As restaurants look to move their loyalty programs into the future, they are increasingly finding that earn and burn loyalty programs aren’t enough to stand out in today’s ever more competitive market.
To drive participation, McDonald’s is offering in-app concert streams, Chipotle is giving away badges and other achievement awards, and other major brands are ramping up their loyalty programs with similar unique features and offers.
Sweetgreen’s fast casual chain, for example, at the end of last month announced the launch of a beta tester of its loyalty, rewards and challenges program, in which members complete tasks (for example, spend $20 or add a side item) to redeem offers (for example, get $4 credit or a free drink).
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Daniel Schlossmann, Chief Digital Officer, explained in an interview with PYMNTS that customizing the loyalty experience for each user is key to the program’s future success.
“It really brings a personal style with this rewards and challenges feature to where we can turn that experience into gaming,” he said. “As we release these different features, we test, iterate, talk to customers, understand how they interact with them, and we believe that they will eventually be able to bring them together into something… created for each individual customer rather than something that might have been just a cookie cutter. Like our old program.”
In the first quarter of 2021, the brand ended its Earning and Early Earning program, citing pandemic difficulties as one of the reasons in the FAQ section of the company’s website. This new iteration would be “better for Sweetgreen’s bottom line,” Schlossmann said, because the brand is “investing in the right territories and the right customers.”
for each one of them
Many consumers now interact with restaurant rewards programs each month, according to data from the March/April issue of PYMNTS’ Digital Divide series, “The Digital Divide: Regional Differences in U.S. Food Ordering Trends and Digital Adoption,” which was created in collaboration with the programs – As a Service (SaaS) Paytronix Customer Experience Management Solution Provider. The study, which drew from a survey of more than 2,500 adults in the United States in February, found that about one in three restaurant customers have used the loyalty program in the past 30 days.
Schlossmann said “cookie-cutter” programs have become so popular because “it’s actually not that hard, depending on your tech group” to incorporate the earn-and-burn offerings into the restaurant app. As such, simply having a loyalty program is no longer a competitive advantage.
On the contrary, he said, “the best restaurants and retail companies who truly understand who their customers are” are looking to create a program that offers a “more personal approach.”
This current iteration aims to increase each individual’s intelligence over time. With the initial launch of the program, all users see the same offers, but over time, the brand intends to start “aggregating app users” so it can “target a specific offer ‘to each person’ based on the type of customer,” Schlossmann said.
At the beginning of the year, Sweetgreen launched a test subscription program, Sweetpass, which offered one $3 credit per purchase (no more than one per day) for 30 days for a one-time $10 fee.
Subscriptions can go a long way toward increasing loyalty. PYMNTS research found that restaurant subscribers are more loyal to the brand than non-subscribers, according to data from the February/March issue of the PYMNTS/Paytronix Digital Divide study, “The Digital Divide: Restaurant Subscribers and Loyalty Programs.”
Read more: Four out of 10 consumers are open to subscription services in restaurants
The report noted that eight out of 10 subscribers are “extremely” or “extremely” loyal to their favorite restaurants, while about half of those indifferent about restaurant subscriptions said the same. In addition, 17% of consumers not currently participating in restaurant programs reported being “very” or “extremely” interested in having a restaurant subscription service.
Schlossmann said the subscription model is particularly effective for a restaurant like Sweetgreen, which serves “you can eat all day” meals rather than working in a relaxing space.
He noted that the offer not only boosted the loyalty of customers who already bought frequently, but also those who have not been active for a while and new customers.
“We saw that no matter what kind of client I was, I came back a lot in that period,” he said.
These digital upgrades also affect the restaurants’ physical stores. Schlossmann noted that two-thirds of the brand’s sales are digital, and that the chain is “making investments on the physical side to bolster those digital investments,” including the upcoming opening of a digital-only ordering site and an order-in front-line drive-thru.
“It’s not just about building digital to enhance physical,” he emphasized. “You have to build the physical as well to make this digital experience work.”