Restaurants Rethink Loyalty

For a long time, even offering a mobile loyalty program was a competitive advantage for restaurant brands. Now, with consumers expecting to be rewarded for their digital loyalty, brands are rethinking their offerings in light of customers’ changing habits and demands.

Zaxby’s, for instance, an Athens, Georgia, chicken chain with more than 900 locations in 17 states, announced Tuesday (Oct. 11) the launch of a new loyalty program, Zax Rewardz, replacing its Zax Fanz Club offering.

“Zaxby’s has passionate fans, and now we have an industry-leading rewards program just for them,” Zaxby’s Chief Marketing and Strategy Officer Patrick Schwing said in a statement. “Online orders, in-person purchases, and in-app actions turn into points, redeemable for ‘Rewardz.’ With the new app and loyalty program, we want to make it even easier for our customers to enjoy our products while racking up the rewards.”

With the new program, the checkout process has been simplified, as has the process of redeeming rewards across different ordering channels. Additional features aim to make users feel more connected to the brand, such as a “personalized welcome” as well as more “conversational language.”

It also seems that the new program will give users more control over their rewards. In the past, members have complained about the lack of transparency and the unpredictability, with users not having insight into the progress of their earnings. Now, the program offers quantified points and visibility into the rewards for which they can be redeemed.

Zaxby’s isn’t the only brand updating its rewards program to keep up with changes across the industry. Coffee and donut giant Dunkin’, which has more than 12,600 locations in 40 countries, announced Thursday (Oct. 6) the replacement of its DD Perks program with its new Dunkin’ Rewards.

“When we set out to improve DD Perks, we asked our members what they wanted to see in a new program. They told us three things: flexibility, variety and recognition,” Scott Murphy, head of the beverage-snack category and president at Dunkin’, said in a statement. “And we did just that. We solved the three biggest constraints to bring a new and improved customer experience to Dunkin’ fans.”

The program offers new rewards in addition to beverage rewards and incentivizes high-frequency purchasing, offering more points to consumers who visit several times a week.

Early reactions from Dunkin’ customers on platforms such as Twitter and Reddit showed consumers frustrated that, although points are now rewarded in higher values, they cannot be redeemed for as much. That is, the same items require greater spending to redeem.

Research from the February/March edition of PYMNTS’ Digital Divide study, “Digital Divide: Restaurant Subscribers and Loyalty Programs,” which drew from a survey of more than 2,000 U.S. consumers, found that 38% of quick-service restaurant (QSR) customers use loyalty programs. However, only 21% of consumers cited loyalty programs as a factor that encourages them to patronize a specific QSR.

Read more: Four in 10 Consumers Open to Restaurant Subscription Services