In a fiercely competitive market many pub, restaurant and hotel operators are becoming increasingly dependent upon loyalty schemes to drive footfall and repeat business. At the most basic level operators hope to incentivise customers to return to their outlet by offering points or discounts through their schemes.  But there are other motivations such as:

  • Collection of customer data – loyalty schemes are often set up to enable the operator to capture customer data.  Ever hungry for up-to-date database content, this can be used for direct marketing by text, telephone, mail or email.  It enables tailored marketing to be sent out which can really show results.
  • Ability to track customer activity – a loyalty card can be used to track customers’ spending patterns and to monitor which products and offers are of interest to them.
  • Tailored marketing – the personal information gathered about customers, be it their ages or spending patterns, will enable offers to be tailored to certain groups – for example, an offer of a free bottle of wine to an individual if they dine on their birthday.  It is also possible to monitor who attends karaoke or theme nights so that future events can be advertised to them and invitations sent out maybe with a discount offer.
  • Marketing to Generation Y – personalised digital marketing is the future, yet a recent survey by Casio revealed that 91% of pubs do not currently provide personalised marketing communications.  The Casio survey looked at what 16-24 year olds, so called Generation Y or Millennials, want from pubs and clubs and what sort of marketing they respond to.  This age group has grown up with technology and is much more likely to respond to tailored, digital marketing than other age groups.  Generation Y are more likely to choose a venue based on a personalised discount sent to them by text or email than previous generations; a text sent at 5pm on a Friday night offering Happy Hour to Generation Y can be a very powerful business driver.  This generation spread good offers and reviews fast (and also spread bad experiences quickly), so it is essential for operators to be able to reach them.

Keeping it legal

In order to text and email personalised offers you will capture personal information for your database – it is very important that you process and store this information in accordance with the law.

The Data Protection Act and the Privacy and Electronic Communications Regulations both restrict the way that businesses can carry out unsolicited direct marketing.  The aim of a loyalty scheme is to gather addresses, email addresses, dates of birth etc, and as this will be “personal information” the provisions of the DPA must be complied with.  The DPA regulates how this information can be collected, stored and used.  In addition to the provisions of the DPA, those sending unsolicited direct marketing by electronic means must comply with the Privacy and Electronic Communications Regulations, which specifically cover the sending of texts and emails.

In addition, there are also various self-regulatory codes which regulate the content of advertising. For example The Committee of Advertising Practice – UK Code of Non-Broadcast Advertising, Sales Promotion and Direct Marketing, is one. The Direct Marketing Association also publishes a Code of Practice for its members and the Information Commissioner encourages all those involved in direct marketing to abide by this.

See also our article ‘Keep your promotions legal’ detailing the various regulations, including the implications of the promotion of alcohol.

The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.