If you’ve got a rewards program, here’s how to make it really work

Pitfire Pizza tried printing punch cards for their nine locations — buy 10, get a pie free. They saw their same customers, gave away a few pizzas, but not much else.  Pitfire’s Chief

Operating Officer Mitchell Wong says they haven’t had success with that or any of the several other loyalty strategies they’ve tried. Sound familiar?

The goal of your loyalty program is “frequency, increasing ticket size and motivating cross-menu purchases,” according to Michela Baxter, senior director of Loyalty at HelloWorld.  Read on to find out common mistakes pizzerias make and how you can overcome them.

Mistake 1: Programs that don’t give you data.

Amity Kapadia, content marketing director for Ambassador, a referral marketing company, says: “The goal is to drive new sales. You want a trackable URL, promo code or points system.”

Wong notes that customers are more wary about giving you their contact information unless there is clear value to them for signing up for a loyalty program.

Recent research published in the journal Decision Support Systems finds that “due to the more dynamic consumer preference in online markets, transaction data collected through loyalty programs provides stronger profit incentives for retailers.” Data is the big tradeoff for free product in loyalty programs, and it is best attained online.

Whatever you do for a loyalty program, make sure you have a way to track who’s using it and what their purchase behaviors are. That’s how the system is good for customers and helpful to you as well.

Mistake 2: Offline experience only

Double Dave’s Pizza in Texas and Oklahoma first tried a buffet stamp card back in the 1980s. The program inherently kept customers tied to a particular location due to the use of a paper punch card,” COO Joey Bramwell explains. “While the frequent diner cards for buffet work great, we wanted to reward all our customers in every purchasing format (dine-in, delivery, pickup and online ordering). Our ‘Dave’s Dividends’ program allows customers to earn points for every dollar spent, and they can redeem those points for different options and amounts of food. This loyalty program’s information is Cloud based, so the customer can accumulate points and redeem them at any location in the chain.” With 35 locations, the flexibility offered by a digital program is important to customers.

Assistant Professor Sanghee Lim of the Johns Hopkins Carey Business School has conducted research about online and offline consumer behavior. “Offline stores may be giving away profits when they offer loyalty rewards to customers who will keep coming back anyway, regardless of any discount that’s offered,” she says. “Online shoppers, on the other hand, may use a coupon to revisit a retail Web site even when it’s not one of their preferred sellers.” Online loyalty offers or rewards are a growing way to tap new customers to try your pizza.

Mistake 3: Disconnected from brand

According to research published in the Journal of Retailing and Consumer Service, if customers feel connected to you and your brand, they don’t care how long it takes to earn a loyalty reward.  But if they don’t have a personal involvement, they are less patient.

What does that mean for you? A loyalty plan that feels like an organic part of your brand is important. If the program seems like an afterthought or add-on, customers can tell. Loyalty programs should integrate with everything else you have going on — starting with color scheme and logo to the tone of your establishment.

Double Dave’s Pizza’s Bramwell advises that when integrating your program into existing business, “keep it simple and easy to use,” he says. “Anything complicated will keep customers from participating. Tying the program to a customer’s phone number makes the program easy to use as cards or keychains can be seen as excess clutter. Lastly, train your employees to not only understand the program, but to champion its use! Having an employee who is ambivalent about making someone’s free pizza will take the excitement out of the process.”

Mistake 4: No long-term plan

“The goal of every program should be to reward frequent customers for their patronage,” says marketing consultant Joseph Braithwaite. “You need to show them you respect them for making a choice to come to you.”

Bramwell at Double Dave’s says that you must let customers know you value them.  “As customers can choose any number of places to buy pizza, we wanted to let our customers know that we appreciated their continued business. And the best way to do that is with free food! Discounts are nice, but free food speaks volumes.”

If you are thinking simply of the short term, trying to get more people in the door, a substantive loyalty program will not work. To build loyalty takes time and your business really embracing your customers.

Mistake 5: Lack of Personalization

One reward across all consumers isn’t going to cut it in today’s highly individualized world. As Baxter says: “Consumers expect more personalized offers.” That may have been optional in the past, but no longer. “They feel more positively about a brand when the communications they receive are more personally relevant.” That’s where data really comes into play, when you can tailor your contact based on what customers have done in the past.

“When someone earns that free pizza, that pizza will taste better than the last pizza they bought,” Bramford says. “There is nothing like handing a customer their free pizza and giving them a high-five as a congratulations for achieving their goal of earning a free meal.  You can count on that customer to be back next week to start earning more points.”

Eliana Osborn lives in the desert southwest with her family, where she works as a part-time English professor and freelance writer.