Best Practices and Successful Case Studies for Execution of Loyalty Programs in Fast Food Quick Service Restaurants

Some of the best practices of executing loyalty programs in fast food quick service restaurants include; keeping in touch with your customers via email and text, keeping them engaged, getting priority service, and collecting data on what your customers want. A high level overview of our findings has been outlined below along with successful case studies that are a wealth of inspiration for you to take your fast food restaurant to the next level.

Best Practices of Executing Loyalty Programs in Fast Food Quick Service Restaurants

1. Maintain Contact with Customers Through Email and Text

• Over half of all customers in the United States are loyal to fast food restaurants that communicate with them through their chosen communication channels. Restaurants have recognized this and are using targeted marketing through email and SMS to entice customers to return for discounts, happy hours, events, and special occasions such as birthdays.
• A superior loyalty program allows you to establish unique audiences for your communications, allowing you to communicate with particular groups of consumers depending on your chosen criteria. For instance, if you’re going to introduce a new premium menu item and want to notify your high-spending visitors, your loyalty program may assist you in filtering out guests who spend more than a particular amount and then sending them a promotional message.
• A meaningful interaction is necessary for effective email and SMS marketing. If a visitor enjoys your establishment enough to offer you with their email address or phone number, it is your responsibility to present them with something of value in exchange. You can also utilize restaurant survey questions to directly inquire about your consumers’ perceptions of your brand and the kind of material they want to receive.

2. Keep Them Engaged

• Once you’ve registered members in your loyalty program, you must maintain their engagement and interest through ongoing marketing. Personalized offers are one method to do this.
• Fast food eateries, such as Pacific Catch, use this data to tailor offers and experiences depending on an individual’s eating patterns.
• Boston-based B.Good recently built its own loyalty program and mobile app, moving away from a vendor-supplied surprise-and-delight approach in favor of a personalized one based on individual preferences.
• Another method to keep consumers involved with your loyalty program is to provide them opportunities to earn additional points or even participate in company-sponsored games.
• This will foster client relationships while maintaining a high degree of interest. Cheetah Digital cites Chipotle as an example of a business whose reward program has been oversimplified. (Chipotle Rewards members get 10 points for every dollar spent, which equates to a free entrée at 1,250 points. Extra point days enable members to earn points more rapidly – and increase shop visitation.)
• A third approach to engage consumers is to allow them to use their loyalty points for something other than free meals; allow them to contribute back to the community in which they reside. When B.GOOD redesigned its loyalty program in March, it mixed conventional incentives with its goal.
• B.GOOD Rewards, like other loyalty programs, is a points-based framework that awards points for every dollar spent. Customers can redeem points on a limited number of menu items. However, customers have the option of donating their points to one of B.GOOD’s 25 community partners.

3. Getting Priority Service

• Priority service and early access to new dishes are not just an enticing aspect of a loyalty program, but also a reasonably affordable one. You may utilize these types of perks as high-tier prizes to improve client lifetime value, or you can make them instantly available to members, therefore increasing enrollment rates.
• Value generation is a critical component of the following Restaurant Strategy. Fast casual and fast food will confront the most significant opportunities in the previous decade. Additionally, it will include a delivery and take-out option! However, consumers are not searching for bargains. Food that is of high quality is not a commodity. They want a feeling of belonging, even if it means making more frequent purchases.
• Dunkin’ Donuts ingeniously built their app to showcase its product in the background, eliciting hunger simply by glancing at it – a strategy worth considering if you’re creating your own app.

• Members may place their purchase in advance using the company’s app and then claim it quickly when entering the store.
• With over 12,000 locations in 45 countries and over 8 million devoted consumers worldwide, Dunkin’ Donuts locations are undoubtedly busy each day. Recognizing that consumers despise standing in lengthy lines, the business markets its restaurant loyalty program primarily through priority services.

4. Make Your Restaurant Loyalty Program Simple

• Because the majority of consumers are already familiar with the concept of earning reward points for purchases, you won’t need to educate them.
• This familiarity simplifies program uptake and enhances the user experience, increasing the likelihood that customers will participate with your restaurant loyalty program.
• Additionally, there is the psychological component of pursuing a goal. For instance, just by visiting your restaurant, customers have moved 40% closer to winning that free entrée. That means every visit produces more income for your restaurant.
• By including gift cards into a restaurant loyalty program, consumers get the freedom to redeem rewards in any way they choose.
• Consumers using gift cards frequently spend significantly more than the value of the gift certificates, up to 25% or more, capitalizing on the psychological effect of “I’ve already spent the money.”

