How Technology Could Save The Hospitality Sector

By Tsewang Wangkang, co-founder and CEO of Embargo

The coronavirus pandemic has certainly shaken the hospitality sector. 

Indeed, throughout the lockdown period, the revenue of many bars, restaurants and coffee shops completely dried up.  Consequently, the hospitality sector reported almost £30 billion losses in revenue between April and June. 

Suffice to say, the sector faces some challenging times ahead as it sets its sights on recovery; however, the crisis has presented certain opportunities as well. Indeed, the pandemic has exposed one particular area in which many hospitality businesses are falling short; customer loyalty. And with bars, restaurants and clubs looking to rebuild their client base, there has never been a more appropriate time to reinvent their current loyalty schemes.  

The problem with loyalty

Of course, the hospitality industry has long been aware of the importance of customer loyalty; “regulars” are, after all, the lifeblood of bars, restaurants and coffee shops across the UK. However, there is a distinct lack in knowledge as to how businesses can effectively tap into this market. 

By this, we refer to the inability of many bars, restaurants and coffee shops to develop efficient and cost-effective loyalty schemes. Countless venues still rely on old fashioned techniques to entice repeat customers. 

For example, many still use paper stamp cards as their go-to loyalty scheme. Worryingly, this instance on using cards which can be easily lost or damaged seems to be ignoring consumer demand for convenience. Indeed, the majority (59%) of 25 to 34 year olds agree that digital loyalty schemes improve their customer experiences with brands; the sector cannot afford to overlook such a large demographic. 

Additionally, many organisations are struggling to effectively communicate with their loyal customers. Instead of sending personalised offers or updates, the majority of customers receive identical, generic marketing materials. Such messages tend to be ignored or dismissed as spam. Given that 62% of UK consumers are more willing to recommend a brand that offers a more tailored service, it is clear that businesses would be wise to adopt their communication strategies accordingly.

There is a clear and urgent need to bars, restaurants and coffee shops to restore their valuable loyal customers it is clear that the sector is crying out for urgent change. And we believe that technology is the answer…

Simple solutions

The solution to the industry’s issue with loyalty needn’t be complicated. In fact, tech-based loyalty schemes perhaps provide the simplest solution. 

For example, loyalty apps enable app users to collect and redeem loyalty rewards points virtually, eradicating the need for contact between hospitality staff and customers. This is a far more convenient system than hoping the customer does not lose or damage their loyalty card.

What’s more, they give restaurant, bar and coffee shop owners access to crucial data, which enables them to monitor customer patterns and preferences. Many loyalty apps can be connected to business customer relationship management (CRM) systems, so business owners will be able to identify their regular customers, communicate with them and notice when they stop coming. Consequently, the business can tailor their rewards accordingly in order to drive repeat business and make sure that key customers are not lost.

Further, an app enables businesses to better communicate with their clientele. Gone are the days when generic marketing emails overload inboxes. Instead, restaurants, coffee shops and bars can communicate with customers via the app, through personalised messages and rewards. Thus, the personalised offers appear more enticing, increasing the likelihood of the customer returning to the venue.  

Incorporating tech into business strategies

Many hospitality business owners tend to assume that whilst useful, incorporating tech solutions into business strategies will be a resource-intensive task; but this needn’t be the case. 

Even the most advanced digital loyalty schemes are incredibly easy to introduce into businesses. In some cases, it could be as simple as signing up to a digital platform, and setting up a chosen loyalty scheme onto an app. From there, bars, restaurants and coffee shops will have access to an intuitive CRM platform to capture and access customer insights, analytics and summaries. 

Such “plug-and-play” technology is now finally accessible and cost-efficient within the hospitality sector, making it easier than ever for businesses to transform their customer relationship strategies.

The hospitality sector faces a great challenge, as it seeks to recover from COVID-19. However, they must seize the opportunity to overhaul their current customer loyalty strategies and look to incorporate tech-based solutions into their long-term business strategies. Only then will hospitality businesses be able to attract and sustain a loyal customer base. 

Tsewang Wangkang is the co-founder and CEO of Embargo, a loyalty platform that allows restaurants, bars, and coffee shops to recognise and reward their customers through the use of pioneering technology. Launched in 2017, Embargo is helping hospitality businesses embrace digital transformation by connecting them directly with their customers delivering bespoke loyalty rewards and enabling communication.

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