Loyalty programs are everywhere and have been one of the most talked about topics in the quick-service restaurant industry of late. Forty-seven percent of diners now use at least one loyalty program, according to a January 2021 report from Patronix and PYMNTS, and that number is likely on the rise, with good reason. The report also revealed that members of loyalty programs spent more than twice as much on takeout as did those who were not members of loyalty programs.
Digital restaurant orders surged 124 percent, year-over-year, ending in March 2021, according to The NPD Group. The rise in online ordering during the coronavirus pandemic has been a motivator to quick service restaurants to retain those mobile and digital ordering customers with loyalty programs.
As loyalty programs continue to soar, differentiation will become key. Most loyalty programs offer discounts or rewards for specific actions taken. But, what other factors can help you define loyalty? And, can your best customers help you define those actions?
Rewarding Loyal Customers
Every loyalty program is unique, but most share a baseline of food rewards for dollars spent. Papa John’s, which hit 20 million loyalty members in July 2021, offers one point for every dollar spent, with 75 points earning a $10 food reward. McDonald’s recently launched its first loyalty program allowing customers to earn 100 points for every dollar spent, working towards 16 rewards options in four different tiers.
Regardless of how a loyalty program works, the program has to support the customer experience. McDonald’s is hoping their program will also add more personalization to the customer experience. In February, Alycia Mason, the company’s vice president of digital, media and customer relationship management said that staff members will greet loyalty members by name as they move through the drive-thru. Customers will also receive a personalized email, including upcoming deals catered to their preferences, after orders are picked up.
Loyalty programs should make customers feel that brands are connecting with them on a personal level. With more specific targeted rewards and personalized messages, customers will feel as though they have been recognized by the brand and asked for input.
Incentivized or Behavioral Loyalty - what’s more valuable?
Beyond the incentivized purchase of sandwiches, brands need to think about how else loyalty can be defined. Customers can be rewarded by specific behavioral triggers like social media interactions, certain site page engagement, and those that always order particular menu items.
Meaningful digital behaviors actually help in defining loyalty rather than relying strictly on the transactional exchange of asking for someone’s email address and providing a reward post accomplishment. For example, as a kid, I swept the rocks that washed out of my parents driveway weekly. I was not a loyal driveway sweeper, I was there for the reward .
Is your most loyal audience someone that orders twice a week, or someone that adds a side order every time? What actually makes them the most loyal customers? Anyone can sign up to participate in a loyalty program, but looking at your data per restaurant, and per customer, will help inform actions that are truly indicative of what loyalty means.
Loyalty can be created and optimized through meaningful positive experiences and revealed by analyzing the onsite behaviors that are exhibited by customers who order time and time again.
How to Leverage Data to Hyper Personalize Your Brand Loyalty Program
Focus on engagement. Make your customers feel valued and important to your brand. Focusing on incentivized loyalty, being rewarded for boosting a brand’s bottom line, can come at the expense of a healthy customer experience and long-term loyalty.
Get to know your customers. Brands must build customer profiles that reveal a deep understanding of the wants, needs, and behaviors of their most valuable customers. Customer profiles must be supported with local data across every touchpoint, from time on site, to mobile app, to POS.
Reward behaviors. Don’t focus exclusively on purchase rewards. Reward and recognize customers for interacting with the brand in a variety of ways, from social media, to interactive games, to site visits, or reviews.
Leverage technology. Developing a hyper personalized loyalty program requires technology that not only integrates with internal systems but offers granular analytics for real-time loyalty personalization
Loyalty programs have come a long way from punch-out cards in store and mail-in proofs-of-purchase. First party data will become even more valuable and necessary for brands to build and leverage as part of a full circle customer journey. Having the right technology and insights will enable brands to create the most hyper personalized customer experiences that will further define brand loyalty.
Patrick Pleiss is the co-founder and head of operations for Hyperlocology, a multi-location marketing platform that solves the pain of managing digital advertising for hundreds or thousands of brand locations. Hyperlocology empowers brands to centrally manage digital advertising, tailored for each location, with the transparency and collaboration required to drive results in every market.