Last week MyMcDonald’s reward loyalty program launched nationally, another amongst the many in the fast food and coffee industry. The landscape is becoming littered with many loyalty programs, so it begs the question: Are they rewarding the already loyal customer or is it driving new guest traffic and increasing the cheque average?
For McDonald’s I would assume the overall goal is both, but one would think it should be the latter or why would they invest so much in a customer who already is loyal to the golden arches. Is the present McCustomer crossing the street to claim their Tims Rewards? Yes, there is the built-in component of customer insights and relevant data along with a mailing list to promote LTO’s and members only incentives. But with only 17% active membership in typical loyalty programs, does the income warrant the investment?
A few years ago, one of Stir’s foodservice customers had a very high customer attrition rate with independent operators due to the distributor sales rep who was not brand loyal, only bonus loyal. In order to reconnect with the customer, commence a one-to-one conversation and reduce conversion, Stir developed a custom rewards program from ground zero.
The platform was built with the independent operator in mind - easy to understand, easy to participate and easy to redeem. There was no extra paperwork or proof of purchase required which was a critical strategy to grow and maintain the membership. With bi-weekly incentives and easy to achieve rewards, not only did the attrition rate drop dramatically, but it also increased the variety and volume of the clients’ product listings.
In this case the rewards program was a success, but that was B2B, not sure the results are the same for B2C. Personally I have been a member of the Air Miles program from its inception, but I don’t recall crossing the road to fill up at Petro-Canada versus searching for a Shell. In fact, I don’t think it has influenced any of my purchase decisions [except perhaps an extra bottle of wine at the LCBO].
As a prior Marketing Director of two national casual dining chains, I truly understand the value of a loyal customer. They visit the store many times a month, they are a dedicated brand advocate, and, in some cases, they care about the brand so much they confide and provide some invaluable feedback.
In the restaurant business, I think what really drives loyalty is very simple-quality food, value for the dollar and a sincere effort and appreciation from every step of service.
They say it is a lot easier to keep an existing customer than gain a new one. So, what is the ultimate objective of a loyalty program? It is to claim and maintain your customer turf, to drive incremental customer traffic and sales or is it a mandatory “ME TOO” must have?
All thoughts and perspectives are welcome.
Scott Moore, President of Stir Creative Communication Inc., has been helping foodservice and hospitality suppliers and operators increase sales for over 30 years. For innovative and revenue-increasing programs, marketing and promotional campaigns and much more, contact Scott at 905-484-3094, scott@stircommunications.ca, or visit www.stircommunications.ca.