How Technology With a Side of Service Is Shaping Restaurant Loyalty

Shifts in consumer behavior and advancements in technology are transforming the restaurant industry.

The evolving landscape of loyalty and engagement is also a trend to watch, Steve Fusco, president and head of all distribution for Rewards Network, told PYMNTS.

“If you look more generally at the direction of technology, everything is moving more toward self-service and frankly, simplicity … a lot of restaurant technologies are adopting that same trend,” Fusco said.

It was during the COVID-19 pandemic that a substantial push toward technologies such as QR codes for menu access and ordering first emerged, reflecting a consumer trend toward convenience and minimal contact.

Fusco stressed that while technology plays a crucial role in dining out, the essence of a memorable dining experience lies in the quality of service. This realization has prompted many restaurant owners to focus on creating an atmosphere that fosters loyalty through personalized and attentive service, rather than relying solely on technological solutions — particularly as consumers seek a return to more traditional, service-oriented dining experiences.

This underscores a critical insight: Dining out is more than a transaction; it is an experience that technology cannot replace.

But that doesn’t mean it is an experience technology can’t productively, proactively and profitably augment.

“In today’s context, dining is less about the technology than it is about the loyalty,” Fusco said.

The Role of Technology in Shaping the Restaurant Ecosystem

Fusco said his company’s primary mission is to drive full-price-paying diners to restaurants, enhancing those restaurants’ customer bases without resorting to discounting strategies that could undermine pricing leverage.

By collaborating with major loyalty brands such as airlines and hotel chains, Rewards Network helps restaurants attract customers who are likely to spend more and return more frequently while positioning itself as a critical partner for restaurants, particularly local and independent establishments that may not have the extensive marketing reach of larger chains.

This approach offers an advantage to smaller restaurants, which often lack the resources to implement comprehensive marketing and loyalty programs.

One of the unique offerings from Rewards Network is its ability to provide detailed sentiment analysis based on customer reviews, Fusco said. This tool enables restaurant owners to pinpoint specific aspects of their service or food quality that are influencing their overall ratings. By understanding these nuances, restaurants can make informed decisions to enhance their offerings and improve customer satisfaction.

Fusco pointed out that such data-driven insights are invaluable for small, independent operators who might otherwise lack the resources to conduct comprehensive market research. This capability levels the playing field, allowing smaller establishments to compete with larger chains in delivering superior dining experiences.

After all, while large, nationally distributed brands can capture vast amounts of customer data, independent operators typically struggle to gather actionable insights.

Emerging Channels and the Metrics That Matter

When it comes to evaluating the effectiveness of loyalty programs, Fusco advised restaurant owners to focus on metrics that align with their specific business goals. While common metrics include customer acquisition, repeat dining behavior and average ticket size, the key is to understand what the restaurant aims to achieve.

Whether it’s increasing first-time visits or enhancing customer retention, the chosen metrics should directly reflect these objectives, he said.

In discussing emerging channels for engagement, Fusco highlighted the surprising relevance of email marketing, especially at the local level. While not the most cutting-edge medium, email remains an essential tool for building and maintaining a large customer base.

More contemporary channels, such as social media platforms like TikTok, have also become crucial for restaurants looking to engage with a younger, more digital-savvy audience. Fusco mentioned that successful restaurants often employ dedicated staff to produce engaging content, such as videos showcasing unique dishes or special events. This content can go viral, boosting a restaurant’s visibility and customer traffic.

The success of Rewards Network is largely built on its strategic partnerships with well-known loyalty brands, said Fusco, who emphasized the importance of aligning with reputable partners such as American Airlines, Delta Air Lines and Marriott Bonvoy. These partnerships allow local restaurants to tap into a vast customer base, offering loyalty rewards that might otherwise be inaccessible to them.