NEWTON, Mass.—Forty-eight percent of restaurant patrons surveyed say they engage with a loyalty program in some way, according to a new report by Paytronix Systems Inc. and PYMNTS. The survey showed that similar shares of consumers use loyalty programs at QSRs (42%) and restaurants with table service (43%), while 64% of customers use loyalty programs at multiple restaurants.
The companies’ latest report, “The Digital Divide: Minding The Loyalty Gap,” finds that 34% of respondents say that tangible improvements to the way they pick up and order food would boost their loyalty. Also, mobile technologies are key to customer engagement, with half of restaurant patrons interacting with their favorite restaurants’ loyalty programs via the restaurants’ mobile apps.
Younger adults, college-educated adults and individuals who earn more than $100,000 annually exhibit the highest engagement rates with restaurant loyalty programs.
Nearly 70% of QSR patrons use loyalty programs in several of their frequently visited restaurants. Table-service restaurant patrons use loyalty programs slightly less frequently at 64%.
“Today’s consumers are convenience-focused and digitally savvy, and those key characteristics influence how and where they choose to dine. Loyalty program usage is strong, but consumers' interest in participating in such initiatives may be mitigated by how easy participation is and whether they find the overall ordering process frictionless,” the report said.
Paytronix’s previous report “The Digital Divide, Aggregators and High-Value Restaurant Customers” found that deals, discounts and loyalty programs attract high-spending, high-frequency customers more than other spending groups, and these buyers account for one-quarter of restaurant patrons and an outsized share of food aggregator users.
Fast casual restaurants flourished during the pandemic partly because of loyalty programs, which allow QSRs the ability to leverage customers’ data. Panera Bread is famous in the fast-casual channel for its loyalty program, which is subscription based and focused on unlimited coffee and hot tea for $8.99 a month plus exclusive rewards for subscribers, but many subscribers don’t leave the restaurant with just a cup of coffee because Panera is focused on the cross-sell and the upsell. It’s also a simple and transparent loyalty model.
Chipotle is another loyalty champion. Before COVID-19, Chipotle had fewer than 10 million rewards members, and by December 2021, there were 24.5 million.
NACS Magazine dove into loyalty programs and how they can provide convenience retailers with critical consumer insights and a competitive edge in “Just Rewards.”