loyalty

Relying on customer loyalty during economic uncertainty

By Liam Gilmore

In a world where inflation is tightening its grip and customers are watching their pennies, QSRs are looking to customer loyalty as a fundamental part of their success, focusing on resilience and adaptability in the face of economic challenges. As menu prices soar to unprecedented heights, businesses must pivot towards cutting-edge loyalty programs that not only retain but also recapture the attention of budget-conscious consumers.

Restaurants must ensure their loyalty initiatives stand out in the fiercely competitive QSR landscape. The key lies in striking the right balance between enticing deals and navigating ever-shrinking profit margins, a delicate dance that digitally mature companies have mastered adeptly.

Digital differentiation

What sets loyalty programs apart? The secret lies in their robust digital experiences. Apps that facilitate contactless ordering – a feature gaining popularity in recent years – are taking over. Value is also key as customers are enticed with deals and prizes, earning reward points that are tracked on the app’s sliding scale. To unlock even more perks, customers need to make more purchases—a mutually beneficial incentive for both customers and shareholders.

Domino’s Pizza has invested heavily in digital experiences, allowing customers to order pizza through their app, website, or even using voice commands. Their loyalty program, “Piece of the Pie Rewards,” offers points for every order, leading to free pizzas and other rewards.

While many QSRs have embraced loyalty programs, merely having an app or online ordering system is no longer sufficient. Companies need to emulate the frontrunners by investing more in digital features that set them apart.

Digital solutions for every budget

But what about smaller QSRs with tighter budgets? Not every establishment can spend what McDonald’s, Domino’s, or Chick-fil-A are spending. In this scenario, third-party apps emerge as a lifeline. By building upon a simple app foundation, restaurants can create personalized apps without the need for a dedicated DevOps team. This cost-effective option empowers smaller QSRs to compete with corporate giants in an industry already strained by inflation.

These third-party solutions enable QSRs to enhance customer loyalty through digital experiences, offering in-app delivery systems, loyalty reward programs, and a streamlined ordering process. Small QSRs can transition away from traditional punch cards and reclaim their regular customers from corporate giants.

Yet, even with digital solutions, challenges persist. As consumers continue to demand custom and personal digital interactions, white-label solutions might fall short. Many mid-sized companies encounter issues with digital penetration thresholds, impeding their ability to personalize experiences to the extent they desire.

Engaging customers holistically

Among a sea of loyalty programs, QSRs must explore new ways to engage customers. Brands like Dunkin’ Donuts are expanding their mobile app to enable customers to order ahead, pay with a digital card, and earn rewards through their DD Perks program. The app also provides personalized offers based on customer preferences.

This further highlights the need for personalization and the fact that staff can enhance customer service by establishing relationships with regulars and maintaining top-notch restaurant conditions.

On the digital front, minimizing wait times is imperative. Features like ordering ahead, scheduled pick-up times, and QR codes for bill payments cater to customers’ desire for efficiency and take some of the pressure off strained labour conditions.

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In an era of inflation and economic uncertainties, QSR leaders face tough decisions. Prioritizing operational efficiency and minimizing capital expenditure are tempting options, but those willing to invest in growth through research and development, additional physical locations, and better digital experiences are poised for outsized returns in this increasingly competitive market.

By prioritizing customers’ digital experiences, QSRs can elevate customer loyalty and ensure continued patronage, even in the face of more price hikes.

Liam Gilmore, Director of Business Development, focuses on driving new and existing growth for the Go To Market team at Bottle Rocket. Liam delivers new opportunities into the business, and their partnership network, as well as building strategic programs and models that serve to grow accounts within Ogilvy and WPP’s network.