Dive Brief:
- Qdoba has revamped its rewards program to make it easier for customers to accrue and redeem points, the company announced Thursday. The new program places rewards in customers' wallets automatically, and new members can receive free chips and queso during their next visit.
- The rewards offering now uses a two-tiered structure. Loyalty members will earn one point per dollar spent, and are able to redeem 125 points for a free entree. After 12 visits in one year, members access a higher rewards tier with more benefits, like $2 chips and queso and other seasonal offerings.
- Qdoba's loyalty provider, Paytronix, has found that close to 70% of fast food and fast casual restaurant diners use loyalty programs at their preferred brands.
Dive Insight:
Restaurant chains are betting big on loyalty programs' potential to increase consumer spend, drive repeat visits and yield valuable data.
Forty-seven percent of diners now use at least one restaurants rewards program, according to research from Paytronix and PYMNTS. Rewards Network research also found that demand for loyalty offerings have grown throughout the pandemic, with 47% of survey respondents reporting reward incentives are more important than they were prior to the COVID-19 crisis.
"Well-designed and executed loyalty programs, especially programs like this one, can have a substantial impact on visit frequency, incremental revenue, and overall customer lifetime value," Paytronix CEO Andrew Robbins said in a statement about Qdoba's loyalty program.
Keith Guilbault, CEO of Qdoba, said initial indicators from the chain's program were positive.
"We've introduced a simplified and easier-to-understand program that rewards people with free food fast," Guilbault said in a statement. "We've already seen a 20% increase in weekly sign-ups since the program launched."
QSRs have led much of the restaurant category's loyalty innovation, deploying a range of promotional strategies to encourage diner retention. On the Border has made its loyalty program, which offers free queso for a year, the centerpiece of the company's entire rebranding. Domino's, meanwhile, used its loyalty infrastructure to try and shape demand, offering customers $3 credits on carryout orders to incentivize takeout versus delivery.
Chipotle, the largest Mexican brand in the U.S. fast casual segment, has gamified its loyalty program and added branded apparel to its food offerings. Roti, a Mediterranean fast casual chain, offered customers $10 credits just for downloading its app. Peets, which also works with Paytronix to facilitate its loyalty offering, also expanded its loyalty offerings in the last year, and Taco Bell expanded its $10 taco subscription in January.
