IHOPE you have seen the latest from IHOP loyalty

Bite-Size Loyalty Newsletter

ISSUE 009

Hi Reader,

This week I’ll cover everything I like about (and want to see in the future from) IHOP’s new loyalty program, debate the importance of “owning” the customer relationship, and jump on the bandwagon of forecasting the fall of NFTs.

Thanx for reading!

Emily

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Have you banked at the International Bank of Pancakes (IBOP) yet?

The creativity of IHOP’s new loyalty program is quite impressive. Members earn “PanCoins” that can be exchanged for rewards in the “Stack Market” at the “International Bank of Pancakes”. Not only is it creative, it’s smart. IHOP branded their PanCoins “Crypto Pancakes” and in doing so associated themselves with a trend that’s taking the industry by storm. The reality? There is no actual crypto technology to speak of but for the 99% of us who don’t care, so what, and the program launch did exactly as intended: create big buzz.

The real question though, as with any loyalty launch, is will the program drive more visits and higher checks from existing customers and perhaps more importantly, will the program encourage guests to order from IHOP directly rather than through the third-party delivery apps?

Obviously, the jury is still out on that but the program looks promising. While the rewards available in the “Stack Market” are pretty transactional: free delivery, free birthday pancakes, and other free items that can be redeemed for accumulated PanCoins, their website mentions “Secret Menu Offerings” so I’m keeping my fingers crossed their rewards will eventually be as creative and on-brand as their fantastic marketing.

Want non-discount reward ideas?

What’s the value of owning the customer relationship?

While most brands are starting to wake up to the real threat that third-party delivery poses, I still occasionally hear the refrain “the rates I negotiated are actually quite good” and “we are margin neutral on third-party” or “my customers on third-parties are different customers than my regulars” and “those sales are incremental”.

I get it. Sometimes, as a business, you have to focus on the short-term. In fact, in my own day-to-day, I struggle with this a lot. But investing in third-party delivery without a clear strategy to move those customers over immediately to your owned channels comes with serious long-term risk:

Your customers are creatures of habit. And habits are hard to break. Once they start to order from DoorDash one, two, three times, that reorder button becomes awfully attractive. Especially (as in my case, you are holding a baby on your hip and trying to place an order before bedtime with one hand so you don’t end up eating dinner at 9 o’clock). The more orders placed on 3PD, the harder that habit is to break.

“So what”, you say. “Who cares so long as they keep ordering my food”?

Every time your customer places an order on a third-party marketplace, they become more familiar with that user experience and build loyalty to the marketplace, rather than with your brand. So what do they do when they get hungry, where do they turn? The marketplace, of course. And once in the marketplace, it’s a gamble as to whether or not they pick you even if they originally intended to, after seeing all those shiny advertisements for your competitor’s food at the top of the app.
There’s more! How are you going to stay top of mind, entice them with new seasonal menu items, or get them to refer a friend, when you literally have no idea who they are or how to communicate with them? Not to mention, convincing them with your brand story that your price premium is justified.

Last but not least:

Type in your own restaurant’s name into DoorDash’s search engine. I dare you. Do it right now. What comes up? Your food? Or your competitor’s? The answer to that question depends on whether or not your competitor is paying for advertising. Scary thought.

Our Chief Product Officer, Aaron Newton, just spoke on a panel at Food on Demand about this very topic. He’s heavily quoted in the article “How Can Restaurants Win Repeat Customers? Create an Emotional Tie, Loyalty Experts Say” and on the value of non-discount loyalty. I encourage you to check out the write-up.

Read the Article

NFTs. To be or not to be?

NFTs had a moment and I predict, it’s over (at least for now). The value of NFTs has been falling steadily pointing to the fact that the NFT trend, might have been just that. Snoop Dog’s NFT, sold in early April for about $32,000, but is now up for auction with the highest current bid at $210. In fact, NFT sales overall have fallen 92% since their peak last year. Apparently when McDonald’s and Marriott start doing something, it becomes less cool.

Non-Discount Reward of the Week

Build your Own Burrito at a Chipotle in the metaverse

Chipotle is launching a Burrito Builder on Roblox, a gaming platform. Players build burritos to earn Burrito Bucks. Those Burrito Bucks can then be exchanged for actual food at a Chipotle near you.