Restaurants Place Greater Focus on Loyalty Programs to Maintain Digital Gains During Pandemic

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Consumer data from loyalty programs also help restaurants create a more personalized experience for customers with tailored offers and discounts.

Some of the world’s largest fast-food chains have launched aggressive user rewards programs in hopes of holding on to the surge in new mobile app customers. Most chains automatically sign customers up for loyalty programs once diners order food from them via a mobile app.

According to a report from CNBC, Starbucks, Panera Bread, and Domino’s Pizza started the trend, “while Chipotle Mexican Grill launched its own version in 2019. But the last year has brought even more players into the arena. Wendy’s, Yum Brands’ Taco Bell and Restaurant Brands International’s Burger King are among the new entrants, and McDonald’s and Jack in the Box are gearing up to launch loyalty programs later this year,” the network reported.

“With Covid-19 and consumers’ shift in behavior, we’ve really seen a giant uptick in it, from the biggest brands that were kind of holding out, I’d say, are now launching programs to keep consumers returning and keep that loyalty,” said Elle Kross, director of client strategy for travel, hospitality and food services at digital marketing firm Movable Ink in an interview with CNBC.

According to the report:

Loyalty programs help fuel more frequent visits and higher average checks, according to Aaron Allen, founder of restaurant consulting firm Aaron Allen & Associates.

For example, Chipotle CEO Brian Niccol told analysts in April that the company’s loyalty program has been driving additional transactions across its “light, medium and heavy consumer segments.” Before the pandemic, the chain’s program had 8.5 million members. Now, it has more than 21 million members.

Digital orders made up the majority of the company’s quarterly sales for first time ever during the first three months of this year. Chipotle has kept pushing consumers toward its loyalty program by giving them early releases on new menu items and keeping some items, like the quesadilla, available only by digital order.

The report added that “While restaurant loyalty programs differ in design and rewards, most programs don’t use separate tiers based on how many points members have racked up, unlike airline rewards programs. For example, Starbucks dropped its tiers in 2019 in a bid to get new members more engaged with its loyalty program.”

You can read the entire report here.

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