5. Provide Personalized Experiences in addition to Monetary Rewards

• Customers like discounts and savings—but customized rewards and experiences, such as receiving a complimentary lunch on their birthday, are much more important.
• According to the 2020 Bond Loyalty Report, customers enrolled in highly personalized loyalty programs are 7.5 times more likely to recommend those brands, 6.5 times more likely to spend more with those brands to earn more loyalty points, and 5.4 times more likely to continue spending with those brands.
• Based on the complimentary menu items it offers to clients on their birthdays, sweetFrog discovered that the average expenditure from such transactions was among the highest among its incentives.
• “Not only are customers coming to redeem them, but they are also buying more goods from us,” Schultheis explains.
• If you provide appropriate rewards or special offers, loyalty members will be more inclined to engage with your restaurant loyalty program. For instance, you may ask consumers whether they want to “continue receiving similar offers;” alternatively, when a client orders a pizza as an entrée, you can offer another pizza at a discount.

6. Recognize and Reward Loyalty with Each and Every Visit

• According to the 2020 Bond Loyalty Report, 78% of consumers are more inclined to spend again with fast food restaurants who provide a customer loyalty program.

• In other words, when given the choice between a restaurant that offers a reward program and one that does not, customers will pick the restaurant that offers the loyalty program.
• This is particularly true when a restaurant loyalty program regularly rewards them for each visit, whether via the accumulation of points toward a discount or the opportunity to redeem a coupon after a certain number of trips.
• You don’t want to throw out free rewards every time a customer comes in, but you also don’t want them to feel as though they never earn anything.

7. Compile Information about Your Customers’ Wants and Needs

• Gamification and communication both need one more component to be really effective: personalization. When you have a thorough understanding of your consumers, you can begin building meaningful connections with them by customizing their experience with your restaurant’s brand.
• Therefore, what is the secret sauce? Data. It is essential to collect accurate data in your restaurant CRM in order to create an informed restaurant customer loyalty program.
• The following are some examples of the kinds of data that you should collect:
  • Whether your visitors eat in or order takeout or delivery, we’ve got you covered.
  • When do they visit your establishment?
  • How much money they spend on a weekly, monthly, or annual basis
  • Which menu items do they select? (as well as the items they avoid)
  • Whether they are restricted in any way by their diet
  • Personal information about the individual, such as their birthdate
• The more data you have about your visitors, the more accurately your reward program offers may be targeted.
• Additionally, a good restaurant loyalty program will give statistics on how your customers react to the incentives you provide. You, too, can benefit from this knowledge.
• For instance, if the majority of your visitors return on their birthdays to redeem their incentives, you know you have a chance of increasing their spending once they enter. You may want to further enhance the gamification of their birthday experience by awarding double points if they spend a certain dollar amount at your restaurant on their birthday.
• Similarly, if you find that guests are not reacting to your two-for-one happy hour offer, it may be time to reconsider.
• The options are limitless, so collect data to determine how you can maximize your loyalty program and increase recurring business. Additionally, do not be hesitant to experiment with other methods.
• For instance, Anthony’s Coal Fired Pizza, a restaurant chain with numerous locations across the eastern United States, utilized a data-driven loyalty program to monitor guest preferences and reintroduce 1,800 lapsed customers. Anthony’s collected customer information (with consent) during the login process and then put it into its rewards program to enhance visitor profiles.
• “By combining timely and relevant communication with a rewards program, we can significantly improve the performance and value of our customer communications,” Skip Kimpel, Vice President of Information Technology at Anthony’s Coal Fired Pizza, stated in a statement published in Hospitality Technology.
• Creating a memorable customer experience is an art as much as a science – but it all comes down to making your consumers feel unique. A successful loyalty program leverages data to learn more about your visitors, allowing you to reward them in meaningful ways.

Successful Case Studies of Loyalty Programs in Fast Food Quick Service Restaurants

It’s now time to be inspired. Let’s look at a few instances of fast food restaurants that have successfully implemented loyalty programs.

