There are two industries predominantly involved in food reward programs:
- Fast Food Restaurants
What they share in common is that they employ plastic card printing to provide consumers with rewards program cards that track purchases and earned points. They often share the data gathered by card usage with other companies, for a fee of course.
Fast Food Restaurant Programs
A recent survey of consumers regarding rewards programs was performed, sponsored by several retail industries. Five important insights emerged:
- Low Participation: A measly six percent of consumers belong to fast food restaurant rewards programs. Frankly, this can be traced to the fact that many restaurant chains have not yet adopted the practice. Consumers who look for participating restaurants belong on average to 1.4 programs and favor eating at these restaurants 48 percent of the time.
- Preferred Rewards: Consumers’ first choice is free merchandise, being preferred by 2/3 of rewards programs members. Thus, giving away toys, stuffed animals, lottery tickets, etc. represents an effective strategy. The second choice was a preference for immediate rewards/discounts at the time of sale. Hence, a program that provides you with a free burger or shake is popular, but currently only 11 percent of fast food establishments offer this option. Coupons and cash back came in third and fourth.
- Weak Effectiveness: The group that indicated their memberships was “very important” in selecting a restaurant was a paltry four percent. The “somewhat important” group accounted for another 44 percent. This may indicate that the reward programs are not rich enough. In comparison, coffee shops registered a 24 percent “very important” score.
- Young Membership: When compared to other retail industries, fast food reward program members are younger. For instance, 22 percent of fast food members are 25 or younger, compared to only ten percent for all retail loyalty programs. At the other end of the spectrum, those 55 and older accounted for only eight percent of fast food membership, contrasting with 24 percent membership among all retail programs.
- Antiquated Technology: Half of the food rewards programs still rely on primitive punch cards. These types of systems gather little marketing data and are essential useless for market research. Plastic cards make a lot more sense and can produce large volumes of market research information.
It appears that the fast food industry has a lot of work to do to capitalize on the benefits of a sophisticated loyalty program. This stands in stark contrast to the nearly universal adoption of advanced loyalty programs by the supermarket industry.