As loyalty programs move from ragged old punch cards to digital-based, customized offers, many restaurant brands are reworking their approach to get guests to return. Old Chicago, which has long cultivated devoted fans through its World Beer Tour program, is one such brand.
While Old Chicago will continue to reward customers for sipping through 110 brews from all over the globe, an updated loyalty program will be tested this fall. Plans are to have the program deployed systemwide in Q1 2014.
Ben Brown, vice president of Loyalty at parent company Craftworks, said the time is right for an update and wants a program that is more robust and individualized.
"Our (World Beer Tour) has been in place for a long time and it's very appealing for beer drinkers. But it excludes a lot of people who may not be beer drinkers or who come for the pizza/experience. We want to keep the tour, but grow the loyalty program so it has more appeal," he said. "It's been a strategic initiative for us for a long time and we just recently got it off the ground."
Because Old Chicago doesn't have a huge geographic footprint (less than 100 units in about 20 states), loyalty is a big focus, rather than mass media marketing.
Thus far, the company has picked its platform provider to move forward with the program (the provider is off the record until after the pilot concludes). Now, Old Chicago is working on the technology development phase to replicate its old program. Eventually, the goal is to get everything on one platform through the POS system (Aloha).
"I can say there will be a lot of technology upgrades. It will be easier to sign up, easier to participate and easier for servers/managers and bartenders to administrate. Now our restaurants have a POS terminal and also a Verifone terminal and it can be a slow process. We're going to move everything onto the POS so it's a one-stop shop for servers," Brown said.
Technology upgrades becoming an expectation
Simplicity joins necessity on the list of benefits when it comes to Old Chicago's loyalty advancements, as customers are coming to expect digital versus punch/plastic cards, Brown said.
"The restaurant industry is so competitive. Most companies now realize they have to have (a loyalty program), but to differentiate themselves in this industry, it has to be a great one. Brands have to up the ante," he said.
With the move to digital, and integration onto one platform, data metrics also become an advantage. Such information can be used to reward customers for ordering their favorites while simultaneously enticing them toward new occasions.
"Now you can associate customers' behavior to their purchases. That's where we're hoping to go with our program so we can eventually know every time a customer orders a pizza or a beer, and we can tie campaigns into that behavior," Brown said. "So if you have happy hour frequency, we can try and get you to come in for lunch because we know you like the brand enough to add those visits."
Rewarding vs. pestering
The pilot phase is important for Old Chicago to find that ideal frequency that rewards guests and doesn't pester them. The brand will use surveys and other feedback and will also monitor opt-out levels to find the balance. Brown said the rule of thumb is to reach out to customers no more than once a week.
"A good loyalty program should drive sales and ticket by itself. People who are being rewarded for something they'd purchase naturally tend to be more likely to grab another beer or dessert because they'll feel rewarded. We see this across our programs — the average check is higher for loyalty members," Brown said. "But creating new behaviors, like getting them to new daypart, needs to be done carefully. We don't want to risk spoiling that relationship by pestering. It has to be of value to them."
Email will remain the brand's prominent means of communication. The company will also look at texting down the road, and maybe even mobile payments. For now, however, the plan is to start small and prioritize needs and demands.
Old Chicago will market the new program through social media, email and in-store (its biggest channel). Staff training will also be a priority. Brown said training teams will be in place to teach employees how to communicate key benefits to guests, such as its simplicity.
Limited-service versus casual dining programs
As mobile ubiquity increases and loyalty remains a hot trend across the entire restaurant industry, Brown said such programs differ greatly for limited-service versus casual dining concepts.
At lower-check QSRs, for example, customers have a greater desire for discounts.
"Free food and dollars off are the biggest drivers of frequency," Brown said.
Conversely, at an establishment such as Old Chicago — or higher-check concepts — it becomes more about experience and connection to the brand.
"Our guests are here to be recognized and brand experience — maybe our waiter will call them by name and ask them if they want their favorite table that they always get," Brown added.
Because of mobility and Big Data, this is the path he sees loyalty taking in the future, across all segments.
"Loyalty is now personalized, specific and hopefully relevant," he said. "Dollars off is relevant, but experience has more impact and it doesn't cost anything more than effort."
The brand's long-standing World Beer Tour is a good example of this. Those who participate get their name on the wall and the program promote recognition, which drives value for guests.
"To make loyalty programs financially feasible, at some point, you can't just keep giving dollars off," Brown said. "This industry is competitive. We can't just keep beating each other up and out-discounting each other. We're going to have to focus more on things that are valuable, experiential."
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Alicia has been a professional journalist for 15 years. Her work with FastCasual.com, QSRweb.com and PizzaMarketplace.com has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, Consumerist.com and Franchise Asia magazine.