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How to build a customer loyalty program

Jen A. Miller | March 26, 2014
Boston-based restaurant chain b.good started its customer loyalty program with email 12 years ago because, well, it couldn't afford much else. As the chain has grown, so has its rewards program, which now has 53,000 'Family' members using keycards and smartphone apps to connect with b.good.

When b.good opened its first restaurant 12 years ago, the company had invested so much in its actual location that it had little left over for marketing.

B.good, with the tagline "," now has 12 restaurants in Massachusetts, Maine and Connecticut, with locations in New Jersey and Rhode Island opening this spring. One way the restaurant spread its brand was through a customer loyalty system, which began with email newsletters and coupons but now includes an app and keycard program that serves 53,000 of b.good's favorite customers.

When b.good started, co-founder Jon Olinto says, the idea was to have a relationship with the people who provided everything for their restaurant: "The people who grow our vegetables, raise our beef, make our cheese, make our yogurt for our smoothies." This idea extended to the customer, which is how the b.good Family was formed.

"The old way of dealing with customers was very-push oriented. It was all about the brand," says Mary Wardley, program vice president of CRM and enterprise applications at the analyst firm IDC. "Now we've swung the pendulum and it's about the customer. Where's the mutually agreed upon ground where customers are heard, we can reach them and we're respectful? We need to be authentic in this interaction."

Here's how b.good's customer loyalty program makes those interactions authentic.

Customer Loyalty Program Started With Email Freebies

Upon opening its first restaurant, b.good started using email to reach customers for a simple reason: Cost, or lack thereof. The company didn't have a lot of money for advertising - certainly not enough for a traditional radio or TV ad campaign - but still needed to get the word out.

"We knew we had to use email as a channel to connect with customers. It was free. We had a story to tell," Olinto says.

To start, b.good captured email addresses manually, either into a laptop in the store or through paper sign-ups. The restaurant used those email addresses, not just to share its story but also to give away coupons for free food as a way to build awareness about the company.

From the beginning, Olinto says, it was about giving "our family members" food for free as long as they stayed engaged enough to listen to the b.good story and participate in its concept - "anything in co-creation of the brand," he says. Creating what he calls an "information street team" brought awareness to what the restaurant was doing, for a lower cost.

Harnessing Data Helps b.good Interact With Customers on Personal Level

Five years into the program, b.good realized that, while the email coupon system brought people into the store, the company had no idea how efficient that system was. "The campaigns and promotions were out of control," Olinto says. "We knew our system was flawed because we weren't able to measure and see who the real ambassadors were."


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