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Deep Dive: How Omnichannel Loyalty Programs Can Boost Brands’ Business

July 22, 2020 at 12:45PM

Loyalty programs have long helped companies build consumer trust and encourage repeat business, and many are now allowing customers to engage with brands across channels. Recent surveys show tailored omnichannel loyalty programs are eclipsing more traditional offerings that simply provide perks or rewards based on purchases or visits to brick-and-mortar establishments. 

These omnichannel programs enable restaurants to interact with customers in stores or on social media, and consumers can receive incentives to purchase certain items or to post favorable reviews that friends might see. Brands must ensure these programs operate seamlessly across channels, however, lest their promotions or rewards fall flat. 

More consumers are shifting to digital purchasing during the COVID-19 pandemic, and even those who are shopping in stores have begun using contactless payments at checkout. Recent PYMNTS research has revealed an almost fivefold increase since March 6 in customers’ use of restaurant aggregators as a substitute to eating in their favorite restaurants. This illustrates that eateries interested in rolling out loyalty programs must consider the channels consumers are using now as well as those they are likely to turn to in the future. 

Loyalty Programs Go Digital 

The recent digital shift coincides with an uptick in omnichannel loyalty programs as consumers rely more and more on emerging technologies and many use smart cards to pay for meals and receive rewards. Quick-service restaurant (QSR) chain KFC has enabled contactless “smile-to-pay” facial recognition capabilities at more than 300 locations, for example, and such offerings can help restaurants simultaneously offer convenience and boost brand identity. These programs are especially important as businesses seek innovative ways to ensure that their customers will keep coming back long after the pandemic is over. 

QSRs are developing innovative loyalty initiatives to draw customers to their stores. Multinational coffee giant Dunkin’, known for its heavy foot traffic, has reduced wait times for customers enrolled in its loyalty initiative, for example. Loyalty program members who use the Dunkin’ app can place orders ahead of time and pick them up upon arrival. App users also acquire points for purchases, receiving a free drink once they reach 200 points. Such simple service prioritization methods can add value for customers while costing restaurants relatively little. 

Barbecue restaurant chain Famous Dave’s is also leveraging a loyalty offering that meets users across multiple channels. Customers who download the QSR’s mobile app receive a one-time offer for a free burger, and every dollar spent thereafter gives them one “Bone.” Users who reach 100 Bones can elect to receive $10 off their next orders. The offering also allows users who have placed orders to arrive at restaurant locations and have their apps scanned, enabling employees to automatically pair them with their tickets. Famous Dave’s reported that its mobile app initiatives have resulted in increased volumes of off-premises orders during the pandemic. 

QSR Chick-fil-A, meanwhile, is promoting a tiered approach to loyalty. Guests can earn 10 points for every dollar spent, and these can be redeemed for menu items, birthday specials and more. Those who reach 1,000 points within a year qualify for a Silver Membership, which entitles them to 11 points per dollar and allows them to use points to gift meals to family and friends. Users who receive 5,000 points in one year reach the top-tier Red Membership, which comes with early access to upcoming menu items and other rewards. Loyalty programs such as these can encourage customers to engage with store brands and repeat visits while developing lasting relationships. 

Data-Driven Insights

Omnichannel loyalty programs, especially those that emphasize digital offerings, can also help restaurants collect valuable data on consumers’ buying patterns. They can aid QSRs’ demographics analysis to learn more about repeat customers as well as identify new ones with statistical profiles that match those of longstanding guests. Even apps that customers download to keep track of menu favorites or play games provide information, and pooling all these details can give QSRs insights and guide their decisions. 

Tim Ridgely, head of order and delivery at customer engagement platform Paytronix, recently told PYMNTS that when the COVID-19 pandemic hit, restaurateurs made massive overnight shifts to leverage and extend their loyalty and rewards programs to consumers. The first phase of this move entailed adapting loyalty programs to take stock of customers’ concerns about minimizing physical interactions during the health crisis. This has required eateries to revamp their approaches to target digital channels as more consumers order food online. 

Omnichannel loyalty programs give brands opportunities to reassure customers that their needs will be met regardless of the channels through which they interact. The challenge for QSRs will be to find more ways to add value to dining experiences so that customers will want to return even after the pandemic ends.

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