LEXINGTON, KY - With hard work comes reward, and for Brian McCarty of the Bluegrass Hospitality Group, his hard work comes in the form of rewards for his customers.
Three years ago, McCarty decided to launch a customer rewards program similar to what's seen at groceries, gas stations and some high-end restaurants. While he wanted the program to be simple - earn one point for every dollar spent and get $10 back for every 150 points - McCarty wanted it to be more than just a punch card showing customers' progress.
He thought it would take around four months to get a program that would be compatible with the point of service (POS) machines used at Malone's, Sal's, Harry's, Drake's and Aqua Sushi restaurants.
"It has been an absolute nightmare writing all that logic and software," he said. "Nobody wanted to make the investment to be able to track this on the restaurant side."
Bringing together multiple brands and stores and different platforms created a larger challenge than expected, McCarty said. The POS machines are great at telling a bartender what drinks to make or a chef what meals to cook, but not to track the dollars a customer spends from visit to visit.
After visiting with fellow restaurateurs in Seattle, Salt Lake City, Chicago and Boston, McCarty decided to take out restrictions many of his colleagues have in place. Such restrictions include not counting money spent on weekends, not allowing points to be redeemed on a weekend, and not counting money toward catering and banquets. Other programs also have rewards expire after a certain date.
"We felt very strongly about making it appealing and easy access," he said. "We want to implement this program for everybody, not just the people that come in once a month. ... if you come in on your birthday or your anniversary once a year, we want you to be able to earn points from day one. We want you to be able to not have them expire."
Points earned during a meal cannot be applied toward the bill. However, if diners would like to enjoy an after-dinner drink at Drake's or Harry's immediately following their meal at Sal's or Malone's, points can be used.
Points are tracked with credit card-style membership cards, key ring tags, magnetic barcodes that can adhere to the backs of other credit cards or drivers licenses. Customers can also use their phone number to be credited for purchases.
Registration for the program begins Wednesday, October 21, and those who sign up before October 30 will get 50 bonus points. Online registrants also get a gratis lunch.
Though his contemporaries in other cities might be struggling with the downturn in the economy, McCarty said the restaurants he and business partner Bruce Drake have opened up are doing well.
"(We've done) amazingly well and I credit that to the fact that we're very diversified and we have multiple offerings," he said. "The guys who used to get the Kobe steaks are now settling for porterhouse and ribeyes. The ribeye guys are now settling for sirloins and fillets, and $200 bottles of wine aren't being sold nearly as often as they were 18 months ago. But at the end of the day, we serve over 20,000 customers a week, and that is nothing short of amazing."
BHG's recent success has made it easier to go ahead and launch the loyalty program McCarty started working on in 2006, considering the expense.
"I've invested a quarter of a million dollars in this thing. That's a lot to stomach," he said. "If I had 25 or 30 stores or 125 stores, what's a quarter of a million dollars? Really that investment wouldn't be that much more or that much less no matter what your size. It's purely fixed cost that you have to do, whether you're three stores or 103."
The program does benefit the restaurant group as customers e-mail addresses will be captured when they sign up for the program. Monthly statements showing a customer's point balance can be sent along with direct marketing to BHG's customer base.
Since the program was conceived, BHG shuttered its Oscar's concept adjacent to the Lansdowne Malone's and opened Drake's, which McCarty says is still in its honeymoon phase with customers.
"But it looks like its spot on for what this part of town is looking for," McCarty said of the Drake's concept.
He and Drake are also looking for other parts of town, or other towns altogether, to branch out the Harry's brand. In 2008 McCarty looked for spots in Lexington's downtown and in Nashville for places to open other Harry's locations.
"We're looking everywhere," he said. "If it's a good deal and we feel like there's a viable business opportunity there, I'm all over it. We continue to look downtown (Lexington) and the right deal hasn't crossed my desk yet. But my goodness, the explosive growth downtown, it's got my head spinning."