Every consumer has different habits and preferences when it comes to shopping. For some consumers, brand loyalty is a top priority for them. They intentionally shop and search for specific products or brands. For other shoppers, they may not make a conscious effort to be loyal to a brand; they may just have a routine when it comes to shopping for products and brands that they don’t want to stray from. Some customers may not even care about the brand they choose to buy from, only looking at affordability and effectiveness.
Regardless of these types of consumers, their loyalty is key to running a successful business. In our previous article, we touched upon how loyalty programs and a mobile app can boost your company in terms of profitability, and a key factor to this growth is through customer loyalty. Engaging with your customers to grow a relationship with them is one of the first steps of retaining their satisfaction with your business.
In this article, we break down four businesses that have created a loyalty program that has successfully grown their customer base and allegiance, ultimately boosting their brand and surpassing competition.
Starbucks’ rewards program, called MyStarbucks Rewards, has been a major part of their success in growing as a QSR. Their app is simple to use for their customers, and in turn consists of 19.3 million members as of October, 2020. Due to the convenience of their app and how easy it is to navigate, mobile payments and orders make up around 7 percent of total Starbucks orders in the U.S.
This coffee company has exceeded their competition because they value customer experience. They’re able to align their business goals to the loyalty program without sacrificing the needs of their customers. With this prioritization, Starbucks is able to generate nearly 50% of their revenue through their mobile app. So, how have they managed to capitalize on customer loyalty through their program?
Through their app, they’re able to deliver offers to their customers that are individually customized to create a personalized ordering experience. By taking data from a customer’s orders, whether it’s through in-store or the app, they’re able to compile information based on that consumer’s preferences and tailor rewards specifically to them. Everytime a customer orders from the app, they’re offered an incentive to return back to Starbucks for another drink, such as collecting more points to cash in for a prize. They earn “stars” with each order, and once they have enough stars, the customer can turn them in to be rewarded with a free drink or merchandise.
Starbucks has utilized their mobile app in a way that guarantees customer satisfaction, which helps them to retain customer loyalty.
Chick-fil-a has taken a more unique approach when it comes to attracting loyal customers. They use an “invitation-only” loyalty model that only gives their loyal customers exclusive rewards. Though this tactic is challenging because they’re executing their program based solely on behavior and delivering engagement, these limitations are what makes them stand out from their competitors. This chicken chain managed to make more money than rivals, such as Taco Bell, Burger King, and Wendy’s, that have more than twice as many locations across America.
Their program uses a points system that depends on a tier system. For example, a member would earn 10 points for every dollar spent, but a silver member would earn 11 points and a red member would earn 12 points. The way they capture customer loyalty is also based on strategic limitations. With a restricted delivery radius and not operating on Sundays, they focus on quality and connecting with their consumers, even with the risk of limiting their reach. In their case, this technique drove up demands. Chick-fil-a’s niche approach to retaining customer loyalty has ultimately worked out for them; it shows that taking risks is necessary, but is eventually successful when you have the right priorities.
Panera Bread’s loyalty program is card-based, called MyPanera, which makes sense because they deal with more in-store orders. Though they do have a mobile ordering app, using a card-based system is a smart and effective way to capture customer loyalty in their business. Like all other loyalty programs, they offer rewards to their customers, but not just discounts and personalized offers. Along with free food and bakery items, their rewards include unique prizes, such as invitations to special events and recipe books.
Their program MyPanera has 21 million active members, an incredible number when it comes to loyal customers. Studies have shown that 30% of millennials prefer earning points based on the money they spend at quick-serves. So by implementing a rewards program that’s based on in-person spending, Panera bread has taken a different approach compared to other QSRs. Their strategy has led to around 50% of company transactions occurring on MyPanera cards.
Panera has smartly observed their customers’ ordering habits and have used that information to create a loyalty program that outsmarts their competitors.
Domino’s implements a loyalty program, called Piece of the Pie, that is simple yet effective. Like Starbucks, they employ their mobile app as a way to reach customers and gather information and data that can create a personalized ordering experience for them. With each order, consumers are incentivized to return to Domino’s for their next pizza craving. For example, for every order worth at least $10, they receive 10 points. Once the member has accumulated 60 points, they can receive a free medium two-topping pizza. And who doesn’t love free pizza?
This technique isn’t uncommon, but it still helps drive repeat purchases and increases customer engagement. To stand out from their competition, Domino’s hosts regular contests and giveaways that are available to loyalty members. These rewards range from shares of company stock to round-trip tickets to anywhere in the US. They’ve even released a mobile game that loyalty customers can play to earn points. If a customer can finish all six unique levels, they can unlock bonus points and get a free pizza when they place their next qualifying order.
Domino’s hasn’t strayed from a traditional way of retaining loyal customers. However, by including special features within their program, they stand out from their pizza competitors.
Each of the four companies have strategized their loyalty program in a unique way that works well for their business. In order to do so, they had to understand their customers. This means knowing the demographics, habits, preferences, etc. to their consumers.
Finding out this information and using it to create a stable foundation for customer loyalty takes time and effort. However, investing in this type of research and technology is well worth it in the long run. Prioritizing customer satisfaction and building that relationship with your audience will only boost your business and exceed your competition.