How independent restaurants can adopt loyalty programs

Early in January, the fast-casual sandwich shop Hannah’s Bretzel in Chicago launched its own “Sandwich Club” as a way to give perks to its loyal customers. But it's not like the usual punch card or points service, which Florian Pfahler, owner of the three-unit concept, said doesn't stand out in the sea of promotional deals. Instead, he aimed to create a free service that acts as a gift to his customers, surprising them here and there with giveaways, chances to meet chefs and invitations to try a sandwich before it hits the menu.

"If I am hungry in the Chicago market, there are a lot of options, and whether they have a loyalty program or not, that fact isn't driving me to one place or another," said Pfahler, who sells his artisan sandwiches for around $8.50 to $11.50. "I want customers to come to us because they appreciate our strong environmental, ingredient and nutritional focuses, and then provide the unexpected experience."

To create the loyalty program at Hannah's Bretzel, Pfahler, who has a background in advertising, looked at numerous options. Those included collecting points, paying to get into different reward tiers, and spending enough money to garner a free item. None of them seemed right.

"The idea of these programs is misguided,” he said. “It doesn't make sense to say, 'If you are loyal to me then after 10 times I give back to you.’"

Pfahler said that for him, personally, he’s loyal to a brand because he likes the brand, not because of a promise of a small reward.

"I believe in the emotional connection more than the rational connection," he said.

Pfahler likens the Sandwich Club to an experience he had when living in New York City and frequented a French restaurant. That place had no loyalty program per se, but one night the owner presented Pfahler with a bottle of wine on the house.

"It was meaningful because it's not expected," he said over the phone. "It's about providing the unexpected experience, and that's what we want to do with the Sandwich Club."

Pfahler and his team might surprise Sandwich Club members with free sandwiches, a sneak peek at new items, or off-the-cuff discounts.

Also in Chicago but on the higher end of dining, the Michelin-starred restaurant Esmé started a unique loyalty program too, the Elite Dining Pass. The pass costs $650 per person per year, which gives them exclusive dining experiences, preferential booking and more access to the culinary and management team at the restaurant. It also includes "tickets," which diners can use for a tasting-menu dinner any time they want.

Esmé currently has around 80 Elite Dining Pass holders.

The crux of the program comes from chef Jenner Tomaska's years working with the Alinea Group, said Katrina Bravo, Tomaska's wife and business partner. That group offered tickets to go with each seasonal menu change. Esmé based its loyalty system after that, but with a twist. Unlike a traditional restaurant, Tomaska bases menu changes not only on seasonal availability, but also on the temporary art show being hung on the restaurant’s walls.

"We did add a little something different: A meet-and-greet every time the menu changed so customers could also learn about the artists and get passed apps," said Bravo. She said around 80 people attend each event.

"Even doing season tickets means you have to produce [the same timing of dinners] each year, but we might have some artists stay longer, so we figured out how to do it and not pigeonhole ourselves."

The changing energy of Esmé based on the changing art exhibits as well as the evolving menu also means diners don't get stuck on the same menu. Instead they get to interact with the staff in a different way with each new menu. Many of the season pass holders would come in multiple times already, Bravo said, but by having the loyalty program the team is able to make sure those people get perks, too. Apart from special tastings, Esmé also hosts free cooking classes with the chef in the restaurant's kitchen. Members also can lock in wine and menu prices by purchasing early, avoiding the fluctuation in ingredient costs.

While the price and perks remain set, Bravo said it's possible to transfer your reservations to a friend. There's nothing locking members into always going with the same people, either. Business folk can keep their Esmé membership on-hand for hosting work dinners. Friends can make it a surefire way to meet up a couple of times each year. It's a great option for keeping date night fresh, too.

While all these are reasons for people to join the loyalty program, utilizing a club also benefits the restaurant. Because of the $650 price tag to join, it guarantees a set amount of income, no matter how busy the restaurant is.

"These individuals pay our light bill, they put the food on my and my team’s table, and this is something I appreciate," said Bravo. "The reason we are able to be around is because of their support."

Whether serving at a fine-dining establishment or fast-casual eatery, both owners agreed that making customers feel cherished so they keep coming back is the crux of their loyalty programs. And, in an age where everything has gone digital, it sure beats a paper punch card.