Restaurant leaders from IHOP, Potbelly, The European Pizza Firm and vPromos spoke about what makes their loyalty applications tick on the Restaurant Franchising and Innovation Summit.
Loyalty applications are a dime a dozen today, with eating places seemingly tripping over themselves to supply prospects rewards. However for each Starbucks, with its passionate fanbase and astronomically profitable rewards program, there are numerous others that fail to seize buyer curiosity.
A panel dialogue on the Restaurant Franchising and Innovation Summit held in March in Kansas Metropolis aimed to crack the code, dissecting what makes a loyalty program really partaking and what pitfalls to keep away from. Restaurant business specialists delved into the secrets and techniques behind constructing a program that fosters buyer loyalty, not simply one other forgotten app notification.
The summit, run by Networld Media Group, attracts executives from main manufacturers to share profitable methods to construct and handle eating places. Networld Media Group is the father or mother firm of Fastcasual, Pizza Market and QSRweb. Its subsequent foodservice occasion is the Quick Informal Government Summit being held October 13-15 in Denver, Colorado.
The skilled recommendation was shared in a breakout session referred to as “Why Your Loyalty Program Is not Working,” a panel moderated by Stacey Kane, a fractional chief advertising and marketing officer who works with a number of manufacturers. Audio system for the occasion included Nathan Casey, VP of digital advertising and marketing, engagement and experiences at IHOP; David Daniels, SVP and CMO at Potbelly; Tommi Tervanen, CEO of The European Pizza Firm and Peter Vogel, chief income officer for vPromos.
Working loyalty applications
Casey mentioned IHOP has seen good success with the launch of its loyalty program. “The visitor response was simply implausible,” he mentioned. “We had great progress type of proper off the bat, and we’re seeing that enhance and spend. We’re seeing that enhance in transactions that you’d count on from a loyalty program.”
Kane mentioned IHOP is a legacy model and requested why the model launched its first program simply two years in the past. Casey mentioned his business has been altering considerably over latest years and except Starbucks and Domino’s, the restaurant business was reluctant to embrace loyalty for a very long time. Simply earlier than the COVID-19 pandemic, QSRs started launching loyalty applications in droves.
Casey mentioned the explanation he believes extra eating places have embraced loyalty applications lately is advertising and marketing associated. With the decline of linear tv and an aggregated viewers, manufacturers want extra methods to succeed in prospects. Second, manufacturers began to see the advantages of data-driven advertising and marketing and understanding buying conduct.
“It is a strategy to get your friends to self-identify themselves any time that they are making a purchase order so as to begin that relationship together with your friends so you’ve that direct advertising and marketing channel to them and, second, you perceive their conduct over time,” he mentioned.
Tervanen mentioned The European Pizza Firm believed eating places should not launch loyalty applications except they perceive what the customers’ views of loyalty applications are. A examine by Merkle discovered that 56% of customers first take into account the product they’re receiving, whereas solely 20% take into accounts a restaurant’s loyalty program when ordering.
The European Pizza Firm, based mostly in Finland, bought 10% of the inhabitants — 20% of the households — to hitch its loyalty program in simply two years.
“The wonderful truth is that our loyalty members are on on-line orders near 70% now,” Tervanen mentioned. “And of the whole firm income, it is 38%. Buyer lifetime worth is about 180 euros ($192.42). … That is fascinating when you possibly can calculate the mathematics (of the) buyer lifetime worth divided by the shopper acquisition price. After which you possibly can direct your advertising and marketing marketing campaign enhance.”
The model’s frequency doubled from three to 6 instances a yr.
Personalization
Daniels mentioned personalization is necessary to Potbelly’s loyalty program. The model has salad, sandwich and soup customers, so there is not a “one-size-fits-all” loyalty resolution for his prospects.
“If I am a salad buyer, I do not desire a sandwich. I see no worth in sandwich affords,” Daniels mentioned. “So as to have the ability to generate the most effective worth proposition, I feel personalization is vital. … If all you are getting are sandwich affords and you are a salad client, it is as if we do not know who you might be and we do not know something about you.”
With customized affords based mostly on menu knowledge and buyer conduct, “we see exponentially increased charges of engagement,” Daniels added, “each supply redemption and customer frequency.”
Vogel’s model, vLoyalty, mentioned the premise of what his firm affords relies on automation, which helps each the service provider and the shopper. When paying, if a buyer hasn’t been to the restaurant earlier than and a bank card is just not acknowledged on the terminal, friends are given the choice to hitch the loyalty program proper on the spot and begin incomes rewards that day.
“From that time ahead, each time the particular person pays, they’re tracked mechanically, the factors are recorded, and we even go so far as to automate the rewards,” Vogel mentioned.
Signing up
Kane mentioned she struggles along with her manufacturers getting prospects to obtain one more app. She requested the panelists what they do to encourage signups of the panelists’ loyalty applications.
Daniels mentioned Potbelly has Potbelly Perks promotions that the model advertises which are solely accessible for loyalty prospects. “By promoting them throughout our whole nationwide media marketing campaign, you are figuring out No.1, it is a horny supply, so there is a hook there (and) there is a worth proposition within the supply, and it is enticing sufficient to say ‘hey, if the one manner that I can entry that’s both obtain the app or be a part of the loyalty program, I am prepared to try this.'”
Potbelly affords a free authentic sandwich to get folks to enroll in the loyalty program, however the model additionally has an underground menu that may solely be accessed by the app.
Casey mentioned IHOP’s groups should be excited in regards to the loyalty applications to make it work. “They should be purchased in. They should see the worth in it, they usually should see the worth in providing it to the visitor. Most of our workers like giving added worth to the friends, making them pleased making it a constructive expertise, so working with (workers) to make them enthusiastic about it (and) about providing this system is a large factor.”
IHOP additionally permits prospects to pay their payments from their telephones by way of the app. Casey agreed that having a sign-up bonus is crucial.