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BUSINESS PROFILE
How Panera and Taco Bell Are Beating the Odds The basic human necessity for food will never go away. People need to eat no matter how tough life gets. And yet, the restaurant industry was one of the hardest hit when the COVID-19 pandemic began. That’s because when consumers need to tighten their purse strings, frivolous spending on eating out or getting take-out is one of the first things to go. So how, then, have chains like Panera, Starbucks, Taco Bell, Wendy’s, Chipotle, and others managed to not only survive during Taco Bell rolled out their latest rewards program in July, and it generated so much buzz that both their website and app crashed when the program first launched. This sort of pent-up demand shows that even in the midst of a crisis, loyalty finds a way. Their program offers users secret menu items and other perks THE TRUE POWER OF LOYALTY
their ability to continue reaching out effectively is only growing. For businesses that aren’t big name brands with hundreds of locations, what good can a loyalty program do? It’s all about fundamentals. Any business owner knows how much harder and more expensive it is to acquire a new customer than it is to keep a current one. A loyalty program— or any type of loyalty perk or offer — helps keep the customers you already have. And according to Forbes, in good times, 25% of customers are responsible for 50% of sales. So focusing on that segment of your customer base is actually cheaper for your business and has a bigger impact on the top and bottom line. Catering to these customers also means that your business is truly letting the customer influence their own journey while using your business, and that’s better for everyone involved: It creates more revenue for the business and more satisfaction for the customer. If any business wants to outlive the tough times we’re in — or possibly even thrive through them — they’ve got to focus on the customers with the most potential to stay loyal. Providing them with something that will keep them coming back in good times or bad may seem
that nonmembers can’t get without providing basic sign-up information in the app. Even though they had to give a little on their end, customers still scrambled to be a part of the program. If you generate loyalty that provides extra value, customers are willing to come back and keep spending. But creating loyalty programs offers a lot more perks than just generating revenue. Customers who sign up for a loyalty program give those businesses information that can be turned into useful data. This data helps businesses learn about their customers by giving insights into what they like, what they don’t, and what their patterns are. It can show them who their most valuable customers are. This information is exactly what companies need to adjust their brands accordingly in order to stay both popular and cost-efficient. But it’s not all about points and perks. The pandemic has revealed that customers have higher expectations these days. Loyalty has first and foremost become about experience and personalization. Taco Bell continues to master this by not only offering food perks but also messaging their members about new products, safety, and business insights. And with more customers ordering digitally,
this difficult time but also thrive? By banking on the loyalty of their customers to carry them through. Customers become loyal to a brand when they feel that brand makes a point to offer products and services that they not only enjoy but feel excited or even privileged to purchase. These “feel good” benefits are what keep customers coming back to readily spend their money, and for chains like Panera and Taco Bell, the best way to offer those benefits is through a loyalty program. Panera’s coffee subscription program launched shortly before the pandemic, which quickly went on to nearly halt most breakfast food purchases. And yet, this hasn’t stopped people from signing up for Panera’s program in droves. That subscription program is now 40 million strong, and Panera credits its loyalty program for generating such massive interest. Panera’s CEO has stated that these loyalty members purchase from the brand 6 to 10 more times than nonmembers and generate reliable recurring revenue.
like it has a lot of upfront costs, but
that loyalty will pay for itself, and then some.
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