Change has arrived at a rapid clip for Zaxby’s in recent calendars. The chain sold a “significant” stake to Goldman Sachs in fall 2020 and hired former El Pollo Loco CEO Bernard Acoca as CEO the following October. At the time, the move—the brand’s first external CEO—cofounder Zach McLeroy said, was intended to “capitalize on the enormous opportunities available to Zaxby’s.”  

Here’s the curve:

Unit count

• 2021: 908
• 2020: 905
• 2019: 904
• 2018: 898
• 2017: 877
• 2016: 818
• 2015: 731
• 2014: 662

 

U.S. systemwide sales (in millions)

• 2021: $2,233
• 2020: $2,000
• 2019: $1,913.24
• 2018: $1,776.39
• 2017: $1,654.20
• 2016: $1,540.78
• 2015: $1,444.52
• 2014: $1,236.85

 

Average-unit volume (in thousands)

• 2021: $2,484
• 2020: $2,200
• 2019: $2,143.77
• 2018: $2,034.54
• 2017: $1,998.70
• 2016: $2,050.86
• 2015: $2,155.54
• 2014: $2,033.41

 

One thing growing alongside sales is Zaxby’s digital footprint. According to Apptopia, the brand has been the sector’s fastest-growing app throughout 2021, at 317 percent (based on growth of user sessions). That bests Jersey Mike’s (176 percent), CAVA (130 percent), Panera Bread (39.5 percent), and Whataburger (39.3 percent). Apptopia credited the surge to the launch of its rewards program. To incentivize customers to join Zax Rewardz, the chain has been offering a free Big Zax Snak Meal with every new download or update of the existing app. This was officially announced on October 11 along with the ability to order ahead, pickup in-store, or curbside. About a month earlier, the app updated with these features. You can see the spike here.

Zaxby’s honored the recognition on Tuesday by launching a deal—customers get free delivery with orders of $35 or more from December 26 through the end of the month.

QSR caught up with Patrick Schwing, chief marketing and strategy officer for Zaxby’s, to discuss what’s made the program so successful and how the brand plans to follow up the engagement with even more innovation.

So, firstly, congrats on what’s clearly been a banner year for Zaxby’s app. Per Apptopia research, we’re talking 317 percent growth. Apptopia really credits the boom to the company’s new, mobile-focused loyalty program, Zax Rewards. Did you have a feeling the platform would trigger this kind of response?

Our primary goal was to reward our most loyal Zaxby’s guests. We listened to their input while designing the Zax Rewardz  program and prioritized the features that improve their experience. The adoption is great, but most importantly, it’s exceeding our guests’ expectations. A sustainable loyalty strategy starts with acquiring new users but thrives when you maintain engagement over time.  It gives our team a lot of satisfaction knowing that guests are embracing the program we worked so hard to build.

Talk about how the structure itself played into the growth. Apptopia points to offering a free Big Zax Snak meal with every download or update, and the ability to order ahead, pickup in-store, or curbside. Would you agree?

We wanted to demonstrate our appreciation for loyal guests. The Big Zax Snak is our best-selling meal and an attractive incentive to download or update the new app. But the offer is just a way to introduce a new digital experience. We use targeted offers strategically and will not discount our way to growth. The app redesign focused on making it easy to navigate the menu and on frictionless ordering. Our goal is to make enjoying Zaxby’s convenient for our guests, which includes order ahead, curbside pickup or delivery.

How were these updates (and other upgrades) designed to encourage downloads? And why do you think this resonated so much with customers?

Our app update was designed to bring hospitality into a digital experience. The Big Zax Snack offer is an enticing reason to download. We worked with guests to ensure that once they’re inside the app, it’s intuitive to navigate and start earning rewards. 

Rewards have really become a crowded pool of late for restaurants; competing for app real estate on mobile devices. What are some ways Zaxby’s is offering a differentiated experience that’s worth the download (and keeping it)?

We put our guests at the center of the program. We learned that they want choice when it comes to rewards, but not an overwhelming or unnecessarily complex redemption process. Zax Rewardz makes it simple to earn points and apply them to any of your favorite menu items. And we wanted to surprise & delight guests with exclusive app-only offers on special occasions like Halloween as well as recurring monthly events like our recent Free Delivery Sunday campaign.

But a great app experience isn’t just about rewards. People enjoy customizing their order and selecting from our signature sauces, so each step of the ordering process is designed to provide choice while maintaining a seamless experience. Once you’ve ordered, it’s saved as a favorite meal so you can re-order with just three simple taps.

How has usage thus far provided learnings for potential future updates? In other terms, what are you learning about the Zaxby’s consumer perhaps you didn’t know before?

Guests are using the program both online and offline.  A lot of our loyalty transactions are happening at the restaurant, and you can even scan paper receipts to receive credit for your purchase. We want them to engage whenever and however they’d like, so it’s great to see them using a digital platform in the physical world as well. From there, we are seeing them convert from an analog to a digital experience because they see the value of the app and benefits of earning rewards.  

In what other ways is Zaxby’s communicating and staying connected to diners today? What are they asking for the brand, and how is Zaxby’s delivering?

We believe that “guest is boss” which means we have to deeply understand their needs and motivations across all aspects of the brand. We invest in consumer insights and research, but some of the most valuable input comes from social listening. We appreciate reviews and social media conversations because they offer unfiltered feedback. The number one thing guests ask for is to bring back certain menu favorites. Without giving away our future plans, I can just say—we’re listening.

Lastly, where do you think the state of consumer loyalty goes from here? What might be a topic we talk about in 2023 that’s not on everyone’s radar today?

Loyalty is earned, so you have to remain committed to delivering value for your guests. There are so many dining options and competitive loyalty programs, we will differentiate Zaxby’s by bringing hospitality to the digital experience. Our program will continue delivering industry-leading rewards and  innovation to personalize the experience.

Word of mouth has always been the best form of marketing. We know our loyal guests want to introduce other people to Zaxby’s, so we see an opportunity to make those connections through capabilities like refer-a-friend incentives and eGifting. While not necessarily new technology, it’s part of a holistic approach to engagement that extends beyond transactions.

Taking it one step further, music and media brands are built on subscription models where people consume relevant content. Similarly, we know that there are certain menu items guests crave and that drive frequency. It may seem like a stretch, but for super fans, subscription models can make sense for restaurants. This would open up opportunities for higher value benefits such as recurring discounts, set pricing, or access to exclusive partnerships with brands outside the industry (music, entertainment, media, sports).

Regardless of what the future holds, we will continue to listen carefully to our guests and strive to exceed their expectations.