Brands Leverage Free Fries to Build Customer Loyalty
It’s National French Fries Day and the big brands are taking advantage of the salty “holidays” to build customer loyalty.
The fast food giant McDonald’s (MCD) will offer free large fries orders (no purchase necessary) all day Wednesday, but only to customers who order through the McDonald’s app and are members of the chain’s 26+ million loyalty program.
Similarly, Wendy’s (MAGNIFYING GLASS) offers free fries throughout the week with specific purchases that change daily. The problem? They’re only free if ordered through the Wendy’s app, which (surprise!) requires customers to join the brand’s digital loyalty program, which had around 19 million members at the end of last year. .
Other chains are also taking on the trend, with Burger King’s (RSQ) “Royal Perks” members receive a free order of chicken fries with any $3 purchase, while Sonic Drive-In customers who purchase through the app can enjoy free fries or medium fries.
The biggest push toward online and digital rewards comes as restaurants seek to attract new customers and retain existing customers as competition in the fast food industry intensifies.
“Without a doubt, restaurant organizations that invest in loyalty see increased sales, better customer retention and, we believe, higher long-term margins,” said Savneet Singh, CEO of the management platform. restaurants. PAR Technologypreviously told Yahoo Finance.
According to Singh, reward programs lead to greater customer loyalty, which, in turn, increases frequency, spend, verification averages and engagement, especially during tough economic times.
PAR, the parent company of loyalty app Punchh, whose client list includes big brands like Taco Bell, Pizza Hut, KFC and Arby’s, among others, helps brands improve their operations to better capture value. long-term customer.
“When you build a loyal customer base, that customer base comes back to your restaurant. You don’t have to market to them again, but more importantly, you have more data about them,” Singh said.
He added, “Loyalty programs are an amazing way to bond with that customer so they stay with you long term.”
Recent data proves the benefits of these types of offerings with Chipotle (GCM) announcing last month that it had expanded its loyalty program to Canada.
“What attracts us the most is that we can have a more personalized relationship with [these customers]”, Jack Hartung, Chief Financial Officer of Chipotle told Yahoo Finance in an interview, revealing that the Mexican chain’s loyalty program has 28 million members and counts.
“Those who join the loyalty come to Chipotle more often, and they spend more when they come,” the executive continued.
The company added that the program boosted new reward members by 20% and generated a 35% increase in overall spending by active members.
Peter Saleh, managing director and restaurant analyst at BTIG, told Yahoo Finance that “almost everyone has a rewards program.”
He described it as a necessary “lever” to drive growth, pointing out that most companies will eventually have to use their own digital programs first as they mature.
But the analyst noted that the most powerful factor in a rewards program is “you’ll learn a lot about your customer.”
“Restaurants that have loyalty programs know when a customer ordered, what they ordered, how much they spent, where they visited, their age – all types of data that allow these restaurants [to make better decisions],” he explained.
Singh added that technology has also created a more sophisticated way to track loyalty programs using this real-time data to better drive long-term customer value.
“Rewards and digital go hand in hand,” Saleh agreed. “The most powerful thing is all the data these companies are capturing over time.”