Dive Brief:

• Del Taco has introduced a new loyalty app, called Del Yeah Rewards, with partner Cheetah Digital, according to a company announcement. The app offers a four-tiered rewards program that gives diners the chance to earn free food and experiences.
• Guests earn eight to 12 points per dollar spent, and can access higher tiers with bigger rewards as they accrue more points. Each of the tiers — called Queso, Scorcho, Inferno and Epic — include rewards, challenges, badges and exclusive events and experiences. Rewards members earn free coffee on their birthday and additional free food bonuses per quarter.
• Del Taco's loyalty launch comes as several other QSRs, including McDonald's and rival Taco Bell, enter the space in a bid to attract and retain customers. Twenty-four percent more QSR customers reported using at least one restaurant's loyalty program on April 22 than January 22.

Dive Insight:

There's a reason so many restaurant chains are adopting or enhancing loyalty programs in earnest. Consumers have significantly increased digital ordering and payment throughout the pandemic thanks to lingering dining room restrictions. Ninety-two percent of restaurant customers plan to continue ordering online at least as often as they do now, according to April research from Paytronix and PYMNTS.

Meeting customers where they are isn't the only benefit loyalty programs bring, however. During Del Taco's Q2 earnings call in July, CEO John Cappasola said the new rewards program is capturing data to "drive personalized and valued experiences for guests to increase sales and frequency over time."

Other brands have experienced similar results with their loyalty programs. Taco Bell's rewards program, for example, drove an increase in overall spend of 35% for loyalty customers versus their pre-loyalty behavior in Q2 2020. During Chipotle's Q2 call in July, CEO Brian Niccol said the program is driving higher tickets and frequency.

Cappasola expects Del Taco's program to build over time, with support from an initial marketing push and an "ongoing effort at the restaurant level." Del Yeah Rewards could stand out from the QSR crowd thanks to its gamified experience, too. The program offers guests challenges to unlock higher tiers. Chipotle recently added a similar feature that allows customers to collect achievement badges.

Del Taco's program will also likely complement Del Taco's new prototypes, including drive-thru-only models, that are focused on digital-first consumers.