5 years in the past, Donatos Pizza regarded round on the loyalty applications its rivals have been providing and got down to construct certainly one of its personal.
The Ohio-headquartered pizza chain’s authentic loyalty program, created in-house, was a “pie within the sky” with many shifting components, mentioned Erin Corrigan, director of digital advertising and marketing. “We had executed a little analysis on greatest practices, however we have been in no way specialists.”
Program parts included a punch card system, 10 factors for each greenback spent, bounce-back provides, sign-up incentives and birthday rewards. The reductions piled up quick, however the impression to the model’s backside line wasn’t clear.
In 2018, Donatos began working with Stellar Loyalty – which later turned Cheetah Digital and is now mar tech agency Marigold – on electronic mail advertising and marketing efforts, signing up for a loyalty program take a look at in early 2019.
Marigold’s analytics work revealed cracks within the fledgling loyalty program’s basis. Although extra clients have been coming in, earnings have been canceled out by the promos and reductions.
Donatos amended the loyalty program to revolve round incomes factors towards free pizza. However this second iteration produced its personal problems.
“It was chaos,” Corrigan mentioned. “We have been, at that time, in survival mode.”
Take a look at and study
From Marigold’s report, Donatos realized that solely 18% of loyalty program members have been incomes a reward (except for birthdays) annually. Members redeemed lower than half of the issued rewards, that means 8% of members noticed any kind of perk, Corrigan mentioned.
Primarily based on its findings, the family-owned pizza franchise launched on-demand rewards at totally different worth factors, akin to including extra menu gadgets as choices or rewarding clients with factors for collaborating in events like Nationwide Pizza Day or finishing quizzes and surveys. That method, clients didn’t have to save lots of up factors over time to realize any worth.
The testing and studying over the past 5 years have yielded progress for the corporate, with a 23% improve in program participation to 135,000 new members over the past 12 months, Corrigan mentioned. The share of members redeeming rewards is up from 8% to 19%, and now a couple of third of internet gross sales come from this system’s 76,000 on-demand rewards members.
“It’s been actually nice to not be in panic mode,” Corrigan mentioned.
One other metric the chain tracks is engagement with member badges, which acknowledge and reinforce on-line ordering, by rounding up an order complete to donate to a trigger or attempting new menu gadgets. At current, 76% of members are incomes badges.
Subsequent on the docket: Donatos is attempting to develop the share of orders that may be attributed to rewards members. “We’re simply getting began,” Corrigan mentioned. “We nonetheless have some evolving to do.”
{Dollars} and knowledge
A advantage of working with Marigold is that Donatos’ advertising and marketing crew consolidates the client knowledge, in line with Corrigan. Beforehand, the division requested IT or finance would pull that info.
This entry created alternatives to establish patterns and tendencies, section audiences and personalize its messages.
As an example, Donatos makes use of its vegetarian and gluten-free segments to focus on clients who buy vegetarian choices or cauliflower crust, quite than suggesting pepperoni pizza to everybody.
The Donatos loyalty program divides individuals into 4 tiers based mostly on order frequency and tailors its messaging accordingly. Prospects within the base tier haven’t bought in additional than a 12 months; the subsequent tier up, low frequency, go to a couple of times a 12 months; and by the point you attain the high-frequency tier, clients go to as soon as a month or extra.
“It’s about discovering the individuals who have the potential to maneuver up into that prime tier,” Corrigan mentioned.
To personalize its provides, Donatos depends on a mix of zero-party knowledge – akin to birthdays, favourite menu gadgets or dietary preferences individuals present to the corporate – and first-party knowledge, together with buy exercise, order historical past and which day of the week clients are available in most, Corrigan mentioned. “It’s about putting a steadiness between what individuals say they’re doing versus what they’re really doing.”
