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Restaurant chains embrace tiered loyalty programs

Operators seek to boost visits and drive check averages by adding complexity to consumer rewards.
Photograph: Shutterstock

When it comes to rewarding their most loyal customers, more and more restaurant operators are trying a one-size-does-not-fit-all approach.

Big chains are making the switch to tiered loyalty programs as they seek the magic bullet to drive traffic and increase per-visit spend.

Consumers in recent years have become accustomed to earning redeemable points by purchasing through a brand’s app or, in some cases, presenting a loyalty card. But operators are adding a new level of complexity to their rewards programs.

Among the biggest chains slated to give loyal customers rewards options is Starbucks, which announced during last month’s earnings call that it’s slated to roll out a major change to its star-based reward system this spring.

It’s a move that’s likely to get some notice: The coffee giant has 15.1 million active Starbucks Rewards members, up 14% year over year.

“For the first time, customers will be able to redeem different amounts of stars for different products, giving them a choice to use stars sooner for lower ticket items or save for higher ticket items like lunch, packaged coffee and merchandise,” CEO Kevin Johnson said during the call with analysts.

A Starbucks spokeswoman declined to provide further details on the program.

Earlier this month, Chick-fil-A rolled out an updated app and a new tiered rewards system called Chick-fil-A One. The program builds on one first introduced in 2016. Under the new system, after spending as little as $15, the chain’s customers can begin redeeming points for rewards. They’ll need to spend $100 to be conferred silver-level status and $500 for top-tier, red status.

At base level, every dollar spent earns 10 points. At silver, it’s 11 points, and at red that goes up to 12 points for every dollar spent.  

“We learned that customers enjoyed the free food of the original rewards program, but they wanted greater transparency in how progress was earned and more choice over free food rewards,” Kaitlyn White, project lead for Chick-fil-A One, told Restaurant Business. “Moving to a more transparent, points-based system allows us to accomplish both, while providing an experience that is personalized to every guest.”

In a novel twist to the new program, silver and red members can gift their rewards to friends and family or donate a meal on behalf of a nonprofit organization.

Chick-fil-A communicated the change in rewards systems to customers through mobile app notifications and emails, White said.

The revamped app allows diners to see how many points they have and lets them choose whether to redeem them.

“The new program does not create operational change for any of our 2,300 restaurants across the country,” White said. “A key goal that factored into the overall design of the Chick-fil-A One membership program was to reduce complexity for our 120,000 team members.”

At Wayback Burgers, the rollout of a tiered rewards system coincided with the launch of a new app.

The fast-casual burger chain previously had a loyalty program that allowed customers to earn a point for every dollar spent. After accumulating 100 points, they’d earn $5 off. That reward is doubled for so-called Gold Members under the new program. What’s more, customers with fewer than 100 points (called Classic Members) will receive notice of double- and triple-point days each month, along with other visit-driving incentives.

With the previous program, “we didn’t see the frequency we should be getting,” Patrick Conlin, Wayback Burgers’ senior vice president, told Restaurant Business. “We wanted more frequency from current guests and to get new guests to download the app.”

It appears to be paying off: From July 10 to Aug. 20, the 135-unit chain has seen about 10,000 downloads of the new app, Conlin said. It’s too early to tell, though, whether the revamped loyalty program will drive traffic, he said.

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