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The future of attracting diners
Lettuce Entertain You’s Jennifer Bell on apps, influencers, and the new metrics worth watching
Welcome to the next edition of The Future of Hospitality, a six-part series sponsored by OpenTable that uncovers some of the best ideas, best applications, and best practices for building the F&B businesses of tomorrow.
A lot has changed in the restaurant business since the 1980s. But here’s one thing that hasn’t: restaurant loyalty programs inspired by airline frequent flier programs. The hospitality industry has long taken a page out of the airline handbook, enticing guests to return with their own version of points and upgrades.
This was the inspiration for the first iteration of Chicago-based restaurant group Lettuce Entertain You’s loyalty program. In (or about) 1989, Bob Wattal, a founding partner of the group, launched its Frequent Diner Club. The club was modeled after the frequent flier programs Wattal joined while flying between cities to open new restaurants. That’s according to Lettuce Entertain You executive and partner Jennifer Bell, who, since 1999, has been a part of the company’s public relations and marketing efforts. She served as the head of marketing in 2014 and became the chief marketing officer in 2019, carrying the torch lit by Wattal, her mentor, over 25 years ago.
Lettuce Entertain You runs approximately 68 restaurant brands across 130 locations. It’s the largest privately held restaurant group in America, and it’s been around for 52 years. Its loyalty program is still called the Frequent Diner Club and it remains nearly as enticing as platinum airline status. Since its debut, the Frequent Diner Club has evolved into a case study of the last four decades of loyalty trends — and it’s still changing.
According to data from the National Restaurant Association, 8 in 10 of us will participate in a loyalty program if a restaurant we love offers it.
But realistically, signing up for yet another membership program needs to be easy, and it needs to be worth it.
Years ago, Lettuce Entertain You’s restaurant guests filled out paper cards at the table. Staff manually input their information into a database. It thrived for decades, enticing people to visit restaurants and then return for more. Hopefully, Bell says, getting people to return at least three times within one 12-month period, the so-called “magic number” of visits to establish loyalty. In one iteration, diners paid $25 to join the club, receiving $10 off each of three visits. By the third visit, they earned their money back and then some, plus, bonus! they’re officially loyal — by one metric, at least.
It’s had its challenges, too. When Bell took over the program in 2015, the average age to enroll in the Frequent Diner Club was 47. Despite a spate of new restaurant concepts targeted to appeal to a younger demographic, customers between 25 and 45 weren’t joining. They didn’t want to fill out a brochure, carry a card, they didn’t want to pay for the membership upfront, Bell says.
So the group took what she describes as a huge risk: launching a custom-made mobile app. The app tied loyalty points, restaurant reservations, and gift cards together in one place, a useful tool for even the occasional diner. Within the first year, 300,000 loyalty program members downloaded the app. Their average age? Down 5 years to 42, a “big feat,” per Bell.
Of course, 2015 was a long time ago when you’re measuring in tech years. Here’s the future:
Lettuce Entertain You recently launched an entirely new Frequent Diner Club mobile app, called LettuceEats leaving last decade’s code base behind and embracing customer feedback, fresh data, and one particularly timely addition: Online ordering tied into the company’s loyalty points and gift card systems. It’s still evolving; Bell is targeting first quarter 2024 for the app’s next iteration that will include a newsfeed featuring restaurant events, specials, and more.
Lettuce Entertain You’s storied loyalty program is the crux of my interview with Bell because it’s been a unquestionably powerful tool for the company’s restaurants. But the ideas and principles behind Bell’s marketing decisions apply broadly to any hospitality business trying to engage with guests, both new and repeat.
Our conversation has been lightly edited for length and clarity.
Expedite: You’ve talked about the number of downloads and your mission to make the app experience easy for diners. But what metrics are you using to measure the success of your loyalty programs?
Jennifer Bell, CMO, Lettuce Entertain You Enterprises: “It’s really changed a lot since Covid. I hate to reference that, because we’re so far past it now, but I do believe that the customer changed a little bit. Acknowledging that is important for what we measure in marketing. I don’t look at demographics anymore, things like age, income, all these things that we used to try to figure out about our guests. What I look at is their lifetime value, their engagement, and their advocacy of us. It's more about how they're responding to the content that we're putting out and less about where they live.
