The Loyaltees Awards highlight leading and innovative brands in the restaurant and retail industries. When it comes to incredible guest engagement strategies, this year's winners set a new standard of excellence.

 
 

An Interview with John Eagles, Director of Program Management for Papa Gino's / D'Angelo

John Eagles of Papa Gino’s / D'Angelo discusses how implementing a loyalty program not only increased member visits but also helped the company get to know its guests better. 

 

Checking in with Papa Gino’s/D’Angelo's Loyalty Success

John Eagles of Papa Gino’s / D'Angelo discusses how implementing a loyalty program not only increased member visits but also helped the company get to know its guests better. 

Paytronix: Why did Papa Gino’s / D’Angelo make instituting a loyalty program a top priority within the organization?

Eagles: Papa GinoWe viewed the Rewards program as a means to increase sales and frequency. Plus, we needed guest data to make better decisions – not only in marketing, but throughout the organization.

We realized we could supplement our FSI circulars and general discounts with a marketing approach that was one-on-one focused with our guests. When we read about the success of the CVS rewards program, we were convinced that a loyalty program was the right strategy for Papa Gino’s/D’Angelo.

Paytronix: When Papa Gino’s began discussing the feasibility of a loyalty strategy, what was your biggest fear?

Eagles: We had four primary concerns. First, we worried about how to explain the program to our guests. There is such a short period of time where our team members have the opportunity to talk with our guests – we needed the program to be simple to understand and it needed to be explained in a short period of time, plus the message had to be compelling.

Second, how were we to get 5,000 associates to all do the same thing when interacting with guests about the Rewards program? We spent a lot of time, for example, deciding how the associate would ask the guest if they were a member of the program. We then crafted a training program that ensured consistency.

Third, what was the magic reward percentage that would be within our budget but would still motivate guests to visit? We wanted to keep the program simple and easy to understand so we went with a 10% program.

Fourth, would we be giving a discount to people who would have come in anyway? We were relieved to prove this one wrong.

Paytronix: Wow, you said you proved that you weren’t rewarding guests who would have come in anyway. How did you prove that?

Eagles: D'AngeloEagles.We discovered that simply reminding people they had a reward on their card would drive them into our restaurants and compel them to spend more than that reward. If there were cannibalization, we expected that the average check from these members would be less than the reward value. Not true. The average check is and continues to be more than the reward value.

A simple reminder that the member had a reward on their card got us a 62 percent response rate. Not only that, when they did come in to redeem their rewards, they spent 20 percent more than our organization’s average check. That means if we give them $10, they not only will use that, but they’ll spend 20 percent more than if they didn’t have $10 on the card.

Paytronix: How did you get 5,000 of your associates to embrace the program and as you say “do the right thing?”

Eagles: We started with the thought that “Simple = Success.”

Our training coordinator did a fantastic job training the trainers who turned around and trained our front line staff. First we trained our district manager in one store for a full day, and then the district manager trained his general managers at each of their locations for one week. Once the general managers were trained, they took it from there and got the entire team on board within a pretty short window.

Paytronix: Your Rewards program has been operating for over a year now. What would you say is Papa Gino’s / D’Angelo biggest win?

Eagles: There are many mini-wins that have added up to two big wins. First, to understand how to motivate your guests to visit you more frequently and spend more with each visit, you first have to know who they are. With our program, we’re able to maintain a guest database.

Paytronix: Papa Gino’s uses deep segmentation models to create relevant offers and messages for its guests. Can you share a bit about why segmentation is so important to your program?

Eagles: We segment the data to determine our best guests and monitor how frequently they spend on a weekly basis. Without a loyalty program, how would we know? If you can get a 4 percent to 6 percent redemption rate on an email, that’s good.

The program has boosted visit frequency of even our super-heavy users or best customers. When a guest becomes a ‘heavy’ or ‘super-heavy’ user we don’t want to lose them, so we’ve adopted a special communication program tailored to a best guest’s behavior. And because we have identified these guests, if any of them stop coming in, we can contact them and ask what we can do to make things better.

Paytronix: How do you know the program is working?

Eagles: 74% of guests enrolled in the program have earned a reward. Plus, we’ve seen increases in frequency and spend at significant enough rates that we know the program works. We need to stay focused and continue to improve the way we segment, report and analyze the effectiveness of each campaign. The whole key is to maximize the return on every dollar we spend. With the Rewards program in place we now understand our guests and are able to maximize our marketing dollar return.

Using the program has enabled one-to-one communication with guests. We can communicate with guests based on how often they communicate with us. This is so much more effective than “blast” email marketing as each email can be tailored to each guest. We can analyze the statistical performance of every offer we send and over time build a repository of campaigns that work.

Paytronix: Thirty-five percent of your guests are now loyalty members. Is this about what you expected when you rolled out the program in December 2009?

Eagles: When we first rolled the program it was embraced by our guests more aggressively than we estimated. We had a planned a 20%-25% participation rate at the end of one year. We hit 35% and hope to be close to 50% at the end of year two.

Paytronix: Now that you have more than a year of the loyalty strategy behind you, what was your biggest surprise?

Eagles: Certainly participation is one surprise, but I would have to say how we have leveraged our Guest Database is another big surprise. We knew having a central repository of ticket level detail for each guest would be valuable for reporting, but we have applied the data to analyze other areas of the business or new programs in ways we that were never part of the original benefit sheets.