- Design industry shaping loyalty programs
- Integrate easily and go live quicker
- Deliver hyper-personalized consumer experiences
August 03, 2022
The delightful world of food and beverage – a market estimated at USD 500 Bn – calls for an eclectic customer experience ecosystem today. Beyond driving repeat purchases through incentivized free meals and drinks, the F&B industry is witnessing consistent innovation through growth-driving loyalty programs. In the wake of COVID-19, while some major shifts were underscored by smart food-technology applications, ghost kitchens and delivery apps driving last mile fulfillment for several retailers, personalized loyalty offerings genuinely pushed the envelope across new interventions. They helped companies overcome some major challenges that stood in the way before.
1. Behavioral Changes: Key business growth drivers were stalled due to new behavioral changes after the pandemic. An increase in demand for sustainable packaging and organic ingredients meant rethinking brand engagement strategies altogether.
2. Reliable Messaging: Consumers became health conscious to the point of making sure that they only opted for those F&B brands with the right messaging and consistent transparency.
3. Real-Time Rewards: This is where loyalty programs needed to be tailor-made as per emerging preferences to drive higher returns in the long term. New practices were set into motion to ensure that consumer needs were met with adequate data-backed campaign management and the implementation of sophisticated tech stacks.
Now that we have looked at the top trends that are being incorporated into F&B loyalty, let’s also look at the leading examples of brands that are winning over customers.
The global mega cafe brand has undoubtedly altered F&B loyalty programs forever. They offer the most sophisticated and well-managed digital as well as physical card-based reward systems. Starbucks works on the simple premise of point collection and redemption but goes many steps further to ensure that customers enjoy VIP status on the go.
Whether enjoying a free drink on your birthday or getting a bonus meal after a repeated coffee purchase, Starbucks has left no stone unturned when it comes to customer satisfaction.
In the Mexican cuisine domain, there’s high competition globally. Driving their Eat, Earn, Enjoy philosophy within the realm of loyalty marketing, Chipotle’s winning strategy is to encourage free Chipotle for all. They have a simple system of point-based redemption.
For every $1 spent, 10 points are instantly earned. Purchase is enabled at an omnichannel level across multiple touchpoints. Customers can either buy Chipotle in-store, on the app or online. They can then start collecting points. Once 1250 points are achieved, they can then also get a free Chipotle entree of their choice.
Premium reward-levels enabled by Maggie Louise’s Club Cocoa program ensures that customers keep coming back for more. Experiential rewards are activated upon reaching a VIP level. Customers then enjoy free access to exclusive events and new product tasting sessions. They also get gift hampers of these products and are motivated further by special discounts upon the first or second buys. Three levels are available for the rewards to be enabled. The first is the Insider level (0-1999 points) that provides a welcome gift alongside the point collection system. The next is the Enthusiast level (2000-4499 points) that also provides a birthday gift and higher points on every purchase. Lastly there is the Connoisseur level that enables maximum rewards such as the exclusive sneak-peaks into new collections as well as event invitations. This level is the most desirable for true lovers of Maggie Louise chocolates.
In the world of donuts and loyalty, DD Perks is a large-scale program. The simple process of membership and pre-order services allows for maximum customer satisfaction in-store. Members can pay digitally through a loyalty-integrated payment system that allows for a seamless point-to-cash redemption. What’s more is that once a new member signs up on the app, they immediately avail of a free drink right away. The loyalty experience is further personalized with free drinks on birthdays as well as free drinks every 200 points earned. DD Perks also include special surprise gifts and gamified rewards that delight repeat customers and drive higher loyalty in the long term as well.
The superior customization of rewards and recognition was enabled by a more sophisticated process of customer-data collection. Large F&B conglomerates with multiple brands orchestrated data centralization practices to ensure that campaign management systems were able to successfully resolve personalization issues encountered when they worked in siloes. Digital transformation through the implementation of strong tech stacks, moreover, brought into focus the need for multi-tier loyalty programs that offer unique rewards as per changing customer needs.
Rewarding customers who demonstrated higher levels of loyalty meant enabling a host of additional offers that brought in creativity into the realm of loyalty marketing. Starbucks Rewards for all different types of customers is perhaps the next-in-class example of this practice. We will look at the winning strategy behind Starbucks’ sustained dominance in the industry in the later section.
Discounts that facilitate percentage-based rewards encourage repeat purchases like nothing else. The leading food-delivery service, Zomato, ensured a win-win strategy for itself and its loyal customers by activating percentage-based rewards at a level that was only slightly lower than their average profit margin.
Customer footprints are still best identified and retained by physical cards that encourage repeat purchases. POS device scans are a seamless and contactless way of enabling point addition as well as redemption.
Now that loyalty programs have made a strong mark in the F&B industry, there is a growing need to market them through social media. Hence, platforms like Instagram are being optimized to ensure that customers derive maximum benefits at the right time. Influencer marketing is further being leveraged to ensure that customers benefit from coupon codes and discounts that are activated in the short term to build brand awareness and consideration.
It is, thus, evident that creating the right F&B loyalty program includes strategizing effectively to meet specific customer needs for each segment. This further entails getting the right digital transformation partner onboard to ensure that customer data is transformed into the most profitable programs. Whether club or tier-based, there is immense scope in this industry in particular due to the love for one’s favorite food and drink. Get in touch with our F&B loyalty experts at Capillary Technologies to understand how best to activate the aforementioned best practices.
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