“I do look at visits and spend, and how our customers have changed. For example, if you worked at a high rise in Chicago prior to Covid and you ate lunch five times a week at one of our restaurants, that changed in 2020. Maybe you’re ordering carryout from us. And now maybe you're there three days per week instead of five. But now that we’ve launched delivery in the app, I’ve been surprised to see that it’s adding on incrementally. Visits stayed the same, but we see incremental visits through pickup and delivery.”
That’s almost funny because that’s what third-party delivery companies tell restaurants, that the delivery business is incremental. I’ve always been skeptical. But I guess that’s actually true?
“Oh, it's still early, and we work hard for these results. It doesn’t happen magically. It takes real, thoughtful, personalized marketing to achieve that.”
What does personalized marketing look like?
“For example, if we know that you order delivery every other Friday, we're going to contact you with a message with a photo of the place you order from most saying, ‘Hey, we've got dinner covered tonight. Click here to order.’ We're still marketing to our loyalty customers the same way as we do to guests in the restaurants. We haven't changed any of that. We're just adding on this layer of pickup and delivery.”
We’ve talked a lot about loyal customers over the last… 40 years. But how are you reaching new diners?
“New customers are tough. It’s easier to get more visits out of existing guests than it is to acquire new guests. It's more expensive to acquire new guests.
“We look at content, especially storytelling. We've been doing things like Instagram Reels and more social media and videos. We are on TikTok. We work with influencers. I have a digital marketing paid media specialist who is looking at our current customer base and doing acquisition campaigns.
“We also look at a lot of the data that we have. We can see all the people that have made reservations who are not loyalty members, what they spend. There are opportunities to engage them with events and promotions and experiences like wine dinners. At the end of the day, I make sure we’re driving sales, and acquiring new guests is very important. But it's also really important to take care of the customers we have in our existing guests.”
I’m glad you mentioned influencers! Let’s talk about them, because I feel like this has been the biggest change to restaurant marketing even in the last few years. What’s your influencer marketing strategy?
“Our director of social media has worked really hard to understand the value of influencers and putting a program together. At first, if an influencer promoted us, we were like, ‘Oh hey, thanks.’ Now it’s strategic. Influencers are smart, they’re strategic, and they’ve got a great following. That allows us to be creative in ways we haven’t yet. I love the idea of us not telling you why you should come to the restaurants, but an influencer showing you why. That is a much more powerful message and a more powerful way to connect with customers.”
Do you have some sort of formalized agreement? Or a handshake? I think a lot of restaurants struggle with how to work with influencers.
“In the past, it was an email agreement. Now, it’s more formalized and continuing to evolve. This year is the first year we got serious about it. I’m looking at budgets for next year, and how to enhance our efforts, including mutually beneficial influencer agreements.”
Is it possible to judge the return on investment for something like that?
“I’m not convinced I know that yet. I wish I could look at the customer engagement metrics and say, ‘Yeah, this is it.’ It's a tough thing to measure. If that is your goal, to work with an influencer and get X amount of reservations, I'm not sure you can do that.
“When influencers post authentic content about your brand that people will respond to or engage with, it might not be within the platform or the context that they're seeing it. It might be that the next day they make a reservation, or they talk to a friend about it. You have to kind of do a leap of faith.”
It sounds like you have a great relationship with company executives given your tenure, and you probably don’t have to sell them as hard on some of these new ideas —
“Oh I had to sell this, this is not an easy thing.”
Sorry! Not to minimize your efforts here. So what’s your advice for people who have to give their bosses the hard sell?
“Lettuce Entertain You is big, but we operate like mini mom-and-pop restaurants. I don’t have a corporate budget; a restaurant’s budget is its budget. So we have to get scrappy, and we have to be very thoughtful in what we do, we have to sell it.
“It takes 18 months to two years to really start seeing results. We work hard for this; we are strategic, we are thoughtful. I’m big on failing, on trying new things and trying more new things. We had no idea if our new app was going to be successful. But we made educated guesses based on data and behavior. We talked to customers and did surveys and did everything we could to protect that investment. At some point, we had to pull the trigger.
“You have to be willing to invest money to make a little money, whether it's paid media, where you can measure it, whether it's reservations, where you can also measure it, or whether it's an influencer — where you can measure it, but differently. Loyalty is a marathon, it’s not a sprint.”
Thanks to OpenTable for sponsoring this six-part series, which aims to highlight the trends, challenges and opportunities shaping the restaurant industry. Expedite is about embracing and inviting the next big thing and these interviewees have the answers.
Previous editions include: The future of sustainability, with Alpareno Group’s Mo Alkassar and chef Niven Patel