Digital restaurant ordering platform ChowNow unveiled its Loyal Local Membership program this week. The restaurant-to-diner service gives customers ongoing discounts on their orders while simultaneously funneling a little extra money to the restaurants themselves, according to a company press release.
ChowNow quietly launched the service at the end of March before making a more official announcement this week. Like many other restaurant industry initiatives these days, Loyal Local was developed because of COVID-19’s ongoing impact on the restaurant industry and the precarious financial positions many restaurants now find themselves in thanks to dining room closures.
Customers can sign up for the program by pre-paying a one-year membership fee through the ChowNow site that goes directly to the restaurant. Based on the level of membership they select — bronze, silver, or gold — they then receive up to 25 percent off on every order they make at participating restaurants for a year. A bronze status membership is $25/year and gets users a 10 percent discount. Silver is $40/year for 15 percent, while gold is $100/year for 25 percent.
Highly important is that this membership only works for orders made directly through the restaurant, either through its website or mobile app. Doing so not only builds a more direct relationship between restaurants and their customer; it also reduces the commission fee restaurants owe third-party delivery services. Usually, restaurants pay a service like Grubhub a fee per transaction based on marketing, order processing, and the actual delivery of the food. Knocking two of those elements (marketing and order processing) out of the equation cuts down on those fees, which, if you haven’t heard, are currently gutting restaurants. Most restaurants, though, will still need to use some third-party service capabilities for the actual delivering of the food.
It’s also a way for restaurants to boost mobile ordering and contactless payments, both of which will be important to the overall restaurant reopening process.
The program also provides something of a cash infusion to restaurants. ChowNow doesn’t charge restaurants to participate in Loyal Local, and customers pay upfront for the membership. All proceeds from membership fees go to the restaurant. A post by ChowNow has an extensive breakdown of the purported financial benefits for restaurants.
The company said in its press release it has added over 670 restaurants to the platform over the last couple weeks across California, Illinois, New York, and other states.
Restaurants need all the help they can get right now, but they’re not the only ones struggling to stay relevant. Restaurant tech companies are now having to prove that their products and services have real value to restaurants and not, as an industry friend of mine likes to say, a solution in search of a problem. The more a company can draw a direct line between its tech and a restaurant being able to keep its lights on, the better.