Customer loyalty programs have been a go-to restaurant marketing strategy for decades. Over the past few years, we’ve seen a clear shift from the simplest paper stamp and plastic cards to elaborate data-rich rewards programs, increasingly reliant on new technology.
Nowadays, you can find some kind of a rewards program at almost all successful restaurant concepts, from single-venue restaurants to large multinational chains.
Not surprisingly, it is the market leaders who set the loyalty trends. We looked at five of the most successful companies to give you an overview of what they do and why they do it.
1. Costa Coffee’s new loyalty scheme Costa Club
Voted the ‘Nation’s Favourite coffee shop in UK’ 10 years in a row, it is safe to say that Costa Coffee is UK’s love brand. And not only that – it is also the largest coffeehouse chain in the country, and the second largest in the world, right after Starbucks.
Just recently, in fall 2021, their already popular loyalty scheme underwent some major changes. Swapping the points scheme (£1 spent = 5 pts) for “beans” collection (1 drink purchased = 1 bean) was perhaps the most obvious step. Though well intended, the change initially brought a wave of negative feedback from a number of customers, perhaps due to its poor communication. However, it did not stop the company’s loyal base from growing. The club has attracted more than 6 million active users to date.
According to the company spokesman this change was a well-thought-out step based on Costa customers’ feedback. They wanted a simpler and faster way to earn rewards for their purchases and Costa listened. They now let the users enjoy every 8th coffee free or even 4th when using a reusable cup to support green movement. For example, to get a free medium latte (£3.30), they had to spend approximately £66/330 points, while now it takes only about £27/8 beans.
Even though you can no longer redeem any food items for your points, the drink offering got much more appealing as there’s no need to pay extra points for milk or milk alternatives, syrups, cream etc. In addition, customers get complimentary cake on their birthday and special rewards and discounts throughout the year.
The new model also focuses on moving away from plastic cards and includes features like ordering ahead with in-store pick up, contactless ordering, and others.
2. Chipotle Rewards
COVID-19 has been hard on restaurant business around the world. Even in such severe economic downturn, some companies managed to gain advantage and Chipotle was definitely one of them. During the pandemic time alone, the favorite Mexican food brand more than doubled its loyalty club members to whopping 24 million customers. Online orders marked almost 3x growth year over year, now accounting to almost half of the total sales (46%).
Such an impressive digital penetration is coinciding with the recent loyalty program revamp. While the original program introduced in 2019 allowed its members to redeem points for free entrees only, the upgraded version widened the reward selection with more than 15 different categories – including food, drinks merchandise or supporting social causes – thus giving even the veteran customer new options to explore.
To make the customer retention program even more engaging, the company added two gamification elements – a retro video game called “Race to Rewards Exchange” and new “Extras” feature. The longer the player manages to avoid obstacles (like artificial flavors), the more loyalty points they get. Aside from virtual rewards, players can also win a grand prize – real-life Tesla model 3.
3. Starbucks Rewards
What would be the first brand that pops into your mind when we say global coffee chain with world-class customer experience? Starbucks would most likely make it to your top ten list, wouldn’t it? It really is no wonder a company with such a brand recognition has built up a base of almost 23 million loyal followers.
Having hopped on the digitalisation wagon early (already in 2009), Starbucks’ app serves more than the loyalty purpose. Actually, it is considered one of the most popular mobile payment apps, surpassing even huge players like Google Pay and Samsung Pay. According to Insider Intelligence, in 2021 it was the second most used mobile payment app for point-of-sale transactions in the US, losing only to Apple Pay.
The loyalty mechanism of the app is pretty simple and straightforward. It uses a hybrid of a basic points system, and a tiered structure that comprises of two levels: Green and Gold. Green Level gives a customer access to a free birthday drink, free in-store refills, member-only offers, deals, etc. A golden member gets something extra: 2 stars for every $1 spent and the opportunity to redeem the collected stars for free coffee or food.
In the customer’s eyes, the combination of simple loyalty mechanics and seamless payment option both simplifies the purchase process and brings joy and value from earning rewards.
Remarkably, given its strong position and polished customer experience, Starbucks is one of a few brands which requires customers to use a single payment method to participate in a loyalty program.
4. Chick-fil-A One
Chick-fil-A, one of America’s most loved fast food restaurant chains, took the loyalty program to the next level. And so can each of their loyal members since the company built their rewards program around tiers.
The idea is simple – the more customer spends, the higher the tier. Members climb their way up through four membership statuses: Member, Silver, Red, and the ultimate Signature tier.
5. My McDonald’s Rewards
Within six months after the launch of in the US, over 30 million loyalty members enrolled in McDonalds’ app-based rewards program, with a self-proclaimed ambition to soon become the world’s largest loyalty program. Such results were publicly praised even by McDonald’s CEO Chris Kempcziski who stated that their rewards program has exceeded expectations in terms of enrolment and participation.
Once you try it, you’ll love it. That could be McDonald’s motto, at least when it comes to loyalty. Why? Even though the actual mechanism of the program does not differ so much from its competitors. The user earns points and redeems them for food and beverages. What makes the program attractive is the actual selection of rewards and discount coupons. When visiting McDonalds, it makes sense to check how you can get better value with the app.
For example, it awards newly registered users with astounding 1,500 points, which is enough to get a free cheeseburger. Now imagine that you have just downloaded the app, there’s no need to even order anything, yet you still can enjoy the extra treatment. And once you try it… you are hooked!
Digital loyalty: more unique, more personal, more affordable
Despite using various mechanics, there’s one clear trend in loyalty programs: digitalisation. It is the single most important thing as it helps brands build more engaging & interactive loyalty experiences. Unlike “pre-digital” propositions, modern loyalty allows for creating multiple customer segments, targeting them with personalised offers, measuring impact on these offers and refining your marketing to get better results over time.
Whichever loyalty program concept you decide to implement, make sure it is built on understanding of your customer preferences and your company’s ability to serve them better than your competitors.
We discussed 5 examples of great loyalty programs of some of the largest restaurant chains. Are you tempted to supercharge your own rewards program? It may seem appealing, but difficult to implement, when resources are limited. But if your strategy is sound and your marketing is exciting, the great news is that technology is no longer the barrier!
TRIFFT Loyalty Cloud can provide you with world-class technology to run modern, secure and engaging loyalty concepts so your primary focus is strategy.