Last year marked Pancheros Mexican Grill's 30th anniversary, providing an opportunity not only to reflect, but also reward customers that've helped the chain grow.
After opening its initial store in Iowa City, Iowa, the company has expanded to 70-plus locations in 13 states. And loyalty is a major part of that story. In fact, loyalty members account for 25 percent of sales. The key to this, according to marketing director Emma Reed, is constant and consistent news that keeps guests engaged. For example, a staple event for Pancheros every year is its $1 Burrito Event. Every school year, the fast casual kicks things off by giving away $1 burritos in college markets. In 2022, the company turned its flagship downtown Iowa City store into a birthday party by decking the entry with a balloon arch, using a DJ, handing out swag, and distributing $1 burrito codes for students to enter into the app.
QSR recently spoke with Reed about Pancheros' anniversary and the marketing tools it uses to build excitement around its brand.
What are the keys to appropriately market around a restaurant anniversary? How much is too much? How do you ensure customers care about this moment in the chain’s history?
I would say that it was a pretty big priority for us this past year to find ways just to generate excitement, but also to give back to our fans and to find ways to drive sales during those times. We were able to reach our fans both near and far by launching an exclusive merch line for our 30th. It was really cool to see how big the launch was for an apparel line. We really saw support from coast to coast and markets we aren't even in yet. So we do know that we have a strong following. And then as a way to give back to our 600,000-plus loyalty members, we gifted them an additional 30 bonus points on all orders the week of our birthday, which helped drive sales—a goal of ours. And then we really generated the excitement by, on our birthday, dropping 1,992 free burrito codes on our Instagram account that could be entered into the Pancheros app. Then we also worked with the University of Iowa athletics, and we changed up our messaging this past year to 30th birthday messaging and that we are a proud sponsor. We just hit people with different messaging across the board. We targeted our loyalty and then we targeted people that were just fans from around our area at our flagship location.
Could you describe some of the strategies that contribute to success with the loyalty program?
I would say a lot of our strategy revolves around just driving people into our loyalty program. We really offer exclusive offers and promotions throughout our app. And pretty much nearly all of our promotions are focused on getting the guests to download the app or to order in our app. Even different pieces of market materials, like direct mail. And we have an app-only code. We've started partnering with NIL athletes, and we have them release codes to their followers for free chips and queso. We do surprise drops on our social media accounts that has the code to put back into the app. And then we also try to offer free delivery incentives to those followers.
Could you put into perspective how much the addition of mobile pickup windows will help with building future loyalty/digital sales?
We added in the past couple of years the mobile pickup windows and we also started adding second make lines, which really just brought a lot of efficiency when it comes to digital ordering—both I would say for the guests and for our staff. We've seen guests over time start to really value convenience, and so we're really just excited to continue to evolve with that for the guest experience and continuing to see what their needs are.
What’s the key to balancing promotions/LTOs/offers etc. between attracting new customers and existing ones?
A lot of our national promotions are pretty exclusive to the Pancheros app. We really want to make the app a desirable way to order and just to use. So we allow [customers] to earn rewards as well as receive exclusive offers. And during those exclusive offers, we a lot of times have a signup option where they can also participate in the promotion that we are running. That helps draw them in at the same time. And it's really been successful for acquiring new customers. But then as far as keeping our current customers engaged, we really try to mix up our campaigns. We're not running the same campaign month over month. We're also really able to segment our guests so we can learn their behavior over time and message and target them with offers that make sense to them. The longer that the guest is active in our program, they're going to continue to benefit from that. Point-based promotions are pretty low cost to us, but it's also a way to continue to get them closer to that free burrito.
How do you approach balancing timing and cadence of LTOs throughout the year?
I would say luckily for us we continued to drop a limited-time offer throughout the pandemic and prior to the pandemic. A lot of our promotions and LTOs just tie into the holidays, whether it's a national holiday or just something that may be brand relevant. For example, National Burrito Day is something that we celebrate. We just try to keep consistent throughout the year.
In April, you celebrated National Burrito Day with free delivery and burritos. With inflation weighing heavy on restaurants and consumers, how do you as a marketer think about discounting? How do you know when it’s too much, or not enough?
I think honestly our loyalty program is going to be super beneficial to both us and the customer this year because they're really going to start to lean in on those restaurants that they love, and they want to earn those rewards and discounts still. We'll continue to focus on just balancing discounting in a healthy way, but we're not really planning to shift our marketing strategy. I think that we already have a healthy cadence just of the offers we’re running, and then we can also again have behavior-based targeting always running in the background, such as lapsed users, new campaigns, etcetera. We can always continue to monitor their behavior on how they're coming in.
What’s the plan for 2023? How will Pancheros show value to consumers?
We're really excited for 2023. We have quite a bit planned and projects that we're continuing to work through. We’re going to keep a healthy cadence of monthly offers throughout the year, but then also we're going to be releasing some new features on our app, such as e-gifting, and we're going to launch an SMS program. We're going to continue to bring back our fan-favorite limited-time offer of shrimp. We're going to keep it very consistent to years prior, but we are adding things based on what guests request and how the market’s evolving too.