Wendy's launches loyalty program as part of digital growth

Dive Brief:

Wendy's rolled out its loyalty program Wendy's Rewards on Tuesday, and is offering fans double points on their first order for a limited time, according to a press release.
Customers can earn points by ordering through the mobile app or by scanning an in-app QR code while placing an order at the counter or drive-thru. Orders placed through third-party partners don’t qualify for rewards.
Customers earn 10 points for every $1 they spend on food and will have opportunities to earn bonus points on certain items.

Dive Insight:

Wendy's loyalty rewards program should bolster the chain's digital platform, which the company hopes will make up 10% of sales by 2024. Digital made up 5.5% of sales at the end of Q1 2020. As of October 2019, digital made up 2% of the company’s overall sales. Wendy's Rewards is expected to help drive frequency and customer engagement.

Having a rewards program alongside its mobile ordering app could help the fast food chain better understand customer ordering behavior, which many restaurants have used to tailor offers to specific diners. The program also has a way for customers to accumulate points for in-store purchases, which will allow Wendy's to track orders not placed in its mobile app.

Rewards programs can drive new customer retention as well. According to a 2019 Publishers Clearing House study, 19% of consumers said a loyalty program would be enough for them to try a new QSR and 30% of respondents said they would download a restaurant app to gain loyalty points. Loyalty members also tend to spend more than regular customers.

For Wendy’s, it’s reported that digital customers spend 20% to 60% more through its mobile ordering and delivery capabilities, and these customers also visit four times more than traditional diners.

Having a way to increase total spend and frequency can help set Wendy's apart from its competitors, which don’t offer similar rewards programs. McDonald's only offers its McCafe Rewards program for beverages, while Burger King only offers a rewards program in New Zealand. Both McDonald’s and Burger King apps provide mobile-only coupons, but don't allow customers to accumulate points toward rewards.