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 Ryan Zink, Senior Vice President of Finance for Fox and Hound Restaurant Group

Marketing, operations, finance, and IT are Paytronix's four areas of focus, and in this interview, Ryan Zink of Fox and Hound brings both the financial and IT perspectives to the table in discussing the restaurant chain's successful loyalty program.

 

Ryan Zink, Senior Vice President - Finance for Fox and Hound Restaurant Group shares his thoughts on the chain's loyalty club

Marketing, operations, finance, and IT are Paytronix's four areas of focus, and in this interview, Ryan Zink of Fox and Hound brings both the financial and IT perspectives to the table in discussing the restaurant chain's successful loyalty program.

Paytronix: Tell me a bit about the Fox and Hound Restaurant Group (FHRG).  How many units does the brand have, what type of concept, and what are the brands that operate under the parent company?

Zink: ZinkWe operate two brands under the 83-unit Fox and Hound Restaurant Group: Fox and Hound and Bailey's Sports Grille. Both concepts offer high-quality food, drinks, and entertainment -- in short, Sports, Spirits, and Fun. Each location has lots of large flat-screen, projection screens -- so that everybody has a great view of the game. Most stores have 2-3 distinct rooms so that customers can select between viewing several sports broadcasts with sound. The ability to customize the environment in each different room is a competitive advantage. Two-thirds of our revenue is generated from the bar area -- 60% beverage, 35% food, and 5% other sales, such as cover charges, rental of pool tables, and vending revenue.

We also have a sister company, Champps Entertainment, that owns and operates restaurants under the Champps Brand. Champps is the Ultimate Sports Bar, featuring made-from-scratch food, many high-definition TVs so that every seat in the restaurant has a view of multiple TVs, and a large island bar for social gathering. We like to think of it as the Best Seat Outside the Stadium. Champps' revenue mix is tilted the other way -- roughly 70% food. We operate the concepts separately but both share many of the same shared services, including financial and technology support.

Paytronix: In 2009, FHRG launched its All Star Brew Club, a dollars-for-points loyalty program. How many members do you have today?

Zink: We've activated 800,000 member cards. About 600,000 guests have registered their cards. Many of those are lost cards that have been subsequently replaced; some were cards that were activated but the members chose not to provide is with valid information. We consider about 1/3 of those who have registered to be active. By 'active' we mean they've visited one of our restaurants within the past 90 days. We would like to see a higher percentage of active users. Our frequency goal is at least one visit per month, while our most active guests visit weekly.

Paytronix: How do you compel more than 6,000 members per store to join your program? 

Zink: We designed a program that was appealing to our guests. As a sports-oriented concept, our unit managers are generally intested in sports, are competitive, and love to keep score. Understanding the competitive nature of our team, we publish the 'new member' stats in rank order from top performing to weakest performing stores. No one wants to be at the bottom of that list. So, on a store-by-store basis, management develops motivation for the staff to compel customers to join.  

Paytronix: You are planning on rolling out the loyalty program to your Champps brand in July of this year. Right now you have 150,000 subscribers in your Champps eclub, Official Fan Club, why would you try to convert them to loyalty club members?

Zink: We recognize the tremendous value in understanding guest purchasing behavior. There are really three reasons we want to roll out loyalty across all of our Champps locations:

  • Our All Star Brew Club gives our very loyal guest a great value and reason to return. The loyalty program harmonizes with our sports concept. Similar to my comments about our managers, our guests also like to keep score as they might in a game. The program lets them track their points and track their progress toward rewards.
  • By linking a user to their transaction history, the loyalty program becomes more of a CRM tool than just a loyalty program. We leverage the data was collect to drive visits more directly by creating relevant messages for individuals or segments. In one case, for example, we segmented members based on how recently they visited. We had three segments: visited within 30 days, 31 - 60 days, and 61 - 90 days. Our objective was to get the member to come in again sooner, rather than later. For each segment level we offered an increasingly rich offer. The 90-day segment received a BOGO offer while the 30-day segment received a dollar off. With our email club, we don't have the data we would need to run this type of promotion.
  • Also important, but not our top priority is the help the loyalty program provides in minimizing coupon fraud. It gives us more control over discounting. Special offers are placed on a member's account and once the offer has been redeemed, it cannot be redeemed multiple times.

Paytronix: How does your organization measure the success of the All Star Brew Club?

Zink: Typically we set goals for the year. Our goal last year was to boost sales generated from loyalty members to 20% of total sales. We came up a bit short at 16%. We also focused on growing our activated card base to al least 700,000. We nailed that goal. We also look at total revenue growth from the program on a year-over-year basis. Sales attributed to the program in 2011 increased by about 50% compared with 2010. Going back to frequency, we want to see an increase in the percentage of active users - we would like to see a majority of our members use us at least monthly.

This year we are doing a deep-dive analysis of the program and will likely make some substantial changes to the program. We just completed a research study with our existing members to better understand their impressions of the program. We asked our guests questions about how they would like to use the program and the types of rewards they would value the most. We are in the process of evaluating the results and have already begun designing the next evolution of the program based on that analysis.

We will also be renaming the program to All Star Club to appeal to a broader range of guests.

Paytronix: What were your biggest fears from a technical standpoint in rolling out the All Star Brew Club to all of your locations?

Zink: I don't remember any major technical concerns. We had worked with Paytronix for over a year at that point and even after such a short period of time had used some of its loyalty capabilities for some short-term campaigns at Fox and Hound and with our Champps brand, so we know they could deliver for us. Plus, our in-house technology team has a number of good problem solvers on board. That isn't to say we did not have hurdles to jump over. We recognized that because of state legislation, we would need to have multiple reward structures to maximize the performance of the program. We wanted to ensure that the rewards and offers were as consistent as possible across the system while allowing for variation to comply with individual state rules. Paytronix's experience with its MICROS 3700 integration enabled them to find a good solution for us.

Paytronix: How to you see the All Star Club contributing to the success of Fox and Hound Restaurant Group in the future?

Zink: I see the program continuing to help us understand our guests and using that information to drive sales. We will further be able to segment our messaging and deliver offers that are relevant to guests based on their specific preferences. Further, as we refine the program to give it even broader appeal, we anticipate growing our membership base beyond one million members by the end of 2012.