Quick-service restaurants (QSRs) have leveraged rewards programs to engage and maintain their loyal followings for a long time, but such initiatives are receiving increased attention during the pandemic as QSRs more heavily rely on them to bolster sales and consumers more aggressively seek deals to help save money. Some restaurants are learning that the recipe for these programs’ success features customer input, however. Recent studies suggest that consumers are on the hunt for loyalty programs customized to their individual tastes, with research revealing that up to 84 percent of consumers spend their money on merchants that personalize their offerings.
El Pollo Loco, a Costa Mesa, California-based restaurant chain known for its LA Mexican-style fire-grilled chicken, found that the pandemic’s pressures demanded a rewards program revamp. The publicly traded chain took a customer-focused approach to revising its Loco Rewards last summer for its 480 locations in Arizona, California, Louisiana, Nevada, Texas and Utah.
“When we launched the loyalty program in 2017, it started out as an opportunity to engage our frequent customers. It was all about trying to get downloads [of our app] and just trying to get people to utilize the technology,” Andrew Rebhun, El Pollo Loco’s vice president of digital, told PYMNTS in a recent interview.
The original rewards program provided customers with one point for every dollar spent, and those who accrued 100 points received a $10 coupon toward a future purchase. The average customer ordered about once a month and spent between $12 and $15, meaning it could take as long as eight months for diners to see the benefit.
“That’s way too long,” Rebhun said. “It became clear very quickly that we needed to make an offer that was very consumer-centric and do something that … would actually allow our customers to want to take action, so we changed it.”
Made-To-Order Rewards
The program today has 2.5 million members and looks much different. Its initial revisions addressed customer responses to emails sent to the chain’s database, including both frequent and not-so-frequent patrons to understand every perspective. Diners spending $50 receive a $5 coupon in addition to the previous benefits of a birthday reward, rewards for inviting friends, bonus point days and other year-round exclusive offers. Now it takes only about two and a half months to earn a coupon.
The result is that the number of redemptions on Loco Rewards has increased by more than one-third, Rebhun said. The company’s amended rewards program also included investment in artificial intelligence (AI).
