QSR brands must go beyond their product itself and offer more in return for customers’ loyalty. But what is causing the failure of these programmes? Get comfortable and discover the rise and fall of restaurant loyalty programmes, and how you can overcome the challenges of engagement drop off and retention loss.
What is a restaurant loyalty programme?
Put simply a loyalty programme is a value exchange between a business and their customers in return for customer loyalty. This could be in the form of exclusive discounts, points-based freebies, rewards and more. Loyalty programmes have changed a lot over the years, nowadays incorporated into the digital landscape, allowing for easier access on the customers’ behalf, and better insights on the businesses’.
With more and more QSR’s popping up, the saturation of the market has made it more difficult for restaurants to retain repeat customers in the same way.
Most QSR loyalty programmes are delivered through digital apps, scannable at the counter or order kiosks. They tend to be a digital version of stamp cards, which enable users to collect a free item after X amount of visits. Or they offer discounted items exclusively for members. Sometimes the programmes are a combination of discounts and freebies, all racked up through the collection of points.
This is what we call ‘earn and burn’. This model is characterised by its fast implementation, convenience for brands to implement and ease of use for customers. However, when used with low-value rewards (such as discounts), or setting the target too high are common pitfalls of this type of programme.
What are the benefits?
The obvious one; increased loyalty. Loyalty is important for brands because customer acquisition is more costly than retention. At TLC, we are loyalty experts. If you want to discover bespoke loyalty strategies for your brand, contact lets.talk@tlcworldwide.com.
Stand out from your competition. The better your programme, the more appealing your brand will be to customers on the fence. With quick-service food, its often about a snap decision. Often these restaurants exist in close proximity to one another and there can be little thought in the decision between fried chicken and burgers. So having a memorable, stand out programme that builds long-term positive brand connections is important in beating the competition.
So, why are programmes failing?
Most QSR loyalty programmes are not optimised for long-term loyalty. Points-based and monetary transactions alone no longer have the pull to keep customers interested. While most QSR loyalty programmes offer free food and/or discounts, this is only enough to keep customers loyal to a certain point. This is when brands experience the drop-off.
Key reasons for disengagement:
- It takes too long to earn points
- Rewards are not relevant or personal
- No variation in rewards
- Programme itself is uninteresting
A common model of these programmes is racking up points to get a free dish, then back to square one. Rinse and repeat. It’s boring and repetitive. And rewarding people for eating your food with more of your food can be somewhat one-dimensional.
So what are the alternatives?
Solutions to Optimise your Programme
Engaging and retaining customers over a longer period of time requires variation, nuance and personalisation.
Rewards:
Starting with the basics, a loyalty programme should have strategic, valuable and varied rewards. More variation will keep customers coming back to try new things, and hook a wider audience through different offerings.
That’s why at TLC, we have 8 rewards categories with thousands of offerings, as well as curated brand partnerships. Our rewards offerings include:
Wellness: Looking after mind, body and soul. Whether your customers need to work off that meal, or simply need to relax. Our nationwide venues and online experiences deliver total wellness from sports to mindfulness and everything in between.
Entertainment: A takeaway and a movie or dinner before a live event. Entertainment rewards are the perfect pairing for your restaurant’s loyalty programme.
Activities: Fun for every age bracket. We’ve got thousands of activity venues up and down the nation from zoos to museums, adventure parks to heritage parks. There’s no better way to reward a diverse audience.
Services: A world of experts to help make life easier! Cleaning, animal training & grooming, laundry care, home & garden tasks and car services. Your customers love convenience, and now you’re giving them even more.
Travel: Planes, trains, automobiles, hotels, resorts, campsites and glamp sites. Every incentive to staycations or discover the world. For the adventurers among your customers, travel is one of our highest value, highest impact rewards.
Learning: Discovering passions and empowering personal development. Arts, sports, music, dance, upskilling, languages and edutainment. Your convenience gives customers the time they need to explore their new skills.
Shopping: Whether its vouchers for their favourite shop, or bespoke gifts, we’ve got the shopping experience your customers want.
Find out more about our reward categories here.
Games, competitions, prize overlays
Introduce elements of fun and excitement by offering games, competitions, and prize draws. This approach keeps members engaged and eager to participate over longer periods of time. Rewarding customers with prizes for their engagement encourages them to continue interacting with your brand. By using a personal touch to deliver these (such as member anniversaries), QSR can benefit even more.
Tiers
Reward customers on a tiered basis to make them feel even more important, and to give them a goal to work towards. By earning more points, customers can move up and down the tiers, being rewarded with even better benefits as they climb. This not only motivates them to spend more, but it’ll help to retain members as they feel valued by you with sense of exclusivity in this elite club.
