Article

5 mistakes you're making with your loyalty platform

By carefully vetting loyalty strategies and course correcting to improve results, fast casuals can effectively interact with customers and create experiences that are truly memorable.

March 1, 2016

By Michela Baxter, Senior Director of Loyalty, HelloWorld

On the surface, loyalty programs seem simple to implement and easy to maintain, but there are many ways that brands can go wrong, from overpricing awards catalogues to failing to personalize offers. In fact, American households are enrolled in an average 29 loyalty programs but are only active in 12, demonstrating a need for brands to take a closer look at their loyalty strategies and determine how to enhance offerings. Ultimately, the winners in loyalty will be those who create strategies that do not just collect frequent buyer points, but dial back to broader brand promises, providing specific value to customers.

Here are five common mistakes fast casuals are making within loyalty programs — and what they can do to make the grade.

Don’t ignore analytics

Between POS systems and detailed social analytics, fast casuals have unprecedented access to consumer data. Despite these insights, however, many brands are letting valuable information collect dust. Segmenting and targeting consumer data is the best way to make a program feel really personalized. If a customer indicates they’re gluten free, for example, you wouldn’t want to offer them a coupon for a standard muffin. It’s important brands play of consumers’ existing behavior instead and provide relevant offers to motivate experiences.

Fast casuals should test email CRM with consumers by targeting specific offers and analyzing how their communications are being opened, viewed and click through to better optimize future campaigns. Similarly, mobile CRM can be improved by customizing the preferred restaurant location for each customer profile, allowing brands to target specific offers to a customer’s location of choice to make outreach more relevant.

Brands that integrate data-driven insights throughout loyalty strategies can surpass the boundaries of traditional programs and use analytics to hone their understanding of consumers and tailor offerings based on specific needs and preferences.

2. Don’t rule out partnerships

Since the emergence of Plenti, coalition loyalty programs have risen in popularity. These multi-company shopper rewards programs allow consumers to earn currency across brands, accelerating the time it takes to earn a reward and streamlining the experience to a single card. The consumer can then redeem their points for a variety of rewards and discounts. These programs are beneficial to brands because participants share in the operational structure, marketing and financials for the program. This January, Chilli’s became the latest Plenti partner, representing the casual dining space alongside brands like AT&T, Macy’s and ExxonMobil.

However, while coalition loyalty is good for some brands, not all companies can be participants due to strict non-compete restrictions. Those considering joining a coalition loyalty program should gauge if existing partners align with their consumers; if you’re targeting the same demographic as Macy’s, for example, joining a program can give your brand additional — and meaningful —  traction. National brands brands also have an advantage when it comes to coalition, as it wouldn’t make sense for a regional brand to attract consumers in areas beyond its reach. And if a coalition program isn’t right for you, think about incorporating other partners into your brand-owned program to expand reach and provide added benefits,

3. Don’t overprice rewards

Rewards catalogues are traditionally the most prominent part of loyalty programs. Just as prominent, however, is the belief that valuable prizes take too long to achieve. To encourage brand engagement and spur repeat purchases, brands must rethink how to price rewards items. Good awards are attainable and aspirational; consumers that feel a reward takes too long to earn often refrain from participating. Many fast casual programs have  thresholds where the next entree or beverage is free so customers have a set goal they’re working for.

Friday’s Give Me More Stripes program rewards customers a "stripe" for every dollar spent. Once a customer earns enough stripes, they can redeem them for rewards certificates, which vary in price and allow customers to feel valued no matter how many points they’ve garnered. In addition to earning points, members also receive free food, exclusive offers, a "jump the line" pass and complimentary desserts in their birthday month. These efforts not only elevate the loyalty experience, but bolster the relationship between a consumer and a brand.

4. Don’t limit what loyalty means

Loyalty isn’t just thanking a customer for their patronage — in fact, it stretches far beyond rewarding a purchase. Forward-thinking brands should utilize mobile engagement to enhance the time a consumer spends with a brand both in-store and out. Pizza Hut recently tested interactive touchscreen tables, which allow guests to customize every detail of their order, from the size of the pie to topping distribution. Customers are also able to use the table to play games as they await their order and pay via mobile wallet.

Mellow Mushroom’s mobile app, karMMA, serves as a loyalty program in addition to offering users a digital menu, restaurant locator, nutritional information and mobile game. karMMa users are also invited to scan their receipts via QR technology to receive points redeemable for complimentary dishes or Mellow Mushroom merchandise. When it comes to loyalty strategies, mobile should be a primary focus of fast casuals. That way, customers have increased accessibility to brands; restaurants lacking experiences will miss out on moments to strengthen customer relationships.

5. Don’t over-exert yourself

Though loyalty provides fast casuals a breadth of opportunity, it’s important for brands to think strategically about programs and employ features that provide the most value to fans. Though it’s tempting to adopt emerging technology, brands should start small, test and re-test efforts and then let programs grow organically. By carefully vetting loyalty strategies and course correcting to improve results, fast casuals can effectively interact with customers and create experiences that are truly memorable.