It was restaurateur and self-styled pop culture icon Guy Fieri who said recently: “Food is not just eating energy. It’s an experience.”
It’s a statement that rings true for Steve Fusco, president at Rewards Network. As head of a company that brings customers, data, financing and loyalty programs to restaurants, he helps a volatile sector create experiences where the less-discerning eye would see simple transactions.
Fusco told PYMNTS recently that the first quarter of 2024 has illuminated “interesting” times for the restaurant industry.
That’s because the typical restaurant owner/executive tends to wear a variety of hats at any given time, he said. They’re the CEO, head of marketing, head of finance and head of operations simultaneously.
When economic volatility reigns, that juggling act gets a bit more difficult.
High inflation means that the cost of doing business has been more expensive for local and independent restaurants than it has been in years. High interest rates mean that capital required to capture expansionary opportunities — or simply to keep equipment up and running in the kitchen, or repair a grease trap — is expensive, sometimes prohibitively so. In response, restaurant owners are being pushed to examine “every corner” of their business.
“They’re looking for ways to make every dollar count,” he told PYMNTS, in the latest installment of the “What’s Next in Payments” series, which explores the lessons learned during the first quarter and what lies ahead.
Against that backdrop, he said, filling an empty table is vitally important — and so is getting customers to come in more often and spend more each time they visit.
Restaurants have regularly turned to a range of marketing programs that have sought to encourage repeat behavior — usually discounts on food or drinks. But the real key to loyalty, he said, is to craft a customer experience that has broad-based appeal beyond particular menu items.
That’s easier said than done, considering that the same macro pressures confronting businesses are also proving to be headwinds for consumers. Inflation is taking a toll on consumers’ wallets, creating even more demand for incentives that encourage individuals and households to keep spending.
Rewards Network, Fusco said, operates as a platform that makes “it more attractive for our customers to go out and dine,” while providing the restaurants the enterprise level data they need to manage their businesses more efficiently, fine tune the dining experience, and gain access to the capital they might need on a moment’s notice. It’s a holistic approach that Fusco said helps firms and consumers weather these economically uncertain times.
For the consumers — the platform members who also subscribe to airline, hotel and other loyalty programs — the incentive for them to spend more while dining is there in the form of rewards that can be redeemed and accumulated as they use their linked card to dine at participating restaurants.
For the loyalty programs, Fusco said, “these partners look to us to provide a daily rewards opportunity for their customers — they earn the points, the miles, and even the cash back that they love by doing the things they want to do every single day.”
The restaurants, he said, benefit by tapping into a larger population of customers than they would otherwise be able to reach if they were relying simply on their own marketing efforts.
“Whether I’m traveling for business, and I want to come back to a location, or if it’s just the place I want to stop in to get a sandwich on my way into work,” he said, rewards are instrumental in creating “a weekly behavior. These folks will come back, they’ll spend more, and they’ll build a relationship with that business owner.”
Rewards Network, he said, also has a competitive edge honed by an on-the-ground service team staffed by hundreds of employees who keep in touch with thousands of restaurants each week — and thus have a collective finger on the pulse of the ever-changing needs of the restaurant sector.
Right now, Fusco said, there’s a growing population of customers that are looking for different ways to find, choose and evaluate different restaurant experiences — and restaurants need to meet those demands. The platform model, he said, helps independent restaurant operators be present where the diners are and deliver exceptional experiences when they arrive.
As Fusco told PYMNTS, “you’re more likely to have success by fulfilling a need that your customer already has.”
Asked about access to capital, Fusco noted that “capital is a competitive advantage,” in an industry marked by high rates of failure. The ability for a restaurant to quickly access funds to capitalize on a market opportunity is what enables the most successful restaurants to retain their position.
The same enterprise level data that can help restaurants better understand their traffic, customers and success of their menus, he observed, also informs Rewards Network’s unique ability to pre-purchase credit card receivables; this differentiated cash advance to the operators allows them to pay down the working capital advanced as members dine.
As Fusco told PYMNTS, “dining out is not just a transaction — it’s an experience.”
The platform, he said, “directs your choices to these small businesses that are craving your attention and want to provide you with those experiences … while creating loyalty, which has become critical to this industry.”
