Quick service restaurants (QSRs) have always been adept at embracing new technologies. There are two reasons why this trend will grow in momentum: One, with demand for meals-on-the-go growing the industry is set to reach more than $700 billion globally by 2022, indicating a CAGR of 4.2%[i]; two, COVID-19 has changed customer behavior and QSRs will depend on technology to meet these new patterns while balancing their slim margins with operational challenges and rising cost of inputs. QSRs that do not use technology will be unable to deliver the experiences that customers now want and will see an erosion of loyalty.
Loyalty is the real battle ground for QSRs. The key weapon they must use to build loyalty is an authentic approach to customer relationships that relies on emotional connects. The path to creating emotional connects depends on the quality of available customer data. Fortunately, with the growing number of channels – such as contactless payment systems, social media, pick-up services, the use of mobile apps and partner delivery systems – customer data has become richer and more dependable. But are QSRs exploiting the new opportunities to build better loyalty programs? The answer is, “No, they are still stuck in the Loyalty 1.0 mindset” which is the traditional points-for-rewards approach combined with a smattering of discounts.
Loyalty 2.0 is the next level
The top 5 factors that will define Loyalty 2.0, the new approach to building customer connect, that QSRs must adopt will include:
1. Supplement traditional cookie-cutter approaches: Traditional loyalty programs must be supplemented using actions that target individual customers. Did your customer just spend $50? Give them a higher discount for an about-to-be-launched new product or provide free deliveries. The goal should be to provide discounts on categories that the customer has shown interest in (yes, the clues to this are in customer data).
2. Think of customers as VIPs: Make customers feel special by providing them exclusive combos on high-value products that are not available on the regular menu. Customers will feel special and will increase their visits/spends.
3. Leverage intelligence at Point of Sale: Integrate the loyalty system with POS. The integration allows customer-facing executives to access loyalty information in real-time (such as balance available) to make intelligent suggestions that drive sales.
4. Build future sales: Reward customers who promote outlets/products/brand with loyalty points. These points can be redeemed within a pre-specified period.
5. Focus on safety/security: Customers return when the food is great and when it is matched by convenience. However, convenience – by way of payment and delivery options – is driven by the availability of data. Ensure that mobile apps used by customers are secure and meet regulatory standards such as the General Data Protection Regulation (GDPR).
Engage with Customers on Mobile Apps
The use of mobiles is going to grow further as QSRs make ordering food simpler and more rewarding. Food apps will become the bridge between a brand’s physical and digital presence. These should be used in strategic ways to improve loyalty and boost margins.
ITC Infotech and SessionM co-develop mobile apps for QSRs
ITC Infotech has co-developed a modern mobile app (Android and iOS) with SessionM loyalty platform for mid-segment QSRs. The app delivers on all 5 factors that go into creating Loyalty 2.0 by providing real-time integrations with SessionM and other online food ordering platforms. QSRs can also configure and customize the app interface and use our cloud-based API Orchestration Framework to support modern and memorable mobile experiences.
The application enables the following features:
- Allows customers to design relevant campaigns
- Geo location intelligence for timely notifications/push messages
- Recommendations based on customer’s past transactions
- Redemption of rewards
- Online ordering of products, tracking and checkout processes
- Notifications for new product or service launches
- Personalization that can result in incremental sales of up to 5%
ITC Infotech’s rapid implementation and deployment approach is powered by key accelerators such as Data Migration Toolkit, Partner Data Manager and API Framework for data orchestration across customer portals, admin portals and mobile applications. With our experience and accelerators, we can assist QSRs speed up go-to-market and enable cost savings of up to 25%.
To know more, check out the whitepaper on ‘Smart Loyalty Application to amplify QSR growth’.
Lead Consultant, DATA