CHICAGO – Loyalty innovation is speeding up as inflation erodes the strength of the consumer dollar, prompting some diners to trade down. At the National Restaurant Association show this weekend, brands highlighted a variety of plans to improve their rewards programs — from digital tokens to palm-scanning payment tools — and strengthen customer retention.
“Over the past three years every major QSR has launched a loyalty program,” said Nathan Casey, IHOP’s VP of digital marketing, engagement and experiences, during an NRA education session. “After years and decades of being resistant to loyalty programs, it happened all at once. Because the restaurant industry is finally going through the same digital disruption that every other industry has gone through.
The attractiveness of the traditional points-for-dollar model is waning as menu prices climb, increasing the discounts offered by such programs. Starbucks, Dunkin’ and TGI Fridays are among chains that recently raised redemption costs on core menu items to protect margins from overdiscounting, but such changes risk damaging relationships with customers who Have become addicted to the existing rewards.
At the show, experts and operators from across the industry discussed this tightrope walk and how loyalty is changing to meet modern customer demands.
Courtesy of Wow Bao
Tier and NFT
Bao Bao has introduced a Superfan tier in its Bao Bucks loyalty program called the Hot Buns Club, which costs $99 annually. Unlike other loyalty tiers, WOW BAO comes with NFT as the signatory of the membership.
Casey said such digital tokens could be valuable to an audience that is already interested in NFTs, or to brands that want to bolster their loyalty programs or add collectibles. Still, it’s unclear how many consumers would be willing to pay that amount for a digital trading card.
Given the negative publicity associated with NFTs — which are speculative assets sometimes used to defraud consumers, according to the Manhattan District Attorney’s Office — Wow Bao is calling its digital tokens “Collectabaos,” CEO Geoff Alexander said. he said.
“We are staying away from the NFT title. The crypto space and NFTs have taken on a negative connotation over the past 12 months,” Alexander said. “We like to focus on creating a collectible, we want it to be something that you can own.”
Token is a unique digital membership card for the loyalty program. According to a press release announcing the launch of the program emailed to Restaurant Dive, CollectBaos grant holders will receive 10% off WowBao.com orders, 10% off merchandise, double Bao Bucks points and free food, among other perks. with.
For Wah Bao, CollectBaos is a way to connect with diners and explore NFT technology before some competitors.
“It’s allowing us to help shape and define that space,” Alexander said. “And if you fast forward to 24 months or 36 months, when other people start entering space, we’ll be well ahead of them.”
The future of NFTs, or similar digital collectibles, is far from fixed, Casey said in his education session in response to a question from Restaurant Dive. Starbucks has also offered NFTs, which it calls stamps, to certain loyalty customers, entitling them to perks. CoinDesk reported that an initial edition of 2,000 such tickets, each priced at $100, sold out in about 20 minutes in March.
“It’s not going to be relevant to everyone,” Casey said. “Nothing is gained by pouring in technology for technology’s sake… I have yet to see great use cases for NFTs,” Casey said.
Palm scanning to receive and pay rewards
Biometric payments are becoming another technological addition to loyalty programs, Jason Templeman, director of Amazon Web Services, and George Hanson, chief digital officer at Panera, said in an education session.
The technology is faster than other payment and loyalty identification methods, and more reliably identifies customers, Templeman said, since a palm cannot be stolen or lost like a phone or credit card.
Panera and Amazon One recently partnered to bring Amazon One’s palm screening technology to some Panera Cafes, integrated with Panera’s 52 million-member loyalty program.
Customers can use their palms to pay for and access their loyalty rewards, eliminating the possibility that customers or employees may enter the wrong phone number to seek customer loyalty information.
“You take the stress away from the associate, take the stress away from the guest, and it’s just simpler,” Hanson said. Panera deployed palm scanners at two cafes in March, and the company is pleased with the results.
Key performance indicators, Hanson said, are utilization, registrations for Amazon One, new MyPanera registrations and speed, among others. Hanson said the palm scanner made it easier for customers to register.
“It’s shortening the order time. It’s increasing the accuracy of that loyalty identification, and it’s enabling the associate to confidently deliver a personalized experience to that guest,” Hanson said.
Modernized rewards offerings can help foster loyalty in an increasingly digital landscape, but a personal touch, whether through technology or hospitality, is still important.
“I don’t think most people care that much about $5 off certificates,” Danny Meyer, chairman of Union Square Hospitality Group, said during the NRA keynote. Meyer said that customers are less interested in transactional relationships than in hospitality, such as points for dollars.
Loyalty, Casey said, is a reciprocal relationship between the customer and the restaurant. Experts said that this relationship becomes stronger as a result of privatization. Hanson said technology can help with that personalization by delivering benefits to specific customers.
“It can provide them a really quick way to reorder their favorites,” Hanson said. “Or it could be a personalized recommendation based on their past orders.”
To that end, Panera updated its loyalty program in September to offer more personalized options for guests to redeem rewards while striking a balance between a “surprise and delight” model and a points-for-dollar model.
According to Jesse Li, general manager of Qing Xiang Yuan Dumplings, focusing on staff and customer interactions rather than specific amenities in the loyalty program can also deepen relationships with diners.
Lee has found that customers appreciate the simple things most, like when servers remember their names, past orders, or how long it’s been at the restaurant. The most important part of building a community of customers, Lee said, is to treat them like friends.