In the past, the hospitality high street’s attitude towards loyalty has been to take it for granted – even bakeries, which generally tend to take a more personalised approach towards customer service as their revenues are much more focused on local than tourists. However, consumer behaviours and preferences have changed drastically, and so, too, must hospitality businesses evolve with them to stay on top.
“Many operators believed that if you set up a business that operates well and provides consistent, high-quality products, then you will win your customers’ loyalty almost as a matter of course, without any extra effort. Loyalty wasn’t measured or prioritised, it was just assumed,” Frederick Szydlowski, cofounder and CMO of Embargo, told BakeryandSnacks.
Embargo, launched in 2017, is a platform that helps the hospitality sector embrace digital transformation by connecting them directly with the customer through bespoke loyalty rewards.
“This no longer applies to the modern consumer.
“The rise of ecommerce has changed their expectations when it comes to customer experience, where online platforms are able to remember their information and preferences, providing personalisation communication and rewards that make them feel more valued.
“If online brands can make them feel important and recognised in this way, why then can’t the high street?”
Szydlowski noted that in the past, high street bakeries relied on physical loyalty cards and front of house staff recognising regulars to enhance the consumer experience. But the pandemic has caused massive staff turnovers and shifted purchasing habits to contactless, and these methods have been rendered largely obsolete. He added that even if they still worked, they don’t really generate useful data about their clientele, to recognise when regulars stopped coming or to try and lure them back.
“There is no way to actively manage their regular customer base, who are generating the majority of revenues and are the single most important component to a successful business – they have no idea how many regulars they have and how many have been lost, and they have no tools to communicate with them,” said Szydlowski.
A smarter strategy
To bring customer experience on par with that of ecommerce, bakeries must embrace smarter loyalty strategies that will fit into their existing models and make them more appealing.
“It is a classic pitfall of an existing business that is trying to increase footfall to target new customers through advertisements and promotions, instead of trying to increase their engagement with existing customers who already know the brand and are likely to return.
“Repeat business is more sustainable for any business, and studies have shown that it is five times cheaper to retain existing customers than to attract new ones, making loyalty-first strategies a more cost-effective solution.”
A cure for changing times
Szydlowski said the easiest and most cost-effective solution is to implement a Customer Relationship Management (CRM) platform or digital loyalty card that will provide customer personalisation.
“This improves customer experience by providing them with tailored rewards that reflect their preferences, while also generating invaluable data to the business about what their customers want, how they engage with the business and – most importantly – when to lure them back when they stop coming as regularly.”
“Adopting a smart strategy like this doesn’t have to be a great undertaking for a small bakery,” said Szydlowski, noting that plug-and-play solutions exist that can turn an existing business into a data-driven, customer service powerhouse overnight with often no setup fees and affordable subscriptions.
“It is vital that the customer-facing product is extremely simple to use and does not detract from the day-to-day shopping experience.
“Nobody wants to see the hospitality industry struggle more than it already has – but these businesses need to be ready to evolve and adapt to shifting expectations. Putting loyalty first is a great way for them to show their customers that they care about them and their experience, and ultimately everyone stands to benefit from these businesses engaging more with their customers.”