Lee Barnes, head of data insights at Paytronix, a leader in restaurant reward and guest engagement programmes, discusses why fast food outlets and quick-service restaurants should use loyalty to cut above the rest
As a nation, Brits are fast food fanatics. Fast food outlets and quick-service restaurants (QSR) seem to have weathered the storm that has hit casual dining restaurants in the UK, with consumers not slowing down on their take-away habits.
Guests that consume fast food often do so out of habit and affinity with the brand. Global fast food outfits such as McDonald’s, Burger King, Subway are partly so successful due to the strength of their respective brands. However, these food outlets are also often visited by the circumstantial guests. Those that will visit when they’re on the road, getting home late after an evening out, or simply when there are no other options available. These are the guests that fast food and QSR should pay special attention to, as there is significant opportunity for growth here.
Consumers dine at or order from a fast food outlet or QSR out of convenience. This means they rarely question the price and are unlikely to be influenced by discounting. Loyalty, however, is an initiative that these restaurants would do well to consider. In implementing such a programme, QSRs and fast food outlets can begin to identify and understand their guests. Whether frequent guests or circumstantial guests. In turn, they have the information need to target these circumstantial guests with a variety of methods to encourage repeat visits.
The benefits of a loyalty programme
Consumers are faced with mass choice when it comes to fast food and QSR options. When out shopping on the high street, stopping at a service station, or waiting for their flight at an airport. This is where loyalty can really make a difference.
Loyalty is about creating a personal relationship and rewarding guests for visiting. One of the overarching aims of a loyalty programme is to gather information about guests. In turn, fast food restaurants can identify different guest segments and can use that information to provide loyalty-based rewards in keeping with their personal preferences. This can all happen from the swipe of a card or scan of an app.
Coffee chains, for example, have slowly introduced the idea of loyalty through stamp cards. However, these are now very outdated, people will store their stamp cards away for years, or easily misplace them. It is therefore hard to truly know how often guests are making a purchase.
The success of Subway in the UK can arguably be a by-product of its effective loyalty programme. With the help of technology, it can track who’s coming in, how much they are spending, what they are eating and how frequently they are returning. In turn, Subway rewards its guests with points. Every five hundred points equates to a small sandwich. Guests are very likely then to also purchase a drink or snack, meaning an uplift in sales by giving away just one small sandwich.
Other fast food restaurants are in the UK are also seeing the benefits of a loyalty programme. KFC introduced its ‘Colonel’s Club’ to the UK in 2016 enticing customers with free chicken. KFC customers simply present the app and gain stamps with every order over £3.00.
Taking the first steps towards loyalty
Planning and launching a loyalty programme takes time. But once started, fast food and QSRs significantly reap the benefits. Low-frequency ‘circumstantial’ guests are the ones to target. These are guests that visit occasionally, but may visit other QSRs or casual dining restaurants more. The potential to move low-frequency guests into a higher-frequency segment is where the value of any successful loyalty programme comes into play. Capturing their attention during their rare visits and encouraging them to come back sooner.
Tracking these guests is relatively easy these days. It starts with selecting a loyalty technology partner that is integrated with the ePOS. Followed by programme buy-in from the top down and encouraging front-of-house staff to invite circumstantial guests to become members of the programme. Once the loyalty programme is up and running, restaurants can segment their guests to identify low frequency, medium frequency, and high frequency guests along with their menu preferences, to name a few.
How a loyalty programme can benefit fast food and QSRs in the long run
A loyalty programme can bring many benefits to fast-food restaurants. A greater understanding of guests’ purchase and visit behaviour, to name a couple. Front-of-house staff soon get into the habit of asking guests if they are signed up to the loyalty programme. Encouraging them to sign up if they haven’t done so already. In turn, fast food and QSRs can become front of mind for consumers. When presented with a choice of outlets, they will opt for the one they feel more connected to. This is when the loyalty programme has truly kicked in.