New Research: What Executives and Customers Really Think of Loyalty

In the wake of COVID-19, quick-service restaurant customers have completely changed how they interact with their favorite brands. They want—and expect—loyalty programs to be an “Amazon-like experience,” says Tom Byrnes, senior vice president of marketing at PayiQ. Customers are looking for intensely personalized experiences, and brand executives aren’t always sure how to offer it to them.

PayiQ recently commissioned a survey on loyalty programs from the independent research firm Wakefield Research. The survey sheds light on just how much consumers love loyalty programs today, and, on the flip side, how challenging these programs are to grow.

A massive 91 percent of customers say a personalized loyalty experience is worthwhile, and 50 percent say they can’t live without it. At the same time, however, 69 percent say they’ll drop a program if their needs aren’t being met, and 42 percent of that group says they’ll leave if they aren’t being rewarded quickly. “Those numbers tell us that people are hungry for personalization,” Byrnes says. “They want their needs anticipated. They want rewards built on an understanding of their purchase behavior and menu preferences, and the big challenge is they expect this kind of loyalty offering from the very first signup. They expect a reward before you’ve even had any time to collect a scrap of data on their purchase behavior or what they like off the menu.”

“Customers now expect a lot of value up front, so that creates a conundrum.”

The survey also reveals the challenges executives face when growing personalized loyalty programs. Of course, properly integrating systems into the back office is a major undertaking in itself, but as the results of the survey suggest, that’s when the going gets really tough. Forty-two percent of executives say they’re struggling to convey the value of their rewards to customers. “Customers now expect a lot of value up front, so that creates a conundrum. Loyalty programs today have to be able to convey that value immediately, or they run the risk—as we’ve seen—of near-term abandonment and attrition,” Byrnes says. “Customers have a desire to have a more personal relationship with the brand, and that hasn’t been lost on leadership. Because of this shift in the landscape, nine out of 10 executives surveyed now feel that losing loyalty members is inevitable if they can’t find a way to provide a more personalized experience. What’s more, 75 percent of these executives say that diners are leaving loyalty programs because they don’t feel valued.”

Even with a strong loyalty program laser-focused on customer preferences, there are still limits to what brands can do. Customers might only open their loyalty apps—and self-identify—to get points or redeem rewards on large orders. “You’re missing out on learning who your customers really are,” Byrnes says.

Payments Intelligence® by PayiQ allows restaurants to securely gather first-party data on every customer who pays at a restaurant with a card. “Payments Intelligence augments your current loyalty program to identify customer behavior patterns,” Byrnes says. “It gives you the ability to leverage data to reach your customers in the highly personalized ways they want to see, with the infrastructure you’ve already created, without requiring any extra effort on the part of your employees or the customer.”

To learn more, visit pay-iq.com/payments-intelligence.