Dive Brief:
- Mod Pizza on Wednesday lowered its loyalty points threshold at which customers can redeem rewards from 150 points to 50 points for some menu items as part of broader changes to its rewards program.
- The changes include a shift to three tiers of rewards redemption — 50 points, 100 points and 150 points — and the ability to donate small amounts of money to the Mod Opportunity Network, a charity that connects disadvantaged job seekers to non-profits that aid in finding employment.
- Mod did not change its points accumulation rate, which remains one point per $1 spent, meaning its threshold change is an effective discount. This stands out from competitor loyalty strategy, as many brands are raising the cost to redeem core menu items, or otherwise moving to reduce offered discounts.
Dive Insight:
Mod’s new rewards tiers, and tandem increase in rewards options, fit an industry trend toward greater personalization and diversity in rewards offerings. Tiered rewards offerings are a common feature of dollars-for-points programs, as they allow brands to fine tune the discounts offered on specific menu items.
But Mod’s change is different. The rewards cost of most menu items remain the same for the pizza chain, while most other restaurant chains that have shifted the structure of their redemption tiers have also raised the cost of the majority of their items. TGI Fridays, for example, increased the redemption cost of six menu categories in May, while holding the costs of two categories steady and reducing the cost of two others.
At the 50 points level, Mod customers can redeem a non-alcoholic drink, an alternative pizza crust change, a No Name Cake, or a $1 donation to the Mod O.N. One hundred points redeems a free delivery, an order of cheesy garlic bread or a $2 donation, while 150 points earns a free pizza, salad or any other menu item (except alcoholic beverages) or a $3 donation. While the reduction in points value only applies to drinks, cake and garlic bread, these items are still effectively discounted.
