Dive Brief:

• Potbelly added new menu categories and a tiered system to its loyalty program on Monday, the chain announced in a press release.
• Customers using the perks program now “have access to the entire menu," said David Daniels, Potbelly’s chief marketing officer. Previously, customers could only redeem entrees, and the redemption cost for those items started at 1,000 points.
• The brand also added tiered loyalty options based on yearly spend. Customers who spend more than $200 dollars a year, the amount needed to earn 2,000 coins, enter the “Pro” level. Pro customers receive 11 points per dollar and ascend to the “Boss” level when they accumulate 5,000 coins in a year, equal to about $473 in spend given the changing accumulation rates. Boss members earn 12 coins per dollar.

Dive Insight:

This rewards modernization simultaneously broadens the redemption possibilities and adds a sense of progression for high-spending customers. Those in the “Rookie” tier, below the 2,000-coin threshold, get a free cookie or Dream Bar on their birthdays, access to double coin days and unspecified additional benefits. The higher tiers have a broader choice of menu item for the birthday perks. 

The easiest items to redeem cost 200 coins, much lower than the old threshold.

Daniels said the “program puts Potbelly fans in greater control of their rewards. Previously our fans had to wait until they had enough points to earn a reward for a free Entrée. Now they can earn a reward in as little as one or two visits.”

The brand renamed points as coins, and said that earned points will be automatically converted into coins.

Tiers and greater customer control have emerged as markers of renovated loyalty programs in recent years. Broadening the number of menu items available for redemption, for example, gives customers the ability to exercise discretion in choosing what items they want. Given the strong emotional attachments customers have to specific menu items, that could strengthen customer loyalty to brands.

In just the last six months, Del Taco added new spend based tiers and added newer redemption categories; Cracker Barrel launched its national loyalty program with three redemption price points; Shipley Do-Nuts added a tiers-based program; Domino’s added new redemption options and cut the minimum size of orders needed for points accumulation from $10 to $5; Subway added spend-based tiers; and Cava added more redemption options to its loyalty program. Potbelly’s move is in keeping with an industry push toward broader consumer choice and programs with escalating rewards tied directly to total consumer spending.