics will provide a clear view of the most profitable menu items that the business has to offer. They will also reveal items that could benefit from promotion or items that the guest finds enticing.
The following are examples of menu items that could be offered as a promotional item (for a generic burger restaurant):
Free Tots
Free Side of French Fries
Free Milkshake
Free Burger
Step 2: Define the points-to-dollars ratio
Next, the restaurant partner will determine how the customer’s spending will be converted into points for the loyalty program. It is recommended to utilize an easy-to-understand dollar-to-points conversion practice. A few simple examples are:
$1.00 = 1 point
$1.00 = 2 points
$1.00 = 10 points
The conversion rate chosen, along with how points are given out, determines how rewards can be redeemed. This lets us calculate the exact number of points required for each reward available in the Bank loyalty program.
In case a restaurant partner already has a loyalty system in place with Lunchbox, the existing conversions can be used (e.g. $1.00 = 1 point), but in case the restaurant partner wants to change the conversion logic, they should contact Customer Support Specialist
Step 3: Define bank rewards values
Finally, there needs to be a decision on how many loyalty points a guest needs to have to claim a reward associated with the Menu Item. The Lunchbox Team will be available to assist with this process as needed; communicate with the Onboarding Manager or Customer Support Specialist for any help required.
The following is an example of how this process could occur:
Suppose that in Step 2, it is determined that there is a 1:1 conversion (i.e., $1.00 = 1 point).
Using the generic burger restaurant example from Step 1, the conversion factor could be used in the following way:
Free Tots = 50 points
Free Side of French Fries = 75 points
Free Milkshake = 200 points
Free Burger = 500 points
Step 4: Set loyalty tiers
The establishment of the rewards tiers is critical in defining the new lifetime points thresholds that guests will have to achieve to unlock rewards.
Why do we want to have these tiers? Having tiers will incentivize the guests who are dedicated customers, power users, and deserve to be rewarded for their loyalty to the brand.
What are the benefits of having tiers? The benefits of having tiered rewards can be utilized to empower the customers to maintain their loyalty status and incentivize them to increase their purchases for the opportunity to claim additional rewards. The means of achieving this are defined based on the company’s price points, which can all depend on the business, revenue, etc. Being aware of these critical metrics for your business helps to determine your specific tiers and how they are presented.
Tiers are defined by the lifetime revenue generated per customer.
Example of Tiers:
Gold Tier: $1.00 up to $499.99 = 1 point ($1 = 1 point)
Platinum Tier: $500.00 up to $999.99 = 1.5 points ($1 = 1.5 points)
Diamond Tier: $1,000.00 and beyond = 2 points ($1 = 2 points)
Guest Communication (Email)
Use customer.io to facilitate email communications to inform customers about important events that happen leading up to the launch of the program.
This action is not mandatory, but Lunchbox recommends having a communication and launch plan. The Lunchbox Team is available to assist with any specialized communications to help maximize your potential with the loyalty program you develop and implement. Here's an example:
Three (3) weeks before launch (i.e., the loyalty program announcement), the following occurs via email communication:
Mention the Spend As You Go value offering.
Mention Points Conversion.
Mention Launch Date.
One (1) week before launch, the following occurs via email communication:
Showcase the upcoming UI updates.
Show how to use the program.
On the day of launch, the following occurs via email communication:
Mention the Spend As You Go value offering.
Show how to use the program.
Restaurant Communication
It is important to maintain clear communication with the Restaurant team and provide information that is needed to implement the program. A One-Pager will be distributed to help your team understand the end-to-end process, how to execute your needs, and resolve any issues that you have.
Existing Client Launching Bank Loyalty
As an existing client that is launching Bank Loyalty, you will define your Bank Loyalty Matrix, define the Tiers that help determine the rewards, and migrate all existing loyalty to the new system. We will have to follow the same steps described in the section above Defining Bank Loyalty Matrix.
Loyalty Migration
The Lunchbox Team is available to assist with your migration needs; simply contact the Lunchbox Team for assistance with any questions or concerns.
For existing clients, Credit-based Loyalty or Tier-based Loyalty could have a different points-to-dollars ratio than those for Bank Loyalty. Due to this, there may be a need to define how the points work from scratch; the alternative is to create a conversion to transform the points from Credit or Tier Loyalty to Bank Loyalty.
Define your Points Multiplier:
To achieve this, determine how much money needs to be spent to earn points. (This was the same process as defined in Step 2: Define the points-to-dollars ratio )
Transform Credit-Based Loyalty into Bank-Based Loyalty:
The Lunchbox Team will run script(s) that allow them to implement the conversions that are requested and required for your needs.
Once Lunchbox’s Restaurant Partners finalize the following conversions, our Lunchbox Team can perform the following conversions:
Loyalty Progress <converts to> Bank Loyalty Points
Loyalty Credits <converts to> Bank Loyalty Points
As for the new clients, it's not mandatory, but it is recommended to have planned communication that will go out to the customers (external) and restaurant team members (internal). Both examples are described above in the sections Guest Communication (Email) and Restaurant Communication.