Restaurant Loyalty Holdouts Get on Board as Consumers Expect to Be Rewarded

With consumers having grown accustomed to the ability to earn loyalty points from so many of their favorite brands’ apps, restaurants that do not offer rewards now risk falling behind. This month, a couple of the notable remaining holdouts, CKE Restaurants’ Hardees and Carl’s Jr. brands and Dine Brands’ IHOP brand, both announced new loyalty programs.

On Wednesday (March 23), the former announced the nationwide launch of the My Rewards program in both of the brands’ apps, a points-based program in which “Stars” are redeemable for free food.

“In today’s digital-first age, we want to reward our loyal customers in a fun and engaging way … while encouraging new guests to sign up as well,” Chad Crawford, chief brand officer of CKE Restaurants, said in a statement. “We were extremely pleased by the positive feedback from superfans in our pilot markets that gained early access to the program and are thrilled the national rollout is now here.”

The news comes two weeks after IHOP announced the soft launch of its International Bank of Pancakes loyalty program, which rewards purchases with so-called “PanCoins,” which can be redeemed for coupons, “joyful experiences” and other offers.

“We have ultimately created a fun experience that doesn’t take itself too seriously, helping guests realize IHOP’s purpose to spread joy through the accumulation of our one-of-a-kind wealth: pancake wealth,”  Kieran Donahue, the pancake brand’s chief marketing officer, said in a statement.

Related news: IHOP Announces Loyalty Soft Launch as Consumers Seek Out FSR Rewards

The remaining holdouts are now in the minority. Most restaurants offer the ability to earn loyalty rewards, according to data from PYMNTS’ 2022 Restaurant Friction Index, created in collaboration with Paytronix, which drew from a survey of more than 500 managers of quick-service restaurants (QSRs) and full-service restaurants (FSRs) across the United States.

The study found that 57% of restaurants offer rewards programs. PYMNTS’ new Restaurant Friction Index, created in collaboration with Paytronix. It also found that 73% offer app ordering, meaning that about 1 in 5 restaurants that offer mobile ordering do not reward consumers for their purchases.

Read more: PYMNTS Data: Loyalty Programs Best Way to Get Diners to Spend More

Additionally, the majority of consumers now use loyalty programs. Findings from PYMNTS and Paytronix’s January study, The Digital Divide Report: Minding The Loyalty Gap, which drew from a survey of 2,414 U.S. adults, noted that 61% of respondents had earned loyalty rewards for their spending in the previous 30 days. Plus, more than half of all consumers in their early 40s and below reported being members of loyalty programs.

Read more: Restaurants Compete to Make Loyalty Programs Stand out as Consumers Join Multiple Programs

Loyalty programs not only reward consumers for their spending but also help brands understand how better to appeal to those customers, personalizing messaging and offers to their preferences.

“By understanding the individual guest’s participation in the loyalty program and purchasing behaviors better, we’ve started engaging them better — by connecting with them through personalized [customer relationship management (CRM)] and offers,” Tim Hortons Canada Senior Director of Digital and Loyalty Sales Ernest Choi told PYMNTS in an interview. “We see personalization going beyond just the experience in the mobile app and into our restaurants, which gives our guests an omnichannel digital experience.”

See also: Tim Hortons: Loyalty Programs Open Customer Channel Beyond the Restaurant