With more competition than ever, today’s consumer seeks convenience, utility, and value from the brands they frequent. And in a shifting economy, a loyalty program can often make the difference for a consumer choosing one brand over another – especially as they turn to its benefits to offset direct wallet impact.
Rewards, exclusives, deals, and discounts have all played a role in the QSR landscape for decades traditionally under the ‘limited time offer’ headline, but more recently restaurants leading the pack all know that the right consistent loyalty tactics are what really drive the sticky behavior that underpins long term relationships. As flexibility, choice, and connection across touchpoints are now requirements, restaurants must respond accordingly or risk losing ground to competitors.
Whether you’re revamping an existing program or setting up a new one, these tips can help you attract and retain consumers in the long run.
Getting Creative with Point-Based Programs
Traditional point-based programs are one of the most common types of loyalty programs, and probably the first kind you think of. But today’s top QSRs are moving away from static, one-size-fits all points tiers in favor of more personalized ones that feature customized benefits, flexible rewards, and more choice in redemption. This can manifest a couple different ways—anything from allowing the consumer to choose which days they earn bonus points to giving the consumer the ability to transfer their points and redeem rewards with outside partners.
This strategy allows brands to meet consumer expectations, but it also makes good business sense—with dynamic engagement, QSRs can be more selective and ROI-driven, prioritizing what works for each individual diner instead of what’s required for each tier. Mass promotions for all members are still popular and have their place—especially around holidays and key brand events—but they are being used more sparingly as targeted offers become more popular. Exclusivity plays an important role here as well. For example, a brand can promote an offer to all its consumers that can only be unlocked by members meeting specific criteria, drawing mass appeal only accessible for the most engaged consumers. This drives a FOMO—fear of missing out—mentality that can encourage more participation for consumers that want to be a part of the action.
Prioritizing Frequency and Convenience
Restaurant loyalty programs reflect a unique relationship between consumer and product. Unlike airline loyalty programs, for example, which require significant spend on the consumer’s part to feel value, restaurants can demonstrate more quickly the value they provide. The average consumer is more likely to get a coffee every morning than they are to book a flight, which means they’ll accumulate and redeem more rewards more quickly.
Though many restaurants would prefer to be the first and only choice, it’s far more realistic to focus instead on relative frequency within the category. Restaurants that lean into point-based programs should reflect high frequency among their top guests, reinforcing that they are consistently top of mind with the consumer and proving the approach worthwhile. With an abundance of options, today’s consumer does not view loyalty as an exclusive relationship; instead, they’re more likely to rotate where they shop or dine in line with their changing preferences. To meet the consumer where they are, restaurants should instead focus on capturing and retaining their share of the consumer’s dollar. With the right limited time offer (LTO) and an easy, seamless experience, QSRs can play their part in a mutual relationship that benefits both parties.
Ramping up your loyalty program through brand partnerships
Though popular in the travel and tourism industry, restaurants are less likely to allow consumers to redeem points with other partners. But partnerships allow QSRs to excite existing users with new offers and reach new audiences entirely. And of course, consumers who have more choice in where and how they redeem become more loyal to the brand that enables such flexibility.
One unique problem partnership solves is point breakage, where consumers earn points but never spend them. While that may sound like a good thing for the restaurant, it’s actually indicative of an unhealthy program that’s not working the way it’s intended. Rather than let those points wither away, allowing consumers to redeem them through a partner underlines the restaurant’s commitment to delivering value and alleviates any associated frustration with expired or impotent rewards.
At the end of the day, it’s important to remember that loyalty is ultimately an outcome, not a program. With the right combination of behavior drivers and valued rewards, restaurants can design loyalty strategies that not only keep consumers happy and coming back for more, but positively impact the company’s bottom line. By getting creative with a traditional approach to points, prioritizing frequency over exclusivity, and embracing partnerships, restaurants can ensure they’re doing their part to sustain healthy, profitable relationships with consumers.
Stephanie Meltzer-Paul is Executive Vice President, Loyalty overseeing Merchant and Issuer Loyalty for Data & Services. She is analytical, digitally savvy and highly creative, having joined Mastercard from Inspire Brands, where she led loyalty, digital and customer relations for six well-known brands, including Dunkin’. While there, she spearheaded the most robust digital and loyalty enhancements in Dunkin’s history, with digital revenue more than doubling during her tenure. Her prior experiences include BJ’s Wholesale, Starwood Hotels & Resorts, and American Express For her efforts at Inspire and Dunkin’, Stephanie was named to Brand Innovators Women to Watch in 2021 and the Nation’s Restaurant News 2020 Power List and frequently represented Dunkin’ in National speaking engagements and in media. Stephanie received her BS from Ithaca College.