1. Starbucks

• This coffee juggernaut has effectively incorporated mobile marketing into its restaurant strategy. Starbucks notifies customers through its mobile customer loyalty app about chances to earn double rewards on their purchases.
• Additionally, during Starbucks’ downtime (2:00 – 4:00 p.m.), the business sends a notice to members of its loyalty program inviting them to take advantage of a 2-for-1 drink offer. This promotion encourages customers to bring a buddy for coffee, thus boosting traffic and revenue.
• Starbucks has redesigned its rewards program, allowing users to redeem modest prizes without needing to save up. With 25 stars, you may get a free espresso shot or dairy replacement; with 400 stars, you can receive free merch or at-home coffee. Best of all, members get advance notice of Starbucks’ weekly happy hour specials.
• MyStarbucks Rewards is widely regarded as one of the finest smartphone experiences available, with over 13 million active users. The secret to Starbucks’ success is that its rewards program is clear, straightforward, and convenient. Mobile payments and orders now account for 7% of all Starbucks orders in the United States—a 16 percent growth year over year.
• Initially, the coffee giant’s loyalty program awarded customers points for every purchase, regardless of the cash amount, which could be redeemed for any beverage after they reached a specific threshold.
• They updated the program in 2020 by tying points to dollar amounts and allowing customers to redeem them for customized incentives like as a complete beverage, an additional shot of espresso, or even goods, depending on the number of points redeemed. Additionally, members get benefits such as a complimentary birthday item, bonus point days, BOGO discounts, and Free Coffee for Life competitions.

2. Chick-fil-A

• Chick-fil-One A’s program was a close second. The chain uses a tiered structure to encourage loyalty: the more you spend in a given year, the better your membership level. And as you go through the tiers, your benefits become more significant. With each purchase, you’ll earn points, with the number of points earned per dollar increasing based on your membership status: Silver, Red, or the ultimate Signature membership. Additionally, you’ll have the option of sharing your prizes with friends and family.
• Chick-fil-A wanted a loyalty program to fit its image as the inventor of the famous pickle-filled chicken sandwich. It encapsulates all of the above-mentioned nice small features: loyalty points redeemable for free meals, birthday incentives, and an app that manages both orders and the loyalty currency.
• However, Chick-fil-A One takes this a step further by including components of a genuinely next-generation restaurant loyalty program. The most noteworthy feature is their tier system: clients get 10 points for every dollar spent by default, but after they reach the yearly limit of 1,000 points, they qualify for the Silver Membership tier.
• Chick-fil-A takes the road less traveled by offering its loyal customers the most unique incentives via a “invitation-only” loyalty program. The “A List Loyalty Program” is available in less than half of Chick-fil-2,000 A’s locations, and its devoted consumers have helped the business earn the highest Customer Satisfaction rating and average restaurant revenues of $3.1 million.

• Silver members get 11 points for every dollar spent, and they also receive additional benefits, such as the ability to give their free meals to friends or family members. However, the really exceptional items are reserved for Red Members, who must earn 5,000 points each year.
• Those who consume enough chicken nuggets to achieve this level get access to new menu items and interesting prizes, such as complimentary admission to the College Football Hall of Fame in Atlanta.

3. Panera

• Panera Bread launched the industry’s first unlimited subscription coffee service a month before the COVID-19 pandemic hit. Despite the economic implications of the public health crisis, Panera’s loyalty program has already grown to 835,000 members, with 700,000 joining in July alone.
• This project demonstrates how you may keep a loyalty program simple by determining what your consumers want and then providing it. The public loves its coffee! And for just $8.99 a month, you get limitless coffee? Better still.
• When you become a member of MyPanera, you immediately get a complimentary pastry or dessert from the bakery. While the amount required to earn prizes is a bit unclear, a ticker on your dashboard will indicate how close you are to earning your next reward. Panera’s small print says that “the frequency of visits, the volume, and kind of purchases purchased” are all included towards your total.
• Panera’s loyalty program is card-based, and it rewards consumers with free meals and bakery products, invites to special events, and recipe books. MyPanera has 21 million active users and is capitalizing on the 30% of millennials who want to earn points based on their quick-serve purchases. MyPanera cards account for a staggering 50% of business transactions.