Dive Brief:

• Domino’s has halved the minimum spend required to earn loyalty points with the launch of its enhanced loyalty program, Domino’s Rewards, the chain announced Tuesday. Customers can now earn 10 points per order on every order of $5 or more. 
• Under the chain’s previous Piece of the Pie rewards program, which launched in 2015, customers earned 10 points on every order over $10. 
• Domino’s update will make it marginally easier for customers to earn rewards, and allows the redemption of a greater variety of dishes. Many competitors are also updating their rewards programs, but are also increasing the rewards costs of at least some items.

Dive Insight:

The updated program includes a greater variety of rewards options, which were previously limited to a free pizza for every 60 points earned. Customers can now get a variety of rewards at the 20-, 40- and 60-point levels.

For 20 points, customers can get a free dipping cup, a 16-piece order of Parmesan Bread Bites or a 20 oz. drink; 40 points earns an order of Bread Twists or Stuffed Cheesy Bread; while 60 points can be redeemed for a medium, two-topping pizza, pasta, Oven-Baked Sandwich or a 3-piece order of Chocolate Lava Crunch Cakes, according to the press release.

The precise discount rate for Domino’s rewards is impossible to calculate, since points are earned on a per-order basis. Customers who place smaller orders receive a higher effective discount, as a $5 order earns the equivalent of 2 points per dollar, while a $20 order earns half a point per dollar. This accrual rate will be supplemented by additional, unspecified opportunities to earn more points alongside members-only discounts.

By making rewards accrual marginally easier and adding new, less points-costly items, Domino’s is responding to the challenging environment for its delivery sales, CEO Russell Weiner said on the chain’s most recent earnings call, where he foreshadowed the loyalty rollout.

“One of the things that's going to be true in the new loyalty program is we're going to recognize that a carryout customers’ ticket is lower, and so the hurdle for getting points will be lower,” Weiner said.

The improvements to the program may also improve customer engagement and aid in the retention of customers in the company’s direct delivery channels, rather than its recently launched Uber Eats channel. Domino’s said Uber Eats orders won’t be eligible for customers to earn or redeem loyalty points. 

Just last week, Subway replaced its longstanding My Way program with MVP Rewards, while earlier this year Sweetgreen launched a tiered rewards program.

Domino’s move fits into a trend towards broader redemption variety, with giants like Dunkin’ adding new menu categories to its rewards program. Often, as in Dunkin’s case and the case of TGI Fridays, loyalty program overhauls have raised the cost to redeem many core items. Other chains, like Mod Pizza and Del Taco, have lowered the overall threshold of points needed to redeem items, which is what Domino’s has done.