Now, more than ever, food companies are leveraging loyalty programs to generate sales. At the same time, customers are demanding them.
Wade Hanson, Principal with Technomic Inc., said the Baby Boomer generation especially values loyalty programs like the Royal Perks initiative recently launched by Burger King.
“Boomers are going to be looking more and more for value and loyalty programs,” Hanson said, during a recent Food Institute webinar that examined consumers’ evolving demands.
Burger King launched its Royal Perks program in markets like Los Angeles, greater New York City, and Miami, rewarding loyal customers with occasional free items, upsized meal options, and online rewards, reported Forbes (Feb. 9). McDonald’s, meanwhile, is currently expanding a similar loyalty program to locations in New England. Other chains have embraced the concept, too, including the following:
- White Castle added a “Craver Nation” loyalty program in September
- Wendy’s added a new rewards program in July
- Taco Bell announced a revamped loyalty program, also in July
All told, 12% of QSR operators have added a loyalty program in the past year, according to the National Restaurant Association’s 2021 State of the Industry report.
Kris McDonald, vice president of development at Checkers & Rally’s, said loyalty programs are a major initiative for most chains at the moment.
“We’ll continue to build both the app and our loyalty program,” McDonald told The Food Institute. “We’ve almost got the consumer expecting now that there’s going to be some sort of deal, promotion, or reward. We’ve kind of trained the consumer to expect that.”
Amid rising customer expectations for their dining experience, including online ordering, various delivery options, and the aforementioned rewards, restaurants must consider implementing loyalty programs to stay competitive.
“Customers demand loyalty programs, and for that to be expanded, to be heard as customers…if a restaurant won’t meet [those] demands, someone else will,” said Dan Rowe, CEO of Fransmart and a board member at the National Restaurant Association.