Are your numbers for loyalty penetration and new member enrollment declining? Is there evidence that you are over-discounting customers? Does your program conflict with your corporate strategic objectives? If you answered “yes” to any of these questions, it may be time to consider a program redesign.
Product offerings change, concepts evolve, and priorities shift. To get the most from your loyalty program, make sure that it always aligns with your corporate strategic objectives. If your program doesn’t reflect what your brand represents, it isn’t benefiting the organization as well as it should.
J.P. Licks, a 17-unit Boston-based ice cream concept, came to the realization that its loyalty program no longer fit its price structure and corporate priorities. Before the redesign, members were required to accumulate 50 points to earn $5 off. Among the benefits was getting a free sundae on their birthday and on the anniversary of joining. The company also wanted to promote its fresh-roasted coffee at the time of the program launch, so registration included a free coffee.
After a while, it became apparent that the program was vulnerable to fraud. People were opening new accounts to receive free coffee because no stipulations were in place to prevent it. Cards were being activated and then never used, leading to a skewed view of membership and member activity. Additionally, price increases over time meant that members were achieving rewards much faster than was originally intended.
Deciding that it was time for a change, J.P. Licks shifted its program to a three-tiered structure. At registration, members now start with 10 bonus points instead of a free coffee. They get $2 off after earning 30 points and need to visit three times before being eligible for a free birthday reward.
Under the new tiered structure, members are incentivized to advance to higher tiers because the size of the birthday reward increases and there are opportunities to earn bonus points on certain days. Meanwhile, the anniversary sundae has been replaced by other events throughout the year. By rewarding members based on which level they are at, J.P. Licks has been better able to determine whether a reward is simply viewed as a thank-you or could be used to motivate behavior.
Just over one year into the new program, J.P. Licks has been able to significantly reduce the number of inactive memberships. It has also increased the overall level of interaction, including reengaging lapsed members and getting them excited about the loyalty program.
To learn more about this program redesign, check out J.P. Licks marketing manager Rachel Klein in our on-demand webinar, “Spotlight Series: Revamping Your Program.”
Visit challenges are a great way to boost sales and increase customer engagement while motivating guests to dine more frequently. With the help of machine learning, this marketing technique has evolved from using the same challenge for all guests or even segments of guests to fine-tuning both the number of visits required and the timeline for completion. The approach has been shown to engage more customers without increasing discounts or cannibalizing sales.
HuHot Mongolian Grill, a 65-unit all-you-can-eat stir fry concept, had run simpler versions of visit challenges in the past. The members of its loyalty program were assigned different visit requirements based on the bands they belonged to, and the promotion would last for two weeks. But the results left considerable room for improvement.
One-to-one visit challenges enabled HuHot to vary two different parameters. Backed by computer algorithms, the company determined the proper time frame and number of visits to use for each guest. Some were given less time to complete the challenge, such as visiting twice within a week, while others needed to make six visits in a month. Considering visit history is often key in motivating guests to make that one additional visit.
The results of the one-to-one visit challenges exceeded expectations. Compared to the simplified version, HuHot saw a 69% increase in overall lift. It can be difficult to motivate more visits from those who are already frequent guests, but HuHot realized a 22% sales lift and a 21% visit lift for guests in the platinum band alone. Since sales had been flat for this group in previous visit challenges, the one-to-one approach proved capable of moving the needle for even high-frequency guests.
To hear more about the success that HuHot Mongolian Grill has had with its one-to-one visit challenges, check out senior director of digital Monica Minford in this on-demand webinar, “Spotlight Series: One-to-One Visit Challenges.”
When Popeyes launched a new chicken sandwich earlier this month, its locations were flooded with large crowds of people eager to give it a try. Interest in the new offering was also fueled by social media, as the Twitter accounts of several rival QSR chains and their respective fans chimed in. With so much buzz, Popeyes sold out of its chicken sandwich across the country.
It seems that most of the discussions about the best chicken sandwich have led back to one place: Chick-fil-A. Billing itself as the “Home of the Original Chicken Sandwich,” Chick-fil-A has been pleasing customers for over 50 years. And a significant factor in its sustained success is a loyalty program.
With such a loyal following already in place, some may think that rewarding guests who were going to come in anyway just cannibalizes profits. The key is to reward those who might not have visited without an offer, moving
your restaurant from a possible option to the preferred choice. Chick-fil-A’s loyalty program is a tiered one that converts casual visitors into loyal guests in the first tier and provides exclusive member benefits in the later tiers.
Members of the program earn points for every dollar spent, including on catering and mobile orders. Using the app, points can be redeemed for rewards that range from a cookie (150 points) to a salad (1,500 points). Members also occasionally receive additional rewards loaded onto their account by their local Chick-fil-A location.
The benefits increase as members advance from the entry tier to silver or red status. In the silver tier, they can gift rewards to friends and family or donate a meal to charity through the chain’s partner, Feeding Children Everywhere. After earning 5,000 points in a year, members join the red tier and enjoy even more exclusive benefits, such as two tickets to the Chick-fil-A College Football Hall of Fame or six tickets for a Chick-fil-A Backstage Tour.
Having a loyalty program has helped Chick-fil-A cultivate a strong base of repeat customers and brand advocates. If there’s a poll to determine the best chicken sandwich, it can encourage participation by sending out push notifications to its most loyal fans. And when another brand makes a splash with a new chicken sandwich offering, these fans will be among the first to say, “It’s good … but it’s no Chick-fil-A.”
To learn more about how a loyalty program can provide impact for your business, call Paytronix at 617-649-3300, ext. 5, or request a demo today.
In the age of Big Data, having a wealth of information can be both a blessing and a curse. There are a lot of valuable insights to gain, but you need a team with the right skillset to determine what is important and apply it to the creation of effective campaigns as well as your overall marketing strategy. Since no solution is going to work for every brand, taking a deep dive and developing a customized approach will always yield the best results.
Here are three data-backed tools that you should consider implementing to engage customers and increase sales:
- Subscriptions: Falling under the larger umbrella of stored-value payment, subscriptions are a growing trend. Some brands choose to let their customers load prepaid meals onto an account, which is not much different than preloading cash to spend. In both cases, when guests store value on a card or in an account that’s linked to a loyalty program, visits and spend typically increase. Prepaid meal passes have sometimes resulted in incremental spend being boosted by up to 80%. When stored value is paired with auto-reload features, it can produce additional benefits like a 15% increase in weekly visits.
- Artificial Intelligence: More than a hip term, AI is a tool that is helping marketers determine the most impactful ways to reach their guests at a reasonable cost. Taking individualization beyond bands and segments allows marketers to optimize promotions and maximize their ROI. One-to-one visit challenges that offer rewards based on individual guest behavior have generated remarkable results. One such challenge saw the number of visits increase 10.5% across all guests and almost 28% among those who were already visiting somewhat regularly. Choosing the right promotion can entice more visits and spend from even your best guests.
- Segmentation and Predictive Scoring: Targeting guests by likelihood to take actions can further refine any marketing strategy. Whether guests are inclined to visit once a week or once a year, you can craft promotions that will work for each segment. Thoughtfully structured campaigns typically drive a 15-25% increase in visit frequency and prompt behavior changes like visiting at a different time of day, spending more, and trying new products. Predictive models can also be used to identify segments that are likely to visit without receiving an offer, helping you avoid cannibalization.
In the hands of the right data insights team, these tools will motivate increased visits and spend, which ultimately leads to improved top-line sales. To learn more about building a successful loyalty program, download “Target Low-Frequency Guests. Here’s Why.”