Dive Brief:
- About half of consumers will try a new quick service restaurant because of a coupon, with 50% of women and 44% of men citing financial rewards as the primary driver. The same percentages of men and women also said they would download a restaurant app to access coupons and savings, with about 30% of men and women signing in to rack up loyalty rewards, according to a recent report by Publishers Clearing House.
- Of the more than 2,600 survey respondents, 19% said loyalty programs would entice them to try a new quick service restaurant. Contests drive traffic from 15% of men but only 11% of women, and only about 10% of both men and women make such decisions based on seeing promotions or television ads, the survey found.
- Brand loyalty remains somewhat elusive for quick service, as consumers show affinity for one burger or pizza chain over another, but they don't shy away from competitors. In terms of frequency, about a quarter of respondents visit quick service chains less than once a month, though roughly the same percentage visits once a week.
Dive Insight:
Loyalty programs will continue to drive traffic to QSR, and apps lead the charge in attracting customers. The survey also notes the relevance of chains building legitimate commitments with their customers, which on top of loyalty rewards happens through contests and sweepstakes to win additional prizes.
General ads don't seal the deal with customers, per the survey. Not only have mobile apps been proven to build brand loyalty — an increasingly elusive prospect in the competitive restaurant industry, but also they boost profits. Digital orders tend to be bigger than in-store tickets, and customers tend to return when their app usage rewards them with discounts and free-after-10-type offers.
Since launching My Starbucks Rewards in 2009, the coffee giant's approach has been considered the ultimate role model, according to Skift Table. The program allows members to earn points on every purchase and pay through the app, an idea ahead of its time. Taco Bell, Domino's and Pizza Hut also have been lauded for their multi-faceted approach to rewards, app-only coupons and mobile payments, according to Eater.
The pay-ahead model has proved to be worthwhile for Starbucks and Chick-fil-A, whose app quickly shot to the top of iTunes most downloaded list when it launched three years ago. Yet the coffee company, which sees about 60% of its traffic in the morning, struggled with the 20% jump in rush-hour traffic after launching mobile pay a few years ago, according to CNBC. Customers swamped the pickup areas, pushing walk-in customers to the sidelines and causing many to walk right back out. These stumbles didn't last long, and the chain will enhance its loyalty rewards program this year, which grew 15% during fiscal year 2018.
Perhaps most telling in the Publishers' survey, consumers don't feel tied to one brand — unless that one offers the best deals on a regular basis. Of McDonald's customers, for instance, 45% would visit Burger King, and 39% would try Wendy's. Pizza customers seem to be a bit pickier, with about a quarter of Domino's customers sometimes opting for Pizza Hut or Little Caesars and 16% for Papa John's.
Casual dining also is making inroads through a tech-driven approach to loyalty and promotions, according to Hospitality Tech. Olive Garden and The Cheesecake Factory, for example, both offer apps and have enjoyed comparable sales growth where their competitors have lagged.
Attracting and retaining customers through discounts will continue to make or break one brand's success over another, especially in the hyper-competitive fast food segment. Bigger chains also have an advantage here over smaller fast casual chains, which dominate discourse but might not have the capital to build sophisticated mobile apps.