Data and personalisation
Using customer data to personalise offers and create relevant rewards that resonate with individual preferences is essential in creating an effective programme. This tailored approach can significantly enhance customer satisfaction and engagement. At TLC we use our proprietary customer data to determine the most impactful rewards and mechanics.
Digital delivery
Ensuring the programme is user friendly and straightforward is a priority as it’ll uphold user satisfaction. Delivering rewards through fun mechanics like games and competitions can significantly boost engagement.
A combination is key
In order to succeed, a loyalty programme should include all of these elements, creating a varied experience that keeps users excited and waiting for the next step.
Programmes that work
To create a successful loyalty programme, start by defining your primary goals and understanding your audience’s motivations. Consider the rewards that will be most appealing to your target demographic and tailor your program accordingly. A successful programme should not only increase customer retention but also drive new customer acquisition by making your brand more attractive in a competitive market
How to make it work for you
Ask yourself the following questions to create a successful loyalty program:
- What are your primary goals?
- What key insights do you have about your audience and what motivates them?
- Which rewards should you offer to best engage your customers?
TLC case studies
McDonald’s Monopoly
Continuing McDonald’s successful Monopoly campaign in Australia and New Zealand, participants had a 1 in 5 chance to win through instant Win or Collect and Win tickets. Since 2012, TLC have helped to deliver 30 million prizes to McDonald’s customers.
This has been an extremely successful campaign for McDonald’s and was previously repeated multiple times.
McDonald’s Big Days
Post-pandemic, we implemented this rewards campaign to uplift and get customers active and having real-world fun, reinforcing McDonald’s brand positioning in Portugal as the ‘true brand of happiness’. Exploring the cultural heritage of Portugal, we created a digital calendar that surprised customers with rewards daily.
This grew sales by around 12.7% and surpassed the sales share goal in the 2nd week!
Hungry Jacks Uno
To create an engaging campaign that stood out against competitors’ efforts, Hungry Jacks in Australia produced an iconic TLC campaign. Together with Mattel, we created an exciting prize pool wrapped in a game of Uno. One in four plays instantly won a prize from cars, home entertainment systems, fuel-cards, fridges, laptops, barbecues and more.
This promotion exceeded the clients’ goals and delivered incremental sales with ROI of 18.7%, over 250k rewards redeemed and social reach 38% higher than before the promotion began.
Burger King and Spartoo
Burger King needed a campaign to compete with McDonald’s Monopoly in France, and we delivered. Focusing on driving sales for their Kool King menu, generate traffic and encouraging repeat visits, we created the Spartoo campaign, offering a voucher with each purchase from the Kool King menu.
We sold over half a million meals during the promotional period.
Pizza Hut – The Hut Game
To drive sales and repeat business, as well as strengthening Pizza Hut’s brand positioning, we created the Hut Game. Customers were given a gaming card through which they could redeem free experiences, as well as entering weekly draws for mega prizes. This was the first ever gaming campaign by Pizza Hut and it was a huge success, generating positive customer engagement.
KFC Colonel’s Inheritance
This nationwide campaign in Thailand had a reward for everyone including a shopping experience, gaming, travel, home appliances and much more. We incorporated a grand prize draw to win anything from KFC vouchers to a Toyota Yaris! This resulted in 80,000 participation entries.
The Future of QSR Loyalty Programmes
As technology continues to advance, the future of QSR loyalty programmes looks promising. Here are a few trends that are likely to shape the next generation of loyalty initiatives:
Integration with Mobile Payments
Integrating loyalty programmes with mobile payment systems can streamline the customer experience. Customers can earn and redeem rewards seamlessly during the payment process, making the programme more convenient and user-friendly.
Enhanced Personalisation with AI
Artificial intelligence can take personalisation to the next level. By analysing customer data, AI can predict preferences and behaviours, enabling brands to offer highly targeted and relevant rewards. This level of personalisation can significantly boost engagement and loyalty.
Gamification
Gamification elements, such as challenges, leader boards, and badges, can make loyalty programmes more interactive and enjoyable. These elements tap into customers’ competitive instincts and can drive increased participation and engagement.
Sustainability and Social Responsibility Initiatives
As consumers become more environmentally conscious, incorporating sustainability into loyalty programmes can resonate with customers. Offering rewards related to eco-friendly products or charitable donations can enhance brand perception and loyalty.
We can help you
Our strategy team is dedicated to exclusive consumer research and insight-led growth strategies to boost brands’ engagement, acquisition and retention. Aside from 30 years of rewards based data, we have current trending insights that’ll help you to optimise your loyalty programme. From helping you to determine which rewards will be most impactful, to supporting with delivery, speak to us today to get started.
