Posts Tagged “qsr”

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. 

Before digital loyalty programs, restaurants had no real way of figuring out which visitors were likely to return. And, what’s worse, they had no way of effectively incentivizing visitors who could become loyal to return.

Today, identifying and nurturing potential loyal customers is more important than ever; people have a seemingly endless array of options when it comes to their meals. They can purchase ingredients at the grocery store to cook at home, or have ingredients delivered to their door using increasingly popular services like Blue Apron. For a quicker meal, they can buy pre-prepared hot food from supermarkets or convenience stores, order takeout, or go out to eat.

How can your restaurant compete?

The answer is as simple as it is challenging: Get customers to meet the four-visit milestone.

Obviously, you want people to visit, and to visit often. But your goals can be much more specific than that. Data shows that each visit increases the chance that a customer will visit again, effectively choosing you over your competitors.

With the second visit, […]