Do Restaurant Loyalty Programs Work?

The Opportunity

Brand Loyalty is a $300 Billion industry globally, with $150B of that coming from the United States alone. In addition, that market is growing at a rate of 10%-15% per year. This growth has exploded in recent years, leading to huge shifts in how brands see the future of Brand Loyalty. Developing a strong loyalty program that can evolve with the industry has therefore become an indispensable part of a well-rounded marketing strategy.

Main Benefits

It is critically important for restaurant chains to develop strong and effective loyalty programs because these programs help establish long-lasting relationships between brands and their customers. In contrast to the ephemeral nature of coupons and promotions, Brand Loyalty helps ensure that customers continue to make purchases on an ongoing basis. This certainly extends to fast food restaurants, even with the relatively low industry average of around $10.99 per order. As a result we've seen the QSR behemoths place an increasingly greater focus on establishing new loyalty programs. In addition, brands who have aging loyalty programs are redesigning them in order to ensure they're set up to keep customers loyal for the long-haul. After all, their competitors are making strategic efforts to acquire loyalty program members in what is quickly becoming a key battleground area.

Recently Launched Restaurant Loyalty Programs

Some of the most recognizable and iconic restaurant chains in the world have recently launched or redesigned their loyalty programs. It may come as a surprise that brands this big had until now eschewed a marketing opportunity that we now think of as pivotal– proof of consensus that a well thought out and properly implemented Loyalty strategy can make a big impact in any industry. The following restaurant chains have recently created or revamped their loyalty programs:

McDonald's (Launched, June 2021)
Wendy's (Launched, July 2020)
Burger King (Launched, February 2021)
Popeye's (Launched, June 2021)
Taco Bell (Relaunched, July 2020)
El Pollo Loco (Launched, September 2020)
Chipotle (Relaunched, June 2021)

The results have been great. After these programs were launched, Loyalty members spent about 6% more per order than non-loyalty members and carried a disproportionate share of sales during the most painful period of the pandemic.

Final Thoughts

As we've watched Brand Loyalty evolve over the past decade or so, it's hard to ignore the positive impact of building a base of engaged loyalty program members. Every industry seems to be awakening to this positive development, with some of the largest restaurant chains in the world finding success almost immediately after deploying their rewards programs. It's for this reason that brands will continue to bolster their efforts to acquire, engage, and retain loyalty members.