Dive Brief:

• On the Border, a Tex Mex chain with 120-plus units, is debuting a new loyalty app on Feb. 2. Customers can track loyalty points and place orders on the app, CMO Edithann Ramey said. 
• The move builds on the chain's existing rewards programs. Queso Club offers participants a year of free queso for $1 and has grown to 122,000 members since its launch in May 2021. On the Border also offers a more traditional loyalty program with about 365,000 members that offers discounts. A version of this program has existed since 2011. 
• On the Border hopes these business changes will strengthen performance after years of unsatisfactory sales, Ramey said. Several rival chains are also investing in new digital and loyalty offerings to improve customer retention and drive higher checks.

Dive Insight:

The COVID-19 pandemic gave On the Border a chance to rethink its business model and experiment with new offerings — and the risks boosted customer engagement, Ramey said. 

Queso Club members visit On the Border 3.5 times per year compared to regular customers, who on average visit the chain 1.7 times annually. The offering is also attracting new diners, Ramey said. 

"We've started to really see, based on their transactional data, a lot of new people and a lot of light users come on. That's when it starts to really [yield a return on investment]," Ramey said. Initially, the Queso Club relied on servers upselling customers to market the offering, but On the Border plans to start formally advertising the program later this year, Ramey said.

The program's success has helped On the Border start growing again. Last year, the restaurant opened two new corporate locations and added two domestic franchise locations, its first new franchises in more than 10 years. The chain also began expanding franchising in South Korea, where it has 17 stores, including four ghost kitchens. The company, whose average store sales hovered around $2 million over the last year, has recently recorded same-store sales that eclipsed pre-pandemic levels. But On the Border's overhaul is still in its early stages, Ramey said. 

Before the pandemic, the chain wasn't seeing much growth.

"Our sales weren't optimal," Ramey said. "It was just a lack of momentum... the guest experience was not where it used to be."

But the company hopes its menu simplification, coupled with staff retraining to ensure a consistent guest experience, bolsters its recovery. On the Border will continue to emphasize its to-go offerings, including margaritas, after the pandemic ebbs, Ramey said. Off-premise dining has remained sticky for the chain. 

"We spent a lot of time making [the menu and operations] simpler so that you can make a great fajita, so that the food comes to the table great every time," Ramey said. 

The loyalty app could be a particular boon to the company's lunch offerings. In-app ordering will make it faster for customers who value a quick meal to place their order ahead, allowing customers to finish their visits in 15 minutes, Ramey said.