What restaurants can learn from airlines about loyalty
A comped appetizer is not the same as an upgrade to Europe. Or is it?
Expedite’s peeking into the (near) future this month with a series of interviews covering hot topics changing the business of hospitality. This week: a conversation with airline expert Brian Sumers of The Airline Observer about loyalty.
When fast-casual chain Cava introduced ‘status matching’ into its revamped loyalty program last year, it was a clear nod to the airline business. Airlines status match by offering customers elite status based on their standing with a different airline. Cava status matched by letting diners with some sort of status at a host of companies — from Amtrak and American Airlines to Sephora and Starbucks — “match” their way to a higher tier of Cava Rewards, a loyalty program offering points for Cava purchases that can be redeemed for free food.
“Great hospitality creates loyalists, and we’re proud to have so many at Cava already,” Andy Rebhun, the restaurant’s chief experience officer, said in a statement at the time. “With our revamped loyalty program, we’re borrowing the best of travel and hospitality, and introducing it to an untapped industry: fast-casual dining.”
I don’t know that most fast-casual execs would call the industry ‘untapped.’ But I do know that restaurants are always looking to convert occasional diners into regulars. If “borrowing the best of travel” means looking to the airlines with decades of experience honing lucrative loyalty strategies, then what, exactly, might come next for restaurants?
I asked my friend, former colleague, and airline industry expert Brian Sumers, editor of industry newsletter The Airline Observer, to teach me more about airline loyalty. (Our conversation continues below for paid subscribers.) Despite the cross-industry praise, these revered programs aren’t a 1:1 match for restaurant loyalty. But I found plenty of similarities in the way both industries court customers with promised access, exclusive treatment, and good old-fashioned free stuff.
My biggest takeaway: It takes surprisingly little to surprise, delight, and keep people coming back for more. (My second-biggest? A new favorite acronym, OPM. Does the restaurant industry use this, too?)
Our conversation has been lightly edited for length and clarity.
Expedite: We’re talking right now because when restaurants talk about loyalty, they often invoke airlines, and I’m trying to tease out where restaurant loyalty might be headed. Tell me about the metrics airlines use to measure the success of their loyalty programs.
Brian Sumers, The Airline Observer: “There’s only one metric that airlines are going after these days, and that is revenue from the credit card programs. Delta is going to do something like eight billion in revenue from American Express this year. American and United are close, but a little bit behind. It’s all they talk about on their earnings calls. Sometimes they don’t even call them loyalty programs, they call them ‘the card program.’
“Airlines are paid based on how many people apply for their card. So they get a little bonus upfront, and then they take a piece of every swipe of a credit card. The more people use their cards, the more money the airline makes.”
So it’s not even a loyalty play, it’s a financial deal? Does this apply to restaurants? Should I even be conducting this interview?
Ed. note: I didn’t ask those last questions, I thought them. But tech platforms like reservations companies are leaning hard into credit card ties while the independent restaurant industry rails against rising card swipe fees. Names like Visa and Amex are popping up in an increasing number of restaurant conversations. And given the current state of the reservations business, restaurants have to engage with these deep-pocketed players more than they have in the past. Seems relevant to me!
BS: “There’s some belief in the industry that airlines have gotten too obsessed with swipe fees on credit cards and shilling credit cards and that they do need to get back to the old-style loyalty play.”