This is a special message from Paytronix.

Restaurant marketing strategies are rapidly changing as more chains, such as Starbucks, Panera Bread, Papa Gino’s / D’Angelo and Subway, are taking advantage of loyalty programs to better connect with guests and, as a result, improve sales.

At Dedham, Mass.-based Papa Gino’s, implementing a loyalty program at the 370-unit quick-serve pizza and sandwich chain not only increased Rewards member visits by 35%, it also helped the company get to know its guests better, said director of program management office, John Eagles.

“To understand how to motivate your guests to visit you more frequently and spend more with each visit, you first have to know who they are,” he said. “With our program, we’re able to maintain a guest database.”

Eagles added that the chain can “segment the data to determine its best guests and monitor how frequently they spend on a weekly basis. Without a loyalty program, how would we know?”

At Papa Gino’s, guests are rewarded with one point for every dollar they spend. When those points total 50, they convert to 5 discount dollars. Eagles said approximately 74% percent of guests enrolled in the program have earned a reward.

“If you can get a 4 percent to 6 percent redemption rate on an email, that’s good,” he said, “but we experienced one campaign where we hit 62 percent. Not only that, when they did come in to redeem their rewards, they spent 20 percent more than our organization’s average check. That means if you give them $10, they not only will use that, but they’ll spend 20 percent more than if they didn’t have $10 on the card.”

He added that the program has boosted visit frequency of even its super-heavy users or best customers. “When a guest becomes a ‘heavy’ or ‘super-heavy’ user we don’t want to lose them,” Eagles said, “so we’ve adopted a special communication program tailored to a best guest’s behavior. And because we have identified these guests, if any of them stop coming in, we can contact them and ask what we can do to make things better.”

Since rolling out the Paytronix-powered program in December 2009, Eagles said 35 percent of all Papa Gino’s customers are loyalty members.

Using the program, he said, has enabled a one-to-one communication with guests. We can communicate with guests based on how often they communicate with us. This is so much more effective than “blast” email marketing as each email can be tailored to each guest.We can analyze the statistical performance of every offer we send and over time build a repository of campaigns that work.”

“We’ve seen increases in frequency and spend at significant enough rates that we know the program works. We need to stay focused and continue to improve the way we segment, report and analyze the effectiveness of each campaign,” he said. “The whole key is to maximize the return on every dollar you spend.”

Andrew Robbins of Paytronix agrees with Eagles’ that it is all about guest loyalty and ROI. “A loyalty marketing strategy makes sense financially,” he said. “Dedicating a portion of your marketing budget for a loyalty program provides relief from the weight of mass media non-traceable marketing spend. From a cost perspective, it provides a tremendous bargain.”

Join John Eagles and Andrew Robbins at the 2011 National Restaurant Association Show in Chicago, as they explain how Papa Gino’s grew its member visits by 35% with its Rewards program. See their presentation Tuesday, May 24 at 10 a.m. on the Technology Pavilion stage. If you can’t make it to the presentation, visit Paytronix at booth 5553 and they’ll be happy to share the presentation with you and your team.