Andrew Robbins

QDOBA’s streamlined new rewards program is an example of how to build loyalty by offering guests a great customer experience and listening to what matters.

We know that a better customer experience does great things for a brand. Well-designed and executed loyalty programs, especially programs like this one, can have a substantial impact on visit frequency, incremental revenue, and overall customer lifetime value. Research conducted by Paytronix and PYMNTS found that 70% of quick-service and fast-casual patrons take advantage of loyalty programs offered by several restaurants they purchase from frequently, and 64% of customers use loyalty programs at multiple restaurants from which they frequently purchase.

But it’s also true that what works today cannot work forever, so it’s important to have a technology platform in place that offers flexibility, and a team that knows how to take full advantage of a platform.

QDOBA is a long-time Paytronix partner, with a very successful loyalty program. But we are always looking for ways to increase revenue and to make the entire experience better. Working with the Paytronix Data Insights team, QDOBA took a deep dive into the data, asking questions of both active and lapsed users to understand how they interact with the brand, what they love, and what they want.

Guests made a few things clear. They loved the food and they loved earning rewards that got them free meals, but they wanted it to be easier. In short, easy redemption and relevant, compelling rewards are key to strong member engagement.

The result is a simplified program that offers a fast path to rewards which increases visit frequency and boosts customer acquisition.

It’s this kind of work that creates a thoughtful program that keeps the customer front and center.

A big congratulations to Peet’s Coffee, which just launched its new loyalty program on the Paytronix Platform. Peet’s is a longtime Paytronix client and we prize our collaborative and creative relationship that helps push the boundaries of guest engagement programs.

The latest version of Peetnik Rewards is about giving customers more flexibility in how they earn and spend their rewards, as well as getting customers rewards faster. While Peet’s based its previous rewards on visits, this new program focuses instead on automatic and bankable points based on spend. When you add to that the ability for the customer to choose how and when they want to receive their reward, you have a program that lets customers tailor the benefits of the loyalty program to their personal purchasing behavior.

This kind of project doesn’t happen without a number of technologies working closely together, which is why we’re so proud that Peet’s approached Paytronix from the very start. Loyalty is one pillar of a comprehensive system that includes a custom-designed mobile app, online ordering system and POS. It’s the loyalty program that makes it possible for a person to earn points through an online order, and then spend those by redeeming points for alternative milks or espresso shots to lattes, or ordering signature breakfast items, beverages or beans.

Bankable points programs continue to increase in popularity in part because they’re so easy to understand. In our annual Loyalty Report, we found that while bankable points programs account for just 31% of all core programs, they grew tremendously in 2020, largely because of the flexibility the programs offer to customers.

We’re eager to see how this program grows over the coming months and years and look forward to our continued relationship with such an iconic coffee brand. Download the Peet’s app here.

Remaining competitive in the digital space means leveraging data to boost your business at every opportunity. You might be surprised to learn just how much actionable information is at your fingertips if you know how to mine the data available to you.  

For the convenience store operator looking to stand out from the competition, data can answer some key questions: Who is your competition, and how can you overcome their strategies to own the customer? 

I recently had the chance to address a wonderful crowd at the Outlook Leadership Conference about this very issue. 

Who is your competition? 

Calculating how to best compete begins with knowing who you are competing against. You can start by putting yourself in the place of the customer along the customer journey. A customer has a need and undertakes a search to fill it. The search can be a neighborhood walk, a driving search or, increasingly, an online search.​ 

Not long ago I tried this myself. I looked on Yelp for fuel near me and found 10 locations – but a closer look revealed only four competitors since many carry the same flag. Similarly, a search for coffee brought up 86 locations. And a broader search for food gave me a whopping 130 locations within two miles – and when I switched over to Doordash and Grubhub another 36 locations showed up that weren’t on Yelp.  

But wait. Why do DoorDash and Grubhub have listings that aren’t on Yelp? Well, some of those are “ghost kitchens.” This is a term that’s cropped up a lot lately and one that is having a major impact on any company dealing with delivery. I discovered two brands I had never seen before Guy Fieri’s flavortown kitchen and Mr. Beast Burger. It turns out they are virtual brands where you can only buy their food through delivery services (no dine-in) and the food is prepared in the kitchen of a well-known Italian chain Bertucci’s.   

Three types of Ghost Kitchens are currently flourishing: Virtual brands like Guy Fieri’s; restaurants that are growing into new regional markets and trying out new brands; and third-party aggregators themselves, like DoorDash and Uber Eats. This means you have actually been battling for customers against competitors you couldn’t even see unless you went looking in your phone. That kind of competition calls for a significant digital strategy on your part. 

How can you compete? 

