On July 8, 2021, McDonald’s took their first long-awaited step toward customer rewards in the U.S. with the MyMcDonald’s Rewards program. Yes, it was a shock to find out that this mega-brand had never ventured into this marketing arena that so many chains and independent restaurants swear by, at least, not in its home country. The brand has created successful rewards programs in other countries, such as France.
McDonald’s kicked off its national loyalty program with a World-Famous Fan Day which just happened to coincide with the national French Fry Day. The day featured free fries and a chance to win 1 million rewards points or free French fries for life.
McDonald’s Loyalty Program
McDonald’s began testing its rewards program in the lucky states of Nevada and Arizona in November 2020. In February, about 900 units in the U.S. had been earmarked as loyalty program test sites.
Now, at participating restaurants, guests register on the McDonald’s app, allowing them to earn 100 points for every $1 they spend on orders. Their four-tier rewards program allows guests to redeem their points starting with 1,500 points, which customers earn after making their first purchase. Home delivery orders are excluded.
The MyMcDonald’s Rewards program is a part of the corporation’s new global growth strategy, which centers on digital, delivery, and drive-thru.
Other Loyalty Programs
Chipotle Mexican Grill Inc. recently updated its rewards program, giving guests more options when redeeming points. Launching the program in 2019, it now boasts over 20 million members.
Starbucks has long been credited with one of the best loyalty programs around. In fact, it had grown so popular that when the brand revamped the program in 2019, it received major backlash from customers who saw their rewards diminishing in value. Nevertheless, the end of 2020 saw the coffee mega-brand with more than 19 million members and a rewards program that generates almost 50% of its revenue.
Fast-casual brands are not the only segment of the industry to lean into the loyalty program to entice repeat guests. P.F. Chang’s mobile app lets you order, track points, and redeem rewards. When guests sign-up they receive a 1,000-point enrollment bonus, just 1,000 points shy of their first $15 reward. They also receive a complimentary dessert or appetizer during their birthday month and 10 points for every $1 spent.
Bloomin’ Brands Inc also makes it easy for guests to take advantage of their loyalty program and stay true to their brand. Instead of rolling out a dedicated app, the brand chose a web-based loyalty program, creating a Dine Rewards program that ties together four of its brands: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill, and Fleming’s Prime Steakhouse and Wine Bar. Simply dine at any of the restaurants three times in a six-month period and receive up to 50% off on the next visit.
Benefits of Loyalty Programs
In essence, a restaurant’s loyalty program awards its brand-loyal customers by offering rewards for continued patronage. It tracks spending and rewards loyalty through points that can be redeemed for discounted meals, free menu items, or access to special events like wine tasting. It drives sales by encouraging visits and allows operators to target guests with personalized offerings by providing companies with valuable customer data.
It means using available resources to attract loyal customers that tell their friends and family about their experience, ultimately developing a loyal following.
Software Advice reported on the 2020 Bond Loyalty Report which found that 78% of customers are more likely to continue supporting businesses that offer a customer loyalty program and that those enrolled in personalized loyalty programs are over 7 times more likely to recommend the brand.
Remember when Fred Reichheld of Bain & Company came out with the statistics suggesting that increasing customer retention rates by 5% can increase profits by more than 25%? Attracting a new customer costs five times more than keeping an existing one.
another study conducted by Thanx, Inc showed that 70% of retail and restaurant customers never return. Now that’s an expensive acquisition.
Reichheld wrote in his Prescription for Cutting Costs, “Chick-fil-A has so effectively mastered the economics of loyalty it can afford to pay store operators double or triple its industry’s average compensation and still give 10% of profits to charity.”
That is the power of loyalty.
