Whether using Paytronix or a competitor's product, we wanted to say "Congratulations" to all the restaurants out there that launched a loyalty program in 2011. You have joined the ranks of leading industry innovators such as Panera Bread, Red Robin, and Starbucks!
Like Jerry Maguire’s client, Rod Tidwell, in the movie Jerry Maguire, every restaurateur conveys a sentiment like “Show Me the Money” when we’re initially discussing the benefits of a loyalty program. So, we thought we’d recap some of the money driven to restaurants in 2011 by loyalty member visits and spending.
There were a number of restaurant chains reporting successful years in part due to their loyalty programs. Here are three specific instances we thought you would enjoy reading about:
1. Panera Bread’s MyPanera program is driving sales and growth according to multiple earnings articles published in 2011. In a recent article regarding its third-quarter results, Bloomberg Business Week reports:
“Revenue in restaurants open at least one year rose 6 percent at company-owned restaurants. The measure is an important gauge of a restaurant operator's performance since it excludes sales from stores that open or close during the year. The company said average customer checks rose 3.4 percent, partly because of a 2.5 percent increase in prices for its food.
The company's loyalty program and increased marketing spending are helping drive growth, said Wedbush analyst Nick Setyan in a research note."
Furthermore, in its Q3 earnings report posted on the site seekingalpha.com, William Moreton, Panera's CEO shared that its MyPanera program has grown to more than 8.3 million registered members.
"The next key investment I’d like to discuss is our loyalty program, which has now seen its membership grow to over 8.3 million registered users. We are very happy with this program’s size and the position it puts us in to understand and communicate with our customers to drive deeper relationships."
2. Red Robin partially attributes its 12-months of profitability to beefing up its loyalty program. An article published on November 4 in the Wall Street Journal stated:
“Through revamped advertising efforts, cost cutting, beefing up its loyalty program and focusing more on bar business, Carley has lead the company to a full year of profitability.
In the third quarter, Red Robin swung to a profit of $2.1 million, as revenue and margin rose from improving same-store sales, guest traffic and average check, the company reported Thursday.
Shares rose 9.2% to $27.28 in Friday afternoon trading, representing nearly 35% growth over the past year.”
3. Starbucks is taking a slightly different tack with its loyalty program. In 2011 the coffee giant focused on adding extra caffeine to its mobile technology. As a result, it is merging the benefits of a loyalty program with mobile payments and virtual gifts to provide an all-in-one guest benefit package – and it’s working.
According to the Wall Street Journal article, Starbucks Profit Surges on Loyal Sales:
“U.S. same-store sales rose 10% in the fiscal quarter ended October 2… Helping U.S. stores has been a new loyalty program, which allows users to load money on a Starbucks card and use it like a debit card; it is now used in one out of every four purchases. Shares of Starbucks were up 3.1%...”
Here's to driving even more guest spending and visits in 2012 with your loyalty programs!