How can any brand compete on the delivery marketplaces when there are 166 listings within a 2 mile radius?  What will it take to get to the top of search listings? It seems some brands are stacking the deck with ghost kitchens so they show up if you search for “Italian,” or “chicken” or “burgers.” This seems like a daunting task for any brand. What makes more sense is to change the rules to a game that is easier to understand, control and measure; you should own the customer. 

How can you own the customer? 

Now you know who you are competing with – and everyone is in a fight to own the customer. Fortunately, the data behind the most successful brands tells us their secrets.  

• Anchor with a Strong Loyalty Program. Adhere to the key design principles of loyalty programs. Keep the program simple. Make it easy to enroll and easy to understand the program, track your points, and see daily deals and limited time offers. This will give you the insight and information you need to create the programs that keep customers coming back.  
• Hone Your Ordering Strategy. Implement first-party ordering​ with a website and mobile app – but use third-party aggregators for delivery and customer acquisition​. A first-party system gives you complete control while also enabling you to keep the customer information. Also important is to offer a choice of fulfillment. Today’s customers expect the option to choose from takeout, curbside, or delivery.  
• Make Payment Easy. Ensure a painless payment process whether your customer is in person, visiting your online store, or ordering via mobile app. Leveraging Apple Pay and Google Payments (which is currently fee-free) can mean high conversion rates, speedy checkouts, and few errors. You also want to integrate your loyalty program with ordering so people can easily earn and redeem rewards. 
• Personalize through Artificial Intelligence​. AI can do incredible things, when used properly. We focus on what we call AI to IA^sm, that is, using artificial intelligence to drive individual action. It can help you target the best times for reaching out and recapturing lapsed customers and can even predict a lapse before it happens. It can help you identify the best day of the week for offers and discounts – without compromising profits or traffic. And it can tailor campaigns to your individual guests based on their behavior.  

Today’s marketplace is a double-edged sword – the pressure on businesses to compete with data and tech is higher than ever, but emerging tools are giving you the means to do so.  

Do you have questions about how you can better leverage data to benefit your business? Paytronix would love to hear from you. Get in touch today. 

With the announcement that McDonald’s will launch its first loyalty program nationwide in July, one of the world’s top brands has indicated that the shift to digital relationships between restaurants and their guests is accelerating. What’s more, it’s making a commitment to collecting zero-party and first-party data, something that all brands will find increasingly important as the landscape changes around data usage and data privacy.   

Just as e-commerce companies like Amazon have long provided personalized experiences by getting to know their customers, McDonald’s aims to do just that by understanding each customer to keep them both engaged and loyal. That is, encouraging their guests to come back time and time again.  

Of course, the bottom line is the bottom line, and loyalty programs are proven methods for delivering real value, something any of our more than 500 clients can tell you. Loyalty customers deliver larger checks and more frequent visits, but the true value lies in the customer insights. McDonald’s is about to learn the same lessons that companies like Jimmy John’s, Panera Bread, and Papa Murphy’s put into practice every day.  

 The real goal is in getting to know their own customers well enough to motivate guest behavior through AI-driven personalized offers. In the QSR world, which is dominated by low prices and razor-thin margins, brands must understand these motivations and make adjustments without giving away product unnecessarily. This means using artificial intelligence to create personalized, relevant engagement that drives individual action. Some of our clients have seen great success by using AI to predict guest behavior and fashioning the next best offer that generates incremental activity. 

 All of this is only possible if brands like McDonald’s can capture the same zero-party and first-party data that an e-commerce company can grab through a digital property like a website. This means leaning into digital ordering, which is something that consumers are primed to do. Research we conducted with PYMNTS indicated that in 2020, 63% of the $769 billion that consumers spent on restaurants last year was on takeout, and 89% of that spend happened through digital channels. One layer deeper, we found that customers who belong to loyalty programs spend twice as much as non-members.  

 To this end, tying the loyalty program to the mobile app is a key part of the overall strategy. When we surveyed restaurant patrons, 92% of vaccinated restaurant customers who shifted to online ordering during the pandemic told us that they plan to continue ordering this way, even now that restaurants in the US have mostly reopened. 

 With everything centered on the mobile phone, McDonald’s next step could be in creating more digital experiences that make it easier and faster to sign up and use loyalty, even for those who don’t have the app. We’ve helped some of our clients integrate with NFC payments through Apple Pay and Google Wallet so that when a customer taps to pay on their mobile device they can gain or use rewards, or even sign up for the program, right from their phone.  These digital experiences are super easy for the guest and greatly increase program enrollment and engagement. 

 I believe McDonald’s will use loyalty to accomplish what all of our clients do: increase visits, increase spend, and make visiting a habit for their guests, ultimately, boosting the top line to add to the bottom line.