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Restaurant Chains Look for Ways to Shake Up Loyalty Programs

When everyone's offering the same dollars-for-points rewards, how do you stand out from the pack?




The Newk's Q pizza at Newk's Eatery

Newk's Eatery

Restaurant loyalty programs are hot these days, but many customers belong to more programs than they can keep up with. That means it’s more important than ever to offer rewards that customers will appreciate and remember, according to Nation’s Restaurant News (NRN).

“Most people are part of 16 to 20 different loyalty programs but are only actively engaged in a few,” Mark Johnson, CEO of Loyalty360, told NRN. “If you can get into that active consideration group, then you are set. Understanding what motivates your customer on an individual level—it’s a huge opportunity.”

Related: How to build a successful pizza rewards program

Thirty-nine of the country’s 50 largest restaurant chains offer digital rewards programs, but the leaders are constantly fine-tuning their offerings. Seattle-based MOD Pizza only recently launched its program, which was inspired by an unlikely industry—the nation’s airlines.

“If you think of rewards programs outside of our industry, like frequent flyer programs, the airline will usually recognize you by name and know your favorite drink and treat you extra-special,” said Kevin Flaherty, MOD’s vice president of digital marketing. “We need to do something similar for the restaurant industry. The points and basic rewards are expected by now. The next generation of loyalty is built on enhanced customer experience. That’s when it goes beyond a transactional interaction and really builds brand regard.”

Under MOD’s dollars-for-points program, customers earn a free item of their choice once they hit 150 points. But instead of cashing in their points, they can donate them to Generosity Feeds, a non-profit that provides meals to children facing food insecurity. Customers also periodically receive free offers on menu items they order regularly and discounts on items they’ve never ordered before.

Related: Why customers might be suspicious of your loyalty program

Newk’s Eatery, a Jackson, Mississippi-based chain that offers pizzas, sandwiches and soups, will launch its own rewards program in the coming months. In addition to the usual points system, Newk’s is experimenting with different—and more logistically complicated—perks, including the opportunity for members to cut in line during peak lunch hours, get “prime” seating or receive free samples of new menu items.

“We want to be able to create a better way for consumers to be interested in what we have to offer and leapfrog over the digital glorification of a punch card,” Michelle Spohnholz, Newk’s vice president of marketing, told NRN. “Traditional loyalty programs are one-size-fits-all, and we want to evolve toward meeting the needs of our guests where they are.”

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