In today’s world, a steadily increasing number of people prefer to dine out rather than to cook on their own. Despite strong demand, the eating industry is highly competitive, so the ability to attract consumers is vital. However, QSRs do not sell merely food; they sell an overall experience to the buyer which aims to increase customer loyalty. Loyalty has become the key strategic goal for many service organizations, including hospitality firms. Restaurant owners and managers are beginning to appreciate that loyal customers are worth a great deal more than just casual customers. As a result, the introduction of loyalty programs has grown from a trickle a few years ago to a steady stream of cards, reward points, and discounts aimed at luring customers to dine more often to the same restaurant.

However, the global scenario is changing fast and looking at the recent development in customer loyalty program throughout the world we can undoubtedly argue that true loyalty cannot be assured by promises of patronage like free items and gift certificates. The loyalty that restaurateurs really seek involves attitudinal, behavioral, and emotional commitment to the restaurant. A smart restaurant is a restaurant that is using state-of-the-art technology from reservation to ordering and storing the customer record. Most restaurants are already collecting customer data through a variety of sources—everything from social programs, online ordering, mobile wallet payments, restaurant- specific app, and even the brick-and-mortar POS system.

The challenge comes when trying to create a single view of the customer, which is vital to converting those insights into decisions, actions, and targeted campaigns. Restaurants with leading loyalty programs are beginning to leverage machine learning algorithms to take historical purchase data and calculate the next best offer, or most likely to purchase products for their pre-existing customers.

To give an example of how technology affects the customer loyalty, the fast-food chain KFC and Chinese internet giant Baidu have opened a smart restaurant in Beijing’s Financial Street using facial recognition to come up with menu suggestions for new buyers and recommendations for returning customers based on items they have previously ordered at one point of time. A smart image recognition device (IRD) at the KFC restaurant studies the face of a customer standing in front of it, understands their facial expression and identifies attribute such as gender, age and mood, and suggests menu items that the customer might enjoy. If they are returning customers, the system remembers what they previously ordered and recommends their past favorites. This program creates a positive personal experience that has a direct positive influence on customer satisfaction and loyalty.

Restaurants with the strongest loyalty programs:

Starbucks

MyStarbucks Rewards is lauded as one of the best mobile experiences out there, and now consists of more than 13 million active members. The key for Starbucks is its loyalty program which is technology driven, to engage the millennial. Mobile payments and mobile orders now make up 7 percent of total Starbucks orders in the U.S—that’s a 16 percent increase YOY.

New members can go to Starbucks.com/Rewards or download the Starbucks Rewards app on their smartphone to get started. The program offers a number of different features and benefits:

• Earn free add-ons, drinks, and food items
• Order ahead and pay using the smartphone app
• Free refills on brewed coffee and tea
• A free birthday treats every year

Panera Bread

Panera offers a card-based loyalty program, and rewards its customers with free food and bakery items, invitations to special events, recipe books and more. Designed to be closely aligned with Panera’s core values and mission of delivering a unique experience to its guests, the intent of the ‘Surprise and Delight’ loyalty program is to connect more deeply with Panera’s customers by delivering unexpected and highly-relevant rewards for dining at Panera Bread bakery-cafes. MyPanera has 21 million active members, and is making the most of the 30 percent of millennials that prefer earning points based on the money they spend at quick-serves. A whopping 50 percent of company transactions occur on MyPanera cards.

Dunkin’ Donuts

The centerpiece of Dunkin’ Donut’s loyalty strategy is their mobile app. It serves as a combination of a digital wallet, loyalty rewards card, and an ordering platform all at once. Fifty-two percent of millennials participate in loyalty programs offered by coffee shops. Dunkin’ Donuts had captured more than 7 million of them as active members of its DDPerks rewards program.

Chick-fil-A

Chick-fil-A may be sitting on one of the best-kept secrets in fast food value. Fried chicken chain Chick-fil-A rewards select customers with access to perks such as free food, private tours and special events, The program is available by “invitation only”, and is offered in less than half of the chain’s more than 2,000 restaurants. and its loyal customers have helped Chick-fil-A achieve the highest Customer Satisfaction rating, as well as average restaurant sales of $3.1 million.