Loyalty Trends 2024: Loyalty Gets Personal

Key Takeaway: Making loyalty programs personal helps operators maximize customer lifetime value with experiences. 

People want brands that know their needs. Smart restaurant and convenience store operators understand this. They have started to use personalized loyalty programs.   

The National Restaurant Association’s (NRA) State of the Restaurant Industry 2024 report says guests join 3.6 restaurant loyalty programs. Gen Z adults lead with 4.4 loyalty programs: 

People want to go places that give them personal treatment. 

The NRA report shows that 78% of loyalty program members are more likely to visit a restaurant where they can earn points. And 81% say they’d join another loyalty program if it was offered. 

Loyalty programs help you connect with your guests in a personal way. In February 2024, Starbucks Rewards made news by seeing a record 34.3 million active U.S. members. And they plan to make it even more personal.

“We talk a lot about our personalization capabilities at Starbucks, but truly that job is never done because as new technologies and capabilities come online, we are grabbing those and integrating them into our system,” Brady Brewer, SVP and CMO. 

Things Must Be Personal  

Loyalty program membership grew 19% from 2021 to 2023 (Paytronix 2023 Loyalty Report). That means there is more competition.  

PwC’s Customer Loyalty Executive Survey 2023 showed that the top reason customers stay loyal is because “the experience feels personal and created just for them.” This is what people expect. 

To get the most from their customer loyalty software, operators must get personal. Successful loyalty programs need tools that create:

• Customer groups 

• Connection

• Brand loyalty  

Here’s what that looks like: 

1. Groups 

Loyalty programs need rewards that fit the brand and match what your customers want. 

This could mean:

• Monthly subscriptions  

• Meal passes

• Early access to new menu items

• Celebrating birthdays

2. Emotional Connection 

Use purchase histories and loyalty program measurements to make personal loyalty communications and offers.

Examples include:

• Wishing members a happy anniversary with a BOGO deal 

• Welcoming members back from vacation with a coupon for their favorite drink  

• Thanking members by donating to a local cause
  

3. Brand Loyalty

When guests feel known, their brand loyalty grows. 

The 2023 Paytronix Loyalty Report shows that the top 10% of loyalty members make up more than 40% of all loyalty visits and about half of all spending.

Using a guest engagement platform to get data is a must. This allows for more personal offers. 

Personalization must include:

• Customers likes

• Location

• Purchase history

Success Story: Peet’s Coffee  

When Peet’s Coffee relaunched Peetnik Rewards on the Paytronix platform, membership increased 350%. Loyalty grew by 47%, and a single offer made more than 1.5% of retail comp sales. 

"With Paytronix, Peet’s tests and measures everything with control groups and we talk with our team about how best to structure offers,” says Lisa Regelman, Director of Loyalty at Peet’s. “We can see how frequently customers come in and what they like to buy, and then target campaigns in a more one-to-one manner.” 

Personalization Needs Planning

Many customers are getting personalized offers. They will switch brands for a better loyalty. That means personalization is a must in 2024. 

Consumers want to get rewards in many ways. That includes: 

• Subscription models

• Points 

• Games

• Experiences

Loyalty programs must change and be more personal. 

Only 44% of people say the offers they get are relevant says the PYMNTS Intelligence report.

It goes on to say that 83% of consumers want personal messages. Half would change programs for more personal offers. 

Creating a personal program needs to match your brand identity and target audience.

Every part of your loyalty program should be personal. Use your brand's specialness to make you stand out. 

A fast casual brand could use a points system where members earn and cash in for:

• Free food 

• Merchandise

• Experiences

A coffee chain could use a subscription model for unlimited beverages.

Convenience stores can get more loyalty program signups with fuel rewards. 

You need a flexible program architecture that allows you to: 

• Test 

• Measure

• Optimize

• Personalize

See what other loyalty programs are doing. Write down the pros and cons. Think about:

• The best ways to connect with certain guests 
• Creating a structure that allows for promotions 
• Making sure it is easy to use 
• Finding the best ROI 
• How to get data 

Every loyalty program needs these three things 

Once you're program is started, you can add other things that:

• Add depth 

• Create more engagement

• Boost customer lifetime value

Success Story: Smashburger  

Smashburger wanted to grow. Smashburger® used loyalty data and Paytronix’s AI tools to create personal marketing campaigns.  

Smashburger used Paytronix to “micro-segment” its customers to give them rewards based on what they like.  Successful promotions included:

• A veggie burger offer for guests who don’t consume beef 
• A free order of fries for trying a new menu item  
• Double and triple points for Gold and Platinum members 
• Birthday rewards 
• Triple points for ordering online 

The new program created a:

• 20% lift in spend  

• 16% lift in visits

• 61x ROI

“Offers are tied to core behavior so that guests get what they love,” says Lexi Ryan, the burger chain’s Loyalty Manager. “We want them to make their experience personal.” 

