As competition heats up, Benefits of a loyalty program have become a solution and an opportunity for businesses across industries, including retail, restaurants, and coffee shops.
The global loyalty program market was valued at $13.31 billion in 2024. This figure is expected to surge to $41.2 billion by 2032, according to research firm Statista.
Loyalty programs are a way to reward loyal and regular customers. To get rewards, customers collect points for every purchase. These points, called loyalty points, are collected via the restaurant’s or retailer’s loyalty or mobile app after every purchase.
After collecting a specific number of points, determined by the retailer or business owner, the customer is given a reward. Often the loyalty points translate into a coupon or voucher with a cash discount, known as a cashback reward.
Cashback rewards are the most popular form of rewards in customer loyalty programs, especially restaurant and coffee shop loyalty programs.
Loyalty apps and discount coupons entice guests to keep coming back for more discounts. Sometimes, restaurants or retailers may run offers for loyalty program users, giving them exclusive benefits, which boosts brand loyalty.
In this article, we’ll explore the data related to loyalty programs in Saudi Arabia and the importance of loyalty programs for restaurants and retailers. We’ll also show you how to choose the best loyalty software for your business.
Loyalty programs in Saudi Arabia
Customer loyalty programs are among the fastest-growing marketing tools in Saudi Arabia and the broader Middle East. This rise is backed by the region’s fast-paced digital transformation and the increase in online shopping via websites and mobile apps.
Many global brands, including restaurants and coffee shops, seek to attract new customers and retain current ones. Loyalty programs help achieve this dual target and increase the revenues and profits. This is the same for brands across Saudi Arabia and the Middle East.
The Saudi loyalty programs market registered a compound annual growth rate (CAGR) of 11.6% between 2019 and 2023. The market is expected to reach $1.59 billion by 2028.
Separate research forecasts an increase in tiered loyalty programs in Saudi Arabia, along with gamified rewards programs.
Loyalty program benefits for restaurants and coffee shops
As mentioned, customer loyalty programs are a marketing solution that improves customer experiences and builds a relationship between brands and customers.
Here are 6 reasons why you should consider adding a loyalty program to your restaurant, coffee shop, or chain.
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Attract new customers
Rewards programs help brands and retailers attract customers through welcome offers, such as a discount on a first order via the app or a free delivery. For restaurants or coffee shops, this can include a free beverage with your first order.
Brands can also use this idea of a first-time discount to prompt current customers to download a new mobile app. This increases the number of downloads and gives customers a kind of ‘thank you.’
Loyalty programs also help turn first-time buyers into regular or repeat customers. You can use your restaurant’s social media presence to advertise your new loyalty program and show customers how to benefit from it.
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Increase customer loyalty
Restaurant loyalty programs help increase customer loyalty and retention by offering rewards and incentives that boost repeat visits.
In addition, these programs help build long-term relationships with customers through personalized rewards, such as a birthday discount or a reward for using the app for a year…etc. Such rewards create a feeling of appreciation for customers.
Brands, including restaurants, can also create levels or loyalty tiers that offer additional benefits to repeat customers. For example, the more orders a customer makes, the more points they get for each order.
This can increase sales and build a connection between brands and their customers.
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Boost sales
Customer loyalty programs entice customers to increase their spending to get more points and, accordingly, more rewards. Depending on the products sold, restaurants and retailers can offer a free item or product after a specific number of purchases, which can boost customers’ average spending.
For example, if you’re launching a new vegan burger or seasonal coffee flavor, you can offer special rewards for those new items. This can make customers less hesitant to try the new product, especially if they get a reward in return.
You can also increase the visit frequency through cashback or exclusive discounts, by deducting the collected points and using them for purchases, or by making discounts specific to local seasons and holidays through the loyalty app.
Further reading: 6 Effective Loyalty Program Ideas for Restaurants
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Understand customer behavior
An important benefit of loyalty programs is helping business owners understand and analyze customer behavior and buying patterns. For example, you can uncover the top ordered items or combinations. For example, if you run a coffee shop, you can figure out which flavor of latte is in higher demand.
This also helps you enhance your menu items. You can also personalize offers based on data from previous customer purchases.
You can also use your loyalty program to improve customer experiences by analyzing their ratings and reviews and overcoming the shortfalls in your restaurant or coffee shop.
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Improve customer communication
An often-overlooked benefit of loyalty programs is enhancing brand communication with customers via promotional messages or notifications.
You can also enhance your customer relationship through personalized notifications on special occasions such as Mother’s Day, Valentine’s Day, or a customer’s birthday, all of which boosts engagement and retention.
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Boost competitiveness
An important benefit of customer loyalty programs is the strong competitive advantage. These programs can draw customers away from the competition, especially those that don’t offer loyalty programs.
In addition, rewards programs can improve a brand’s or restaurant’s reputation through positive reviews and ratings. This, in turn, can help the restaurant attract new customers and increase retention.
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Increase customer engagement
Last but not least, restaurant loyalty programs can help increase customer engagement, which contributes to boosting retention.
Customer engagement is an ongoing process of interaction and connection between a customer and a brand, with the aim of fostering a strong relationship. It’s about more than just transactions. It’s about creating meaningful interactions that build loyalty and advocacy.
How to choose the best loyalty program provider for your business?
To select the best loyalty program provider for your restaurant or coffee shop, you need to consider your needs and those of your customers.
Here are 5 tips to help you determine the best loyalty app or solution for your restaurant or F&B business.
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Compatibility with POS
Your restaurant loyalty program needs to easily integrate with your payment solutions, namely your point-of-sale (POS) solution, and other apps. Make sure you choose a loyalty app that supports your business growth.
Your loyalty app should offer a simple and intuitive user experience so customers can easily use it the moment they download it.
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Offers excellent customer support
When choosing a loyalty program service provider, make sure they offer great customer support. Their team should be available and accessible across multiple channels such as chat, e-mail, or even via mobile.
This ensures you get quick answers to your questions and support to any issues that may occur, especially when you’re just getting started.
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UI in your customers’ language
It’s important you choose a loyalty app provider that supports multiple languages. In the Middle East, including Saudi Arabia, users are bilingual.
There are also many expatriates who use English, whereas locals may choose English or Arabic. The user interface (UI) should support both languages (or more).
The loyalty app should also allow you to send notifications or popups in both languages based on the user’s choice.
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Can be integrated with websites and mobile apps
It’s important your restaurant’s loyalty program can be integrated and used across your restaurant website, mobile app, or both.
This is also important for customers who should benefit from your loyalty program when making an online order via your site or mobile app.
Your loyalty program should be easy to use, especially when registering or creating an account. This can contribute to increasing downloads, visibility, and engagement with the app.
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Can generate detailed reports
Reporting features are important when offering a loyalty program to your customers.
You want to track data such as the number of new users, number of points accumulated in a month, number of points spent in a week or month, and so on. These statistics and data help you learn more about your customers and their buying behavior.
Final words
Loyalty programs offer unique benefits for you as a business owner and for your customers. They help you improve communication and increase your sales and profits. As more restaurants, coffee shops, and even bakeries, enter the market, competition is getting tougher. Loyalty programs help you stand out and act as a win-win for you and your customers.
Foodics’ loyalty program is the perfect solution for your restaurant or café to retain your customers. It helps increase their loyalty by enabling offers and rewards across the different touch points.
Book a quick personalized demo to learn more, grow your business and sales, and increase customer retention.
