Case Study: Promoting Loyalty With Outrageous Rewards

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VVVMerchant: Vino Vidi Vici
Market: Massena, N.Y.
Platforms: MustHaveMenus, SpotOn, Facebook
The Bottom Line: Offering over-the-top rewards can be a useful way to spur engagement and promote sharing for businesses with digital loyalty programs.

Most restaurants with loyalty programs offer customer rewards like free appetizers and discounts on specialty items. At Vino Vidi Vici, an Italian restaurant in Massena, N.Y., owner Crista Makdouli wanted to offer something extra to help her program stand out. “For 50 [purchases] you can get your name engraved on one of our tables, so you’ll have your own table,” said Makdouli. “For a million [purchases], we will deliver a free Ferrari with a large pizza.”

Makdouli has partnered with SpotOn to power her loyalty program, incentivizing repeat visits with major prizes (like free cars and engraved tables) as well as smaller rewards, like free glasses of wine, appetizers, and specialty pizzas. Of course, those basic prizes don’t generate nearly as much publicity as her big ticket rewards. “It’s something that nobody is ever going to reach; it’s just funny, and it gets that reaction. It’s like heart equity,” said Makdouli.

Customers earn points based on the number of visits, rather than the amount they’ve spent. “It doesn’t matter what you buy. For coming in, you get a ‘spot.’ It’s not a value-based program, it’s a relationship-based program” said Makdouli.

Not only does this relationship-based program help Makdouli incentivize repeat visits, but it also serves as a tool for customer acquisition. “It links through Facebook. It says ‘So and so is a big shot’ … something that’s really funny and cool,” said Makdouli. “It catches people’s attention when it comes up and [their] friends see, ‘John Doe is a big shot at Vidi.’” Customers can earn extra points for “auto-bragging” their reward activity on Facebook, and sharing links to the restaurant’s website with their friends.

Focusing on social
Promoting social sharing on Facebook is a major component of Makdouli’s marketing strategy at Vino Vidi Vici. “We focus a lot on social media and just developing relationships with customers [and] making sure their experience is always top notch once they’re in the door. To get them in the door, we focus a lot on social media and online marketing. We have a billboard, which has been great, but we put our time and money into Facebook.”

Although Makdouli favors free marketing platforms whenever possible, she isn’t afraid to spend money on paid promotions when necessary. She uses Facebook’s tools to manage her restaurant’s fan page for free, but pays to expand the reach of certain posts from time to time. “You’ve got to be really creative,” said Makdouli. “My goal in our marketing is to make people laugh.”

Adding online menus
Another way Makdouli has beefed up her restaurant’s presence on Facebook is by adding a menu component, powered by MustHaveMenus. She uses the platform to design professional looking menus, and seamlessly posts those menus on her website and social media pages.

“Online presence is so important. It really is,” said Makdouli. “We don’t do print advertising. We don’t do radio advertising. The local media [in our area] are very frustrated with us because they look at our place and they’re like, ‘Wow, that’s a thousand dollar a month account.’ But we focus on publicity and online social media marketing.”

She says the key to marketing is to never lose sight of what customers want. “Everybody loves the hook up, [like] you’re a VIP. You want to want to walk into a place and feel like you’re treated specially,” said Makdouli. “Not only do you get points and rewards [with our loyalty program] … but it gives you that feeling of a true VIP experience.”

The Takeaway
When most merchants think about the pros and cons of hyperlocal marketing, they focus on ROI. What Makdouli has discovered is that it can be hard to quantify all the benefits of a loyalty program, since it’s not always easy to convert brand loyalty metrics into numbers that can be charted on a spreadsheet. Instead, she’s decided to focus on improving the customer experience, under the assumption that happy customers are more likely to come back themselves and refer their friends.

One way that Makdouli has been able to hedge her bets is by linking her loyalty program to Facebook and encouraging customers to share their experiences on the social networking platform. Over-the-top rewards — like the promise of a free Ferrari after one million visits — spur interest in the program, and make it more likely that customers will want to participate for the chance to win (however remote the possibility of winning may be).

Stephanie Miles is an associate editor at Street Fight.

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Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.