Data Helps Make Things Personal 

To give your customers more value, you need more data about them. 

First-party data is a must. This includes:

• Purchase histories

• Visit frequencies 

• Spend levels 

• Marketing responses

• Points balances

• Reward redemptions 

• Other engagement

This data shows guests’:

• Preferences 

• Purchase drivers 

• Value potential

Third-party data can give you more info about their:

• Likes  

• Interests

• Lifestyles 

Location data shows their routines. Demographic data can provide info about their household. 

Together, the data helps you understand your customer. 

For example, a customer's weekly burrito visits and interest in vegan promotions could help you give them more messages about vegan options. 

A family's weekend pizza orders can help you send them bundled meal deals. 

Lunchtime regulars at sandwich shops could receive prompts to try new seasonal sandwich specials. 

Data can help operators achieve: 

• Better offers 
• Better experiences   
• Higher engagement 
• More conversions  
• More customer lifetime value 

The PYMNTS Intelligence report says, “Tools that can parse through large volumes of consumer data to identify patterns, preferences, and behaviors will prove to be critical for merchants looking to create more precise and relevant marketing campaigns.”

Success Story: Dutch Bros Coffee® 

A coffee chain in a market with a lot of national brands, Dutch Bros made its first digital loyalty program during the pandemic.

The company used the Paytronix customer experience platform to replace its previous punch-card system. It gained 1.4 million members in the first month. 
 
The Dutch Bros program uses a points-based system where customers can:

• Earn rewards

• Win contests

• Get Dutch Bros experiences

Paytronix data and AI and machine learning technology helped them get new business and also won back more than 220,000 inactive loyalty members. 

“We needed a partner with a platform that provided capabilities that we were able to tap into for custom features like app stickers and hookups,” says Anne Schultheis, Director of Loyalty. “The Paytronix platform allows the digital experience to be truly ‘Dutch’.” 

Branded Mobile Apps Deliver a Connected Loyalty Experience 

In today's mobile-centric world, developing a branded mobile app gives operators the opportunity to deliver an integrated loyalty experience.

According to the NRA, 60% of current loyalty program members prefer to access their programs through a mobile app, underscoring the desire for a frictionless and on-the-go loyalty experience.

These apps include loyalty program benefits for guests, including:

• Tracking and redeeming points

• Managing automated gift card and digital gift card balances  

• Receiving location-based push notifications

By investing in a well-designed, feature-rich mobile app, operators can take their loyalty program to new heights and meet the evolving needs of younger guests. A branded app not only streamlines the loyalty experience but also serves as a direct communication channel, enabling:

• Outreach

• Easy location check-in

• Personal offers

• Real-time engagement 

All of these are pivotal elements in cultivating long-lasting brand affinity and loyalty. 

In the past, branded mobile apps were expensive and difficult to manage, often requiring custom development to make simple changes like updating images or offers.

Platforms now offer feature-rich, customizable mobile applications that can be deployed quickly and easily maintained. These apps offer a central place for guests to manage:

• Loyalty points

• Messaging

• Check-in 

• Payments 

• Online ordering

Personalization Success Story: Alltown Fresh®  

Alltown Fresh is a unique concept that combines a handcrafted kitchen and market with fuel sales. Looking for a guest engagement platform that would match its brand promise, Alltown Fresh chose Paytronix to launch its online ordering and delivery service, a new guest loyalty program called Fresh with Benefits™, and a mobile app.  

By addressing behavior and intent, the brand dramatically improved customer engagement, driving lifetime value. Mobile and online orders quickly became a key part of overall sales. 

“The ability to custom-order your sandwich, smoothie, or salad—and use the same app to fuel your car and pay without touching the PIN pad—is a game changer,” says Joanna Linder, Alltown Fresh’s Vice President of Marketing. 

Elevating Guest Engagement Through Personalized Loyalty Strategies 

Operators who recognize the need to adapt to evolving consumer expectations must prioritize launching or revamping their loyalty programs with immense personalization in 2024.  

A good loyalty program can increase customer engagement and support broader goals. These may include:

• Strengthening brand equity 

• Driving customer lifetime value  

• Using data to improve and grow

The key to success lies in partnering with a provider that can ensure seamless alignment among your loyalty initiative, overarching business strategy, and long-term objectives. 

To learn more about how Paytronix can help you develop a hyper-personalized loyalty program that fosters meaningful guest relationships and delivers tangible business impact, download our loyalty development guides for restaurants and convenience stores or request a demo now.