COVID-19 brought rapid digital transformation to many customer-facing industries, challenging organizations quickly to adopt new technologies for the sake of customer safety. The quick-service restaurant industry was no different. A result of that transformation was the expansive growth and increased importance of restaurants’ mobile loyalty programs.
Chain after chain rushed to create, upgrade, enhance and increase adoptions of their mobile app and loyalty program model in 2021, hoping to capitalize on the digital opportunities and shifting consumer preferences that resulted from the pandemic. However, digital loyalty programs have gone from a simple marketing tool to an expected feature with increased consumer scrutiny, and any “cookie-cutter” programs that rolled out in 2021 will struggle to find their footing in what is now a crowded market.
What are these new entrants doing wrong?
Due to the pace with which these programs debuted in 2021, differentiated customer experiences were not a primary ambition for numerous quick-serves. Many of these new loyalty offerings provide very generic rewards, and as a result, do not do nearly enough to entice repeat behavior. Programs instead need to be rooted in customer data and previous spending habits, providing a uniquely individual experience.
So what do the best loyalty programs provide?
For customers in 2021, it's not about the destination but the journey. What does that mean in the context of restaurant loyalty programs? Well, from the moment customers enter the mobile app to the last bite of their meal, they're seeking cohesive, complete experiences. Moreover, they want to develop a meaningful relationship with the brands they frequently support.
Chipotle provided us with an excellent example of how to engage your customers in 2021. With the debut of their race to rewards mobile game and Tesla giveaway in June, Chipotle took the loyalty concept further than most competitors. In turn, the chain not only saw a massive increase in digital sales during the first half of 2021 but also experienced company-wide profit gains during the pandemic.
By cultivating a positive and complete buying experience through their loyalty program, Chipotle didn’t just hold firm during the pandemic. They grew.
Why do many laggards continue to struggle, and what's the future of QSR loyalty programs?
Those who were slow to adopt these systems generally have the most generic and forgettable loyalty programs. Quick-service restaurants that want to thrive into the future need to hone in on their customers' needs, embrace the rapid trial and risk that come with being a digital leader and fully commit to continuous investment and retooling of their programs as times and consumer preferences change. These quick-serves must also be confident they have the backend technology to support the digital demands of the future, as without it, all the other improvements become meaningless.
The Big Picture:
When foot traffic begins to return to pre-pandemic levels, it will be difficult for any cookie-cutter loyalty programs to hold onto COVID-era digital sales gains. To make sure that their digital investment pays off, quick-service restaurnats need to create individualized and engaging programs that develop meaningful relationships with their customers, ensure they have the capabilities to maintain and grow their digital platforms and become industry innovators.
Mike Welsh is the chief creative officer at Mobiquity. As CCO, he strives to create user experiences that will drive adoption and increase bottom-line performance, delivering on customer demand. Mobiquity is a digital consultancy; more information on their capabilities and past work can be found here.