What is a rewards program?
A rewards program is a loyalty program that offers rewards to customers who frequently make purchases from a particular store or service. These rewards can take the form of discounts, free products, or special services. Rewards programs are designed to encourage customer loyalty and repeat business.
6 Successful Rewards Program Examples to Emulate From the Restaurant Industry
How Do Rewards Programs Help a Restaurant Business?
Over two years of Covid-19, followed by inflation has sent the market into a tailspin. According to the August 2022 Consumer Price Index (CPI), the grocery store price index increased by 13.5% from August 2021. With retail food prices soaring, restaurants have started to roll out innovative solutions to bring in business, while offering patrons an affordable dining experience. This has chiefly ben achieved through loyalty programs or rewards programs -- an easy work-around to high food bills. It's no surprise that restaurant purchases have escalated by 8% since 2021.
In a recent Pymnts-Deloitte survey, 43% of customers said they are more likely to visit a restaurant that runs a customer loyalty program than one that doesn't. This means, if a restaurant does not offer a rewards program, it misses out on valuable customers and potential business. 57% of restaurants in the United States already offer rewards programs, and one in four plans to begin a rewards program soon.
Loyalty programs are an important value-addition to a restaurant business. So important, in fact, that any unexpected change to the program can upset customers. We're not exaggerating! In October 2022, when Dunkin Donuts revised its eight-year-old DD Perks rewards program, it left 18,000 sub-Reddit Dunkin customers chagrined.
A New York-based Twitter user, Magdalene J. Taylor, wrote on Twitter, "there is drama in the Dunkin world right now daily Dunkin drinkers are boycotting because they revamped their app rewards program and devalued points. the Dunkin subreddit is fuming! I fear the brand is no longer the people's coffee."
Dunkin' President Scott Murphy issued a statement to The Washington Post defending the changes in the rewards program, saying that the alterations allowed customers to accrue more points and redeem a wider range of food and drink and to accrue points for a full meal.
Leaving that controversy aside, the fact remains that a good restaurant reward program can help boost both top-line and bottom-line growth. Let's see how-
- Increases repeat business- Loyalty programs encourage customers to return more often, increasing sales and profits.
- Builds brand awareness and loyalty- A restaurant business can create a sense of brand loyalty among customers by offering exclusive deals and rewards. It helps keep them coming back and spreading the word about the business to their friends and family members.
- Drives impulse purchases- Offering rewards for spending a certain amount of money or ordering a certain number of items can encourage customers to make impulse purchases they may not have otherwise made. It means more revenue for your business.
- Boosts customer lifetime value- A loyal customer is worth much more than a one-time customer. By investing in a customer loyalty program, you're investing in your business's future by ensuring a steady stream of returning customers who are likely to spend more money over time.
- Attracts new customers- Loyalty programs can also be used as marketing hooks to attract new customers. For example, offering a discount on their first purchase will entice new diners to try out your restaurant, while also enrolling them in your loyalty program so that you can continue marketing directly to them.
Reward Program No. 1- Domino's Piece of the Pie
The best rewards programs are ones that offer their members the flexibility and freedom to choose how they want to redeem their rewards. Domino's Piece of the Pie is one such program.
The Piece of the Pie Reward Program, available to residents of the United States, is pretty simple- for every online order, you earn points, and once you reach 60 points, you can redeem them for a free medium two-topping pizza. You can rack up points pretty quickly if you order from Domino's regularly, and there's no limit to how many points or free pizzas you can earn.
Customers can also use their points to get other prizes, like free breadsticks or a discount on their next order. Plus, the pizza brand keeps track of the point balance so that customers always know how close they are to their next free pizza.
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Rewards Program No. 2- Subway MyWay
The Subway MyWay Rewards Program was launched in 2018 to replace its long-running Sub-Card Loyalty Program. The program resulted from two years of research with the sandwich brand's customers. The research included in-depth questions on what a customer expects from a reward program.
MyWay bases its rewards on the frequency of purchases made by a customer. The more customers visit and buy from Subway, the more points they accrue, and these can be redeemed for free food. There are also different reward tiers that customers can reach, which will give them access to additional benefits, such as freebies on their birthdays.
To sign up and join the program, a customer has to register online or at a local Subway restaurant. Once you're a member, you'll earn points with every purchase. And the more points you earn, the bigger the discount you'll get on your next sandwich. The number of points varies by the item purchased. For example, a 6-inch sub gets you four points, while a footlong sub gets you 10 points. Once you've earned 200 points, you'll receive a $2 reward for your next purchase at Subway. You can check your point balance and view your rewards in the "MyWay Rewards" section of the Subway App or by visiting mysubwaycard.com.
Rewards Program No. 3- Starbucks Stars
It's been consistent for Starbucks. The coffee chain's loyalty program has always been termed one of the best restaurant rewards programs by industry veterans. It now represents 53% of spending at stores, with 25 million rewards members (as of October 2021).
Starbucks is leading the game because it pays attention to customer experience. The brand often collaborates with top business intelligence firms to find ways to achieve and improve on its business goals while keeping customer needs at the fore. Unsurprisingly, many rewards programs for small businesses are now modeled after Starbucks.
So, how does it work? Starbucks Stars Rewards program allows customers to earn "Stars" for every purchase they make. These stars can then be redeemed for free drinks, food, and other merchandise. The more stars a customer earns, the more valuable their rewards.
To join, customers simply need to create an account online or through the Starbucks app. Once enrolled, they earn two Stars for every $1 spent at Starbucks. Stars can also be earned by reloading money onto Starbucks Gift Cards, making online purchases through the Starbucks Store, or ordering via the Starbucks app. In addition to free drinks, members also get special discounts and early access to new products.
Once you've amassed 200 stars, you become a "gold" member and receive a free drink. Four hundred stars get you a free food item, and 600 stars net you a free one-year subscription to either Spotify or the New York Times (conditions apply).
Rewards Program No. 4- Chick-fil-A One program
The Chick-fil-A Rewards Program, launched in 2016, is a great way to get free food and discounts at Chick-fil-A. To participate, one must sign up for an account on the Chick-fil-A website or mobile app. Once a customer has an account, they can earn points by purchasing at Chick-fil-A restaurants. For every dollar spent, a customer earns 10 points. However, what's exciting about this program is that it allows customers to also earn points by taking part in surveys and other activities on the website of the fast-food chain.
The Chick-fil-A One customer reward program has four tiers-
Member status is the starting tier.
Silver status requires a customer to earn 1,000 points within a year.
One must earn 4,000 points within a year to reach the Red status.
One must earn 10,000 points within a year to reach the Signature status.
The benefits of each tier are as follows-
- Chick-fil-A One members accrue points on every purchase.
- In the starting tier, members get 10 points on spending $1. Silver, Red, and Signature members get 11, 12, and 13 points, respectively, for every dollar spent.
- Members also receive free select entrees when dining at Chick-fil-A and using their Chick-fil-A One account to pay.
- Customers also receive free rewards like coupons and drinks on birthdays.
- The Silver, Red, and Signature members can also share their reward points with family and friends.
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Rewards Program No. 5- MyMcDonald's Rewards
MyMcDonald's Rewards had 20 million users in 2021. The McChicken sandwich was the most redeemed prize. In addition, rewards members exchanged their points for 17 million desserts and 360 tons of fries. MyMcDonald's is one of the best restaurant rewards programs around. Let's take a close look at it.
Customers can sign up for the program by downloading the MyMcDonald's app or registering an account on the MyMcDonald's website. Once registered, customers can earn rewards points by scanning their app or entering their phone number at checkout when they purchase at a participating McDonald's restaurant. Points can be redeemed for food and beverages such as McCafe drinks, McFlurry desserts, and salads.
Every $1 spent on McDonald's products earns the customer 100 points. The more points one collects, the the further up the tiers one scales. The program is divided into four point-based tiers- 1500, 3000, 4500, and 6000. With every tier, the value of a customer's rewards increases.
What's interesting about this reward program is that there are other ways to accumulate points. For instance, if a customer links their credit card or debit card to the QSR chain's mobile app, they'll earn 1500 bonus points. And on paying via the app, they can get a McChicken sandwich or a classic Cheeseburger for free.
Rewards Program No. 6- Chipotle's Rewards Exchange
In 2020-2021, Chipotle's loyalty program drove a record year for the fast-food chain and attracted millions of new customers. According to executives at the fast food brand, the rewards program has "created deeper levels of engagement and helped drive higher checks and frequency." By September 2021, the program included nearly 24 million members, about 25% of the fast food chain's customers. In addition, these members helped generate digital sales of about $2 billion.
Chipotle's revised its loyalty scheme in 2021 as Rewards Exchange. Under the scheme, customers don't have to wait to accumulate 1250 points before redeeming them. Rather, they can now order tortilla chips for only 250 points, a bottled beverage for 600 points, and a portion of guacamole for 400 points.
The brand expanded its range of rewards too. It lets customers exchange rewards points for Chipotle merchandise and also lets them donate their points to nonprofit organizations, struggling communities, farmers in need, and local businesses.
There's a touch of gamification as well. With the launch of its online video game "Race to Rewards Exchange" Chipotle Rewards members can generate rewards points by simply playing.
Ways to Make Your Rewards Program Successful
- Train your staff. Make sure that everyone who works at your restaurant knows about your customer rewards program and how it works. The last thing you want is for a customer to ask about it and have your staff not know what to say.
- Promote, promote, promote. Use every marketing avenue to let people know about your rewards program. Put up signs in your restaurant, mention it on social media, send out email blasts, etc.
- Make signing up easy. You want customers to avoid jumping through hoops to sign up for your program, so make the process as straightforward as possible.
- Get creative with rewards. Offer incentives that will excite your customers and keep them returning for more. Think outside the traditional "points" system and create something unique that will make an impact.
- Integrate your rewards program with your point of sale system. It allows customers to easily input their phone or loyalty card numbers to receive points or offers. Some POS systems, like Plumpos, can keep track of reward points and offers available to customers.
- Pay attention to feedback. Always monitor the popularity of your rewards program and solicit feedback from participants whenever possible. This will help you improve the program and ensure it meets people's needs and expectations.
Intelligent, cloud-based reporting meets enterprise-class reliability.
Meet PLUM Point of Sale, an affordable and reliable alternative to traditional Point of Sale software.
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Frequently Asked Questions
What do rewards program mean?
A rewards program is a service offered by many businesses that gives customers the ability to earn points or discounts based on their purchases.
What rewards programs are worth it?
There is no easy answer when it comes to picking the right rewards programs. However, a few things to look for include ease of use, value, and flexibility. Additionally, it is important to consider how often you will actually use the rewards.
How does a rewards program work?
A rewards program is a way for a company to thank its loyal customers. Customers can earn points for every purchase they make, which can be redeemed for discounts or freebies.
Which reward program is best?
There is no definitive answer to this question as it depends on the individual's preferences and needs. Some people might prefer a rewards program that offers cash back, while others might prefer one that offers points that can be redeemed for merchandise